Genetic Signatures Limited

Good afternoon, and thank you for joining Genetic Signatures Investor Webinar today. I am Stella Maurice of Monsoon Communications. In today's webinar, Genetic Signatures will share their healthier results and latest developments. Joining us are CEO Alison Rossiter and CFO Carl Packman to brief you on the details. Before we begin, I would like to highlight that you can submit questions using the Q&A function and we will get to them after the presentation. Similar questions might be grouped and would be answered at once. I will now hand over to Alison to begin.

Good afternoon, everybody. It gives me great pleasure today to announce our first half of 2025 market update. Starting with the highlights, our sales come in at a triple digit 136% improvement over the former half of 2024. This is predominantly due to strong respiratory season across Australia, a comeback after the flu B issue that we suffered last year, and some great UK progress with our enteric panels. Another positive message around our gross margin has also increased from 42% up to 59%. And our underlying loss is at a 20% improvement. So the three key figures there are all going in the right direction, which we're very, very proud to announce today. We do have a loss of 15.2 million recorded statutory loss. But that does include the 6.8 million impairment, which we'll speak about on the next few slides. We're in a strong cash position. We'll speak about that later too. And in terms of the 6.8 million impairment, we've gone through a strategic assessment of the technology landscape to make sure that we are bringing the best automated solution to market at a reduced cost and at a faster speed for the market. And we'll speak about that on the next slide too. And finally, I think the thing that everyone's been waiting for, we've secured our first US commercial contract this month over in the United States. So for the operational, our new strategic direction, I'm so pleased to announce this to you because since I've been here, we've undergone a commercial landscape assessment. We wanted to make sure that what we do going forward is the right commercial decision, is the right decision for our customers, and puts Genetic Signatures in the best possible place to be successful. We want to ensure that our three-phase technology will continue to work on whatever option we choose going forward. And so we made the decision to cease development of the next generation instrument that has been on pause for about 18 months. And instead, we're going to partner with an already commercial organization who specializes in making great analyzers. And we will work with them to bring tried and tested technology to the market, implementing our three-based technology, and where we will be able to develop the best infectious disease tests that we can to operate in an area that today has already has unmet medical needs. And we believe that this is the right way forward to bring success to genetic signatures and the patients in which we serve. That does result in a 6.5 million impairment, but we believe it is a decision that is right for the organization. Onto the US, I spoke about we've had the first order. I'm so pleased to announce that as well. Our opportunity in the US still remains large. As many of you already know, we were granted FJ approval towards June, July last year for our GI parasite tests. There are eight parasites on our panel, and it's the only panel of its kind in the market. The market opportunity is huge. And we are doing our very best to convert the 5.5 million tests, or as many of those as we can, to an automated method. There is a reimbursement code already in place. So from a financial perspective, this makes the conversion much, much easier. The market opportunity, many of you have seen this slide before, the market opportunity remains very large in the large reference laboratories. But we today, we are working through our 65 opportunities that we have in our funnel through all aspects of that slide there. So we work with the large commercial labs through to the hospitals, large and small, because every single laboratory we work with counts. So some of them are doing 10, 20 tests a day, others are doing hundreds of tests a day, but we want them all and we're working throughout all of those potential opportunities. So our first contract is signed and sealed. The laboratory started validation with an aim to go live in the next couple of months to start testing patients. Many of you are fully aware of our customer experience sites that we have been working with long before FDA approval was granted. I did share at the last investor meetings that we had that actually in the FDA, you cannot start procurement proceedings until FDA approval has been granted. And so a lot of the work started around July time with our laboratories in terms of getting the procurement bowls rolling. We've just seen the first example of that, although that was not a customer experience site. That was another one of our opportunities in the funnel. We are engaged with all the major laboratories, the major reference laboratories from the former slide, and there's a great interest there. We continue to raise awareness where we attend all of the conferences we advertise on the relevant websites and we work with the key opinion leaders to make sure that our message and our brand is out there with the people making the decision. We also have one of the US key opinion leaders and one of the UK key opinion leaders attending a conference in Vienna, one of the biggest microbiology conferences, which will be in Vienna this year in April. And I'll hand over to Cole now to talk through some of the financials. Cole.

Thank you, Ali. All right, so as Ali had mentioned previously, Genetic Signatures has recorded $8.5 million of revenue for the half year, which is an increase from the previous corresponding period of $3.6 million. This is primarily due to the extended respiratory season, which we have experienced in the Australian market and, yeah, has been a key contributor. Revenue from international markets was 9.4% of sales for the half and we do expect that to grow within the rest of the financial year. Revenue contribution from overseas was primarily from the UK and Irish markets and represented a growth of 28% when compared to the prior period. The team over in Europe have been focusing on growing the Enteric portfolio, and we're starting to see very strong sales momentum in that region for that portfolio of products. And to the next slide, please. With the financial summary for the half year, our gross margins, as Ali mentioned, it also increased to 59% in the half from 42%. The main primary reason for that improvement in gross margin has been due to active inventory management, which has reduced our obsolescence expenses, which we've incurred during the period. We've also done some really hard work within the organisation to do rationalisation of our product portfolio, which has really focused both the sales team in growing top line revenue in our markets, but also reducing the complexity within our manufacturing process. And that is also a key contributor to our improvement in margin. Employee expenses has increased in the half when compared to the prior period. This is a combination of an increase in salaries and on costs during the period, and also growing our team over the period compared to the corresponding period. I do also note that in last year, you know, with our influenza B issue, we did have a temporary reduction in staff hours, which did reduce our overall employee benefits expense in the prior period. So there are multiple factors there for that increase. Scientific consumables and clinical trials expense did decrease during the period compared to prior corresponding period, primarily due to the cessation of the respiratory trial in the US, which we announced in FY24. Depreciation amortization expense had increased during the year compared to the prior period. And that's mainly due to accounting differences with us entering into a longer-term lease for our headquarters here in Sydney, which resulted in a different accounting treatment compared to the prior year. And that was the primary reason for the increase in depreciation and amortisation expense for the period. Just to the next slide, please, Ali. In terms of capital management, so we did complete our $30 million capital raising, which was announced to the market in June 2024 and was completed in full in July of 2024, where we received $8 million of proceeds from our retail component of the capital raise. We also received $5 million from the Australian Research and Development Tax Incentive Program, which was relating to an expenditure on R&D for the FY24 year. Operating cash outflows for the period was $8 million for the half, and the company holds a strong cash position at the end of December at just over $40.8 million heading into the rest of the financial year. Back to you, Ali.