Careteq Reports $2.1M Cash Receipts and 9% Growth in Aged Care Beds
Careteq Limited reported a disciplined operating cash flow in Q2 FY26 with strong growth in its Embedded Health Solutions segment and ongoing resolution of an ATO tax incentive dispute.
- Q2 operating cash outflow limited to $0.1 million including one-off ATO costs
- Embedded Health Solutions contracts exceed 60,000 aged care beds, up 9% in the quarter
- Integration of 1-System platform underway with specialist firm engaged
- ATO R&D tax incentive objection process initiated with officer appointed
- Robust cash position of $669,000 and financing facilities totaling $625,000
Strong Operational Discipline Maintains Cash Stability
Careteq Limited (ASX – CTQ), a clinical healthtech company focused on medication management solutions, has delivered a disciplined operating cash performance for the second quarter of fiscal year 2026. Despite a slight net operating cash outflow of $0.1 million, this figure includes one-off costs related to an ongoing Australian Taxation Office (ATO) dispute, underscoring the company's tight financial management.
Embedded Health Solutions Drives Growth Momentum
The company’s Embedded Health Solutions (EHS) segment continues to be a growth engine, with facilities under contract now covering over 60,000 aged care beds, a 9% increase over the quarter. This expansion reflects strong demand for Careteq’s medication management services in the aged care sector, positioning the company well for future revenue growth.
Technology Integration and Platform Development
Careteq has recommenced the delivery of its 1-System platform, a critical integration project designed to streamline operations between EHS and Home Medicines Review (HMR) Referrals. A specialist firm has been engaged to complete this integration, with completion expected by the end of the calendar year. This technological advancement is anticipated to enhance service delivery and operational efficiency.
Navigating the ATO R&D Tax Incentive Objection
The company is actively managing a formal objection to amended ATO assessments concerning its Research & Development tax incentive claims for fiscal years 2021 to 2023. An objections officer has recently been appointed, and Careteq is working constructively with the ATO, supported by legal advisers MinterEllison. The outcome of this process remains uncertain but is a key focus for the board and investors.
Financial Position and Funding Outlook
Careteq’s cash reserves stood at $669,000 at the end of the quarter, supported by financing facilities totaling $625,000, including a convertible note and director loans. The company estimates it has sufficient funding to cover approximately seven quarters of operations at current cash burn rates. This financial runway provides a buffer as Careteq pursues sustainable positive cash flow and profitability.
Bottom Line?
Careteq’s steady operational progress and robust cash position set the stage for growth, but the resolution of the ATO dispute will be pivotal in shaping its near-term outlook.
Questions in the middle?
- How will the outcome of the ATO R&D tax incentive objection impact Careteq’s financials?
- What is the expected revenue uplift from the completion of the 1-System platform integration?
- Can Careteq sustain its growth momentum in Embedded Health Solutions amid competitive pressures?
