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Avia Health Informatics, parent company of Plain Healthcare Ltd, is one of those small companies that we can’t help thinking really ought not to be listed on AIM. The healthcare software provider reported a turnover of just £2.3m (FY11: £2.1m) in the year to 31 March 2012 and made a pre-tax loss of £0.68m (FY11: £0.54m).
Moreover, it’s had a turbulent year financially. Avia’s shares were suspended from August to January after its financial position was hit by a ‘revenue shortfall’ as anticipated sales of its Odyssey clinical decision support software failed to materialise in the UK. Having steadied the ship and been readmitted to AIM in February, it’s now looking to raise £1m of funds to provide working capital and underpin business development.
Despite a somewhat precarious financial position, Avia’s Chairman, Barry Giddings, is looking forward to the coming year with “guarded optimism” citing a number of prospects and opportunities that Avia believes can deliver “significant growth”. ‘New international markets’ are a key part of Avia’s strategy – it’s just appointed a sales agent in Illinois, USA, and a reseller in Canada – as it looks to reduce its dependency on the UK domestic market.
Whilst we wish the team well, we struggle to share their optimism given the track record of other, much larger, UK software companies that have tried and failed to conquer the North American market. We think it would be better to focus on getting its domestic house in order with a view to attracting a trade buyer that could provide the scale and financial stability it’s currently lacking.
