Careteq Reports 10% Overhead Cut, $0.25M Operating Outflows, $0.53M Cash Balance

• 1-System platform integration nearing completion with rollout expected in Q4 FY25
• Year-to-date revenue growth surpasses projections alongside a 10% reduction in overhead costs
• Positive underlying EBITDA maintained with operational cash outflows contained at $0.25 million
• Strategic partnership with Medic Alert and increased engagement from aged care providers and GP networks
• Quarter-end cash balance of $0.53 million with disciplined cash flow management supporting growth

Platform Integration Progress and Operational Efficiency

Careteq Limited (ASX: CTQ), an Australian clinical healthtech company focused on medication management solutions, has made significant strides in its Q3 FY25 activities. The company is in the final phase of integrating its 1-System platform, which combines Embedded Health Solutions (EHS) and Home Medicines Review (HMR) Referrals. Although the rollout has experienced a slight delay, completion is anticipated during Q4 FY25. This integration is expected to enable the decommissioning of legacy systems, delivering substantial cost efficiencies and positioning Careteq for improved operational cash flow and profitability in FY26.

Financial Performance and Cost Management

Careteq’s financial discipline is evident in its containment of net cash outflows from operating activities to $0.25 million for the quarter. Year-to-date revenue from continuing operations has exceeded growth projections, while overhead costs have been trimmed by approximately 10% compared to the prior year. The company has maintained a positive underlying EBITDA, signaling operational momentum that is expected to carry through the remainder of FY25 and into the next fiscal year. With a quarter-end cash balance of $0.53 million, Careteq continues to manage its cash flow strategically to support key growth initiatives.

Expanding Market Presence through Strategic Partnerships

Business development efforts have accelerated, highlighted by a strategic partnership with Medic Alert. This alliance broadens Careteq’s medication management offerings to a wider population, enhancing its market penetration. Additionally, the company has seen increased engagement from aged care providers actively seeking comprehensive medication management solutions. Discussions with several aged care groups could materially increase contracted care beds in upcoming quarters. Strengthened relationships with GP networks further enhance Careteq’s ability to connect healthcare providers with accredited pharmacists through its integrated platform.

Regulatory and Outlook Considerations

On the regulatory front, Careteq’s position with the Australian Taxation Office (ATO) remains unresolved, with feedback expected around May or June 2025. The company continues to work closely with legal advisers and the ATO to resolve this matter. Looking ahead, Careteq’s priorities for Q4 FY25 include realising cost synergies from the 1-System platform rollout, expanding strategic partnerships in aged and home care sectors, introducing new service offerings leveraging platform capabilities, and implementing further operational efficiencies to extend its cash runway. These initiatives underscore the company’s commitment to sustainable growth and shareholder value creation.

Bottom Line?

As Careteq approaches full platform integration and expands its strategic footprint, the coming quarter will be pivotal in translating operational improvements into sustained profitability.

Questions in the middle?

• How will the slight delay in the 1-System platform rollout impact Careteq’s cost-saving targets and revenue growth in FY26?
• What are the potential implications of the unresolved ATO position on Careteq’s financial outlook and investor confidence?
• To what extent can the partnership with Medic Alert and increased aged care engagements accelerate Careteq’s market penetration?