Teri Thomas, an American transplanted to Tauranga, took over the reins at Volpara in April. Photo / Included
Volpara Health’s restructuring will lighten the workforce by 29, or a third more than the recently reported number, once a declining lid policy is taken into account – but the new CEO says it is now
on the road to profit.
“At the time of Volpara’s FY2022 results [for the year to March]Volpara’s had a total workforce of 189 positions in the US, New Zealand, Australia and the UK, but that number has since declined due to natural attrition. Volpara expects a total workforce of approximately 160 once all restructuring changes are in place,” new CEO Teri Thomas told the Herald.Read:Jefferson doctors publish new book, ‘Tapestry of Health,’ with tips on wellness
The Wellington-founded ASX-listed breast screening software maker aims to reduce costs from $10 million to $11 million during its current fiscal year.
Volpara reported its full-year result for fiscal year 022 on May 26. Net loss rose 6 percent to $16.4 million on revenue that increased 32 percent to $26.1 million (accounts are in New-Year). Zealand dollars).
Shares fell to a 12-month low of 40c – below the 2016 list price of 50c.
The stock has regained some ground after Thomas outlined the restructuring plan earlier this week. During Friday afternoon trading, it stood at 66c for a market cap of A$166 million.
“Nobody likes to see staff leave, and we do our best to support those staff in finding new jobs,” Thomas told the Herald.Read:We Busted 5 Running Nutrition Myths
“But this strategy overhaul is about positioning the company to continue our strong growth in sales and customer base and create more products and jobs in the future.
“From a business perspective, the headcount reductions will not have a material adverse effect on revenue growth.”
In addition to laying off a number of staff, the restructuring will see a new focus on what Thomas calls “elephants” — large organizations or major commercial opportunities, such as the recent contract with RadNet, the largest provider of ambulatory imaging services in the US.
At the same time, the company will pull out of underperforming markets.
An investor presentation from Volpara said:
“The United States and Australia remain Volpara’s key regions for driving strategic growth, accounting for 98.4 percent of revenue.
“Regions such as Japan, Korea and Singapore provide sub-optimal revenues relative to the resources and investments required for efficient growth.
“By stimulating these regions, Volpara will save money on registration costs and ongoing operational support efforts.”
Growing up in Wisconsin and now based in Tauranga (where her husband Jay has hospitality interests), Thomas worked for a number of healthcare companies in the US before becoming global head of sales for Auckland-based Orion Health in mid-2017. She left shortly before Orion was delisted and did a Masters of Nursing Science at Wintec before joining Volpara in 2022 as a strategic advisor.Read:Restart A Heart: Leeds medical students demonstrate how to do CPR for national campaign
She replaced Volpara’s founding CEO Ralph Highnam in April of this year. A review followed, resulting in a new business strategy with a focus on growth and profitability.
“Part of the strategy is a reduction in operating costs, and one of those cost reductions includes a reduction in headcount, Thomas said.
“Some roles have been abolished, but others are being created.
“Volpara has acquired two companies in the past three years. We have found that we can be more efficient in some areas by bringing functions from multiple business units to one company-wide unit, while expanding other areas.”
The US sales force has remained the same, with growth in customer success and engagement, Thomas said.
“Other parts of the business will have fewer roles and more collaboration in cross-functional, cross-skilled teams. We are reducing our focus on unprofitable markets and a few low-sales products, and expanding our efforts in our largest, most profitable markets, the US and Australia, and products – Volpara Risk Pathways, Analytics and Hub.”
The cloud-based Risk Pathways, Analytics and Hub software expand Volpara from its original focus on analyzing breast density (a key cancer indicator) to helping run a radiography clinic and manage patient relationships.
In addition to duplicate positions not being replaced due to people leaving, 24 employees will be laid off in the US, Australia and New Zealand.
The restructuring had also created six new roles, Thomas said.
The goal is to position Volpara to break even in the last quarter of 2024 and then turn a profit in 2025.