Guidance missed, Orion to restructure

AUCKLAND: Orion Health Group shares fell after the healthcare software developer missed guidance for annual sales due to delays in finalising some large deals and said it was targeting annual savings of up to $30 million in a ‘‘substantial’’ restructure of global operations.

The Aucklandbased company’s revenue was between $170 million and $173 million in the year ended March 31, missing already downgraded guidance of $175 million to $190 million, it said. The late transactions would be carried over into the 2019 financial year. Orion’s operating loss narrowed in the second half of the financial year but not enough to reach breakeven, a target it was aiming to get close to. The shares fell 1.4% to 69 cents.

‘‘The business is committed to rightsizing the cost structure of the company across all regions to drive sustained profitability,’’ chief financial officer Mark Tisdel said. ‘‘We remain committed to building longterm value for our customers and shareholders.’’

Orion Health has been reviewing its business since May last year as it seeks to return to profitability, having foregone shortterm earnings in the hunt for global expansion since going public in 2014. That review was initially to source new capital but was later broadened to bolster the longterm structure of Orion Health.

Restructuring efforts had already cut $10 million from the company’s annual costs, trimming 76 jobs from its 1200strong workforce, and yesterday it announced plans to remove between $25 million and $30 million of annual expenses.

Orion Health will reorganise its business into three units — Rhapsody, Population Health and Hospitals — which Tisdel said would narrow the gap between customers and the research and development teams and support services. — BusinessDesk