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US expansion driving growth for Kooth
(Sharecast News) - Digital mental health service provider Kooth said in a trading update on Monday that it anticipated its 2023 revenue to reach £33.3m, representing year-on-year growth of around 65%. The AIM-traded company noted that the growth figure did not include $4m in revenue from US contracts initially expected to be recognised in 2023, but now scheduled for early 2024.
As of 31 December, Kooth reported an unaudited net cash balance of £10.9m, up from £8.5m in 2022.
Additionally, it secured a working capital credit facility with Citibank, amounting to $9.5m, which remained untapped.
Kooth said its strategic expansion into the United States saw the successful launch of its digital mental health platform and mobile app, Soluna, in California in January.
The company said it was currently in the final stages of negotiations with the state of Pennsylvania for a contract extension, building on its pilot programme initiated in October 2022.
In the UK market, Kooth reported revenue growth for 2023, but acknowledged the presence of near-term challenges due to a heightened focus on cost-saving within the NHS and the ongoing backlog of acute care cases.
Kooth said it was committed to demonstrating the positive impact and cost savings it could deliver when commissioned in various regions.
"2023 was a year of significant progress for Kooth, underlined by our largest contract win with the state of California," said chief executive officer Tim Barker.
"Alongside our work in Pennsylvania, Kooth is now a leader in the important US digital mental health market and a provider of choice for the provision of services to children and young people."
Barker said that momentum, combined with the firm's strong financial performance and its ability to generate recurring revenue, left it well-placed for further progress in 2024.
"The need for digital mental health services is as great as ever and we look forward to ensuring that Kooth remains a trusted and growing provider for children and young people both in the US and UK."
Further updates on Kooth's progress would be provided in its full-year results, which were expected to be announced in March.
At 1336 GMT, shares in Kooth were down 2.25% at 286.4p.
Reporting by Josh White for Sharecast.com.
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