Vitura Health Limited (VIT) Earnings Call Transcript

Good morning, everyone, and thanks for joining the call today. My name is Geoff Cockerill. I'm Vitura's CEO. And I'm pleased to be able to present to you our full year '25 results today. Joining me on the call is our CFO, Tom Howitt. To the next slide, what we'll be doing is, today -- this morning, we'll be talking about and looking at Vitura's F '25 results and providing an update across the business. Our presentation will cover: a company overview, including several successful acquisitions we've made during the year; our F '25 highlights; a leadership and strategy update; an operational overview; and finally, our financial overview. We'll take you through this presentation for about 20 minutes, and then we'll have questions at the end. So please feel free to submit your questions through the portal, and we'll do our best to answer those at the end of the session. Just going on to the next slide. One of the areas that I wanted to talk about was, as we continue to evolve, we've refreshed our vision and mission statements to clearly articulate where we are going and how we will get there. In sharing these statements with the staff, it's been really pleasing that we've noted a high level of engagement because now the team can really focus on and understand what we're doing in the vision and mission. So, without going through that in detail today, it's really important that, that stays in the center of what we do because our vision is to lead the future of health care across specialty and emerging therapies. And our mission is what we're calling connecting. So, connecting across patients, clinicians, pharmacies, suppliers and all this done through a seamless platform. So, this will be rolled out, and I'll talk about this a little later also. To next slide, I'd like to start with a fresh company overview, which incorporates some of our recent M&A activity. So, Vitura is a leading digital health business in Australia. We offer patients a fully integrated end-to-end digital health platform, which provides quality health care at every step of their journey from GP consulting to medication dispensing. Critically and crucially, we capture the value at multiple points along the way, supporting sustainable business growth for the business. So, we facilitate consultations, prescriptions, distribution, logistics and a route to market, which is first class in the market that we compete in. And all these products are managed through our Canview platform and used by the majority of Australian pharmacies in the system. If you look at our brands here, Vitura is focused on innovative health care delivery. We're continuing to grow and integrate our portfolio of brands to provide the most efficient and seamless patient experience possible. If you go to the next slide, you'll actually see how we've broken that up. So, we're operating it under 5 distinct but interrelated segments. So, our General Practice Clinic is DoD or Doctors on Demand; our specialty clinics, including the recently acquired Candor Medical, which is now CDA including into that, so it's a really important part around our clinics; our joint venture with Flora includes the majority of the assets of the Releaf Group and Heyday Medical; our products are distributed proudly through Burleigh Heads Cannabis and Cortexa; and our marketplace, which we'll reference quite a lot today is Canview. So, Canview is our important asset that we need to invest in. A little bit about some company information. So, if we go to the next slide. So, our market cap as at yesterday was just over $46 million. And you can see that we've got major shareholders there, including Charlie Shahin, who is a prominent Australian businessman, who is now our largest shareholder. Charlie's initial $5.1 million investment in February this year was followed by additional share purchases in July and early August, and it underlies his confidence in the business. I do want to call out our other major shareholders that are listed there. And I want to call out all our shareholders for having confidence in Vitura and what we're doing. So, a big call out and thank you to all our shareholders. Next page. To look at some financial highlights, I've been at the helm for just over 8 months, and I'm really excited to share our results for last year. So, if we go to the next slide, I'll top line those. And as discussed, Tom can actually go through these with a little bit more detail. This table shows a high-level overview of our results that have just gone. As many of you are aware, the industry that we operate in has been tough. It's been a year of consolidation, it's been a year of challenging margins, and it's been a year where many companies in this space have not posted a profit, both public companies and other companies. So -- but in this last year, we've done more than that. We've bucked that trend, and I'm pleased to announce some of these results that you can see on the screen. Our revenue is flat year-on-year, but still positive in those tougher environments. Our EBITDA though was $7.63 million and up 23.5% year-on-year, so a really strong result. Our normalized EBITDA was $8.81 million, which was also up 5.1%. Our net profit was $3.06 million, down about 5.8% on F '24 and our normalized NPAT was $3.88 million that was down 8%. That did reflect some of that challenging margin area that we spoke about, and it also reflected some of our costs there around higher interest costs, increased tax expense and also some capitalized IT expenses that were in last year. It's important, though, that the normalized results shown here exclude acquisition-related expenses, exclude legal settlements with C4C or Code4 Cannabis and the TGA actions and certain write-offs that were involved with capital software. So, these adjustments will provide us with a clearer point of view as we move into next year. In addition to that, our EPS was slightly down from $0.84 to $0.64 last year. Okay. So, you can see that we've had a strong performance in EBITDA and normalized EBITDA in F '25. I'd also like to mention our disciplined cost control. Our operating expenses actually decreased by $640,000, and we demonstrated a lot of efficiency across our teams and operating models last year. We're also very pleased to reward our shareholders and declared a fully franked dividend for F '25 of $0.02 a share. So, a big congratulations there, and we feel proud to be able to offer that dividend to all the shareholders. On the strategic side and the growth side, we've made a number of acquisitions to further expand our patient and our revenues. So, for example, some of those are the Releaf Group. So, most of the assets we've acquired now through the Flora Holdings JV, we acquired Candor Medical in February '25. And we've also acquired most of the assets of Heyday Medical in May '25, all coming into that Flora JV opportunity. These acquisitions will help us drive further growth with our patient numbers across our systems now pushing towards the 50,000 mark. Other areas I'd like to highlight and talk about; certainly Doctors on Demand. So, our continued growth with this business is quite impressive. So, with our annualized revenues pushing towards $32 million or up 26% on the prior period. Also want to highlight the further investments that we said with Charlie Shahin underlying the confidence in the business. And also highlight that we've now completed the acquisition of the Copy of Canview from C4C, which have caused a number of problems in the business in previous years. And also, we've managed to settle all material, legal and regulatory disputes, which in a way to discuss it, is a really clear [indiscernible] for us to grow into F '26. If you look at -- just go to the next slide there, and you can actually see the new appointments. I won't go through each of them. There's new Board appointments. There's new exec appointments. And it's really brought a refreshing approach to the business. And I must say that it's a joy to work with the team because we've all got our common goals to try and achieve. We go through the strategy reset, this is probably something for people who have been following the company last year that's no surprise. We've had the 4 pillars. What we're doing is, we're not changing those into next year, and I'll talk about another one. Our 4 pillars remain the same. So, how do we strengthen our market position; how do we expand our customer and market base; how do we further enhance our technology, you've heard me talk about Canview. Canview is the key in this technology area; and again, how do we improve our financial performance. Hopefully, you've seen some good results and good progress in that in F '25, and that's our goal to continue that. The fifth pillar, which you'll see in future presentation is all about people. So, at the moment, we're rolling out the vision and mission that you saw earlier, and we're starting a program around the values in the business. So -- and really linking our values and our vision and mission to performance. We think that will be a really positive outcome to include people. Go to the next slide, I'll briefly update you on some of our operations before finishing with Tom around some deeper look at the financial side. So, if you look at the operations, it's -- what I've spoken about and continue to spoke about, it's hard to overstate how critical our centralized Canview technology position is and how we connect patients to their scripts and medication delivery. Canview is our core. In F '25, Canview distributed over 900,000 medicinal cannabis products. Based on our run rates and our positivity into next year, we believe that can exceed 1.2 million. So that's a lot of products to move through our system. Canview now boasts around 600 product SKUs, with 70 brands, more than 2,700 registered doctors, an app that has 18,000 users and more than 4,800 registered pharmacies across Australia. That's pretty much every registered pharmacy that distributes medicinal cannabis has access to this platform. That's a big highlight in the business. So, it's fair to say that Canview is the nerve center for us going forward. Okay. Talk a little bit about Doctors-on-Demand. We touched on it before. This business was acquired by Vitura in October '23, and it offers a 24/7 nationwide practice, telehealth practice service that operates 365 days a year. There is now over 350 doctors providing consultation services from general medical consults, urgent care, medical certificates, pathology referrals and specialist referrals. So, it's a very broad scope in DoD. DoD continued to grow strongly in F '25 with the total consultations up 25% and a record of 377,000-plus consultations. Our B2B business, which has been very successful, continue to grow and is up 37%. And we actually, only in June this year, hit a record consult for us. We had a record goal to hit 1,500 in that month. We actually hit 1,563 consults in June. So, some really strong performance across that business. We talk about acquisitions. Acquisitions and certainly what we've done and what I've been part of in the last year has been core of what we do. So, let's take a quick look at the more recent acquisitions and the progress that we've made with the integration. So, we acquired Candor, as we said back in February '25. So, with that acquisition brought more than 15,000 patients into that system for us to work with. It's a fully integrated digital platform that's the centerpiece of our new Specialty Clinics' division. So, very important and I'll talk a little about it. We're proud of what we've done. We're proud of the execution, but we have more work to do with Candor because we want to make this the leading clinic across Australia. In addition, our 42.5% JV approach with the Flora Holdings meant that we acquired the majority of the assets from the Releaf Group in April, May this year, another important part. Releaf's registered patients prior to execution were up to 30,000 patients. As we've acquired it, as we've developed, we're now trying to contact and get back as many of those patients as we can through that operating model. Again, we remain really positive about the Releaf Group model going forward. To look at synergies, if you go to the next slide. So, our synergies continue across the business. So -- and that is primarily focused on the CDA clinics with Candor and also the Cannadoc business that was pre-CDA also. Both of these businesses have now been successfully migrated into Candor's fully integrated platform for a more consistent and modern patient experience. And I'll say it again, we're focused on a high degree and a high level of execution in this area, and we want to keep doing better in this area. The assets also of Heyday Medical were acquired in May 2025, so -- and that further increases our scale and operations in that JV with Releaf. Finishing with the -- to finish the presentation before I hand over to Tom, I'd like to actually request Tom to just go through the detail of the financial results in more detail, and then we'll come back and add some comments at the end. So, I'll hand over to you, Tom.

Terrific. Thank you, Geoff, and good morning, everyone. If we could turn to the next slide. So, maybe we'll touch on revenue for FY '25 to start with. You'll see that our revenues are broken into the 2 distinct divisions of sales and distribution, which is effectively the sale and distribution of products and our consulting and service fees. You'll see there, sales and distribution, $96.3 million; consulting and service fees, $27.7 million; for a total of $124 million, which was flat year-on-year. I think it's worth observing though, that the results for July have got us off to a strong footing already. Our annualized sales and distribution revenues for the month of July have increased from $96 million to $113 million. And for the clinics division, it has gone from $27 million to $34 million, giving us an annualized run rate of revenue for July of about $147 million, which would be a big return to growth if that continues throughout the year. Obviously, the revenue figures, particularly for consulting and services includes the recently acquired businesses of Candor, Releaf and Heyday. And as those businesses continue to scale, it will help with the diversification of our revenues overall. Clinic growth does offset our price compression. We are focusing heavily on margin improvement throughout the portfolio of brands, and that's going to be a big focus for 2026. As Geoff pointed out, our OpEx for the year showed a pleasing decline of $640,000. That was despite the fact that it included the operating costs of a full year of Doctors-on-Demand and the partial year of costs associated with the new clinics that we bought. So, to bring those businesses on board and still deliver a decline in OpEx and an improvement of OpEx efficiency, I think, is very pleasing. And as Geoff alluded to, we have seen a resolution of the material legacy and regulatory disputes, which has not only reduced our legal spend by about $1.3 million, but more importantly, enabled the management team to focus solely on our core operations going into FY '26. Next slide, please. So, this is a quick review of our cash operations for the year. It's pleasing to see that our receipts from customers have increased. We have good cash flow receipts. We do well, collecting our cash receipts from customers on a timely basis. Offsetting that was an increase in our payments to suppliers. That's largely driven by the margin compression that we talked about before. Overall, net cash from operations fell during the year by about 60% due largely to that compression and also some other increases in interest received -- interest paid rather and a reduction in interest received due largely to taking on additional bank debt to pay out the balance of the Doctors-on-Demand acquisition costs. Next slide, please. So, this is a quick review of the balance sheet. Most of it is pretty self-explanatory. The decline in cash of about $3.7 million during the year. The main drivers of that can be summarized as the $6.25 million final payment for Doctors-on-Demand. You'll recall that when we bought that business, 1/4 of the total acquisition cost was on a deferred basis. And obviously, during that year, we had the anniversary of the acquisition, and the deferred payment was paid. We obviously had the acquisition costs on a cash basis of buying Candor Medical, and we have invested a lot in improving and refining the platform business, the platforms that we have within the business, which has been stimulated since the company acquired its Copy of the Canview platform during the year. In terms of where the cash has come from, as Geoff mentioned, we raised $5.7 million from Charlie Shahin and his related parties. We had a net drawdown of $3.9 million in funds from the ANZ Bank. That included $2.1 million of debt repayment during the year. And obviously, we generated $2.7 million in positive cash flows from operations. Overall, it's pleasing to see that the group's liabilities have decreased by 15% or about $5 million through the year. And obviously, as the business continues to scale and the debt gets repaid, we're confident going into FY '26 that, that debt -- those liabilities should decline further. With that, I think that summarizes all the key takeaways for the financials, and I'll hand it back to Geoff to wrap up the presentation.

Yes. Thanks again, Tom. So, look, just in summary, and I'll talk about a couple of areas here. But, in summary, we achieved growth in F '25 across both revenue and EBITDA lines and just reinforcing that OpEx efficiency of over $600,000. And all this was done despite all the things that we've been through; challenging market, resolving legal issues, a number of disputes in a number of areas that the team have done a great job on resolving. So, we remain focused on delivering further growth and scaling the operations into this year, and we anticipate providing a further update on our progress as part of the 2025 AGM later on this year. Pleasingly, as Tom said, July was off to a great start where we had $12.3 million in revenue and August is also looking positive. So, a challenge for us always keep the momentum, but we're focused on not just driving revenue, but profitable revenue going forward. So, if you go to the next slide, the investment thesis in the business still remains strong. We believe that the new leadership team has now settled into an operating rhythm, and we're executing well against the company's strategic reset. We will never be happy until we have great execution, so we will continue to do better in execution. We have again proven our ability to deliver initiatives and execute successfully on what's become a very highly competitive marketplace. Our new acquisitions are integrating well. So -- and we're really positive around where we're progressing with the Specialty Clinics. And as I'll keep saying we've more to do, and we will do it. Pleasingly, our medical consulting and service fees revenues are rising strongly. And we have clearly demonstrated the improvements across EBITDA and other metrics in the business. Finally, and perhaps the most important of all, we offer a growing number of patients to various [ clinics ] high-quality clinical care, and we have a high number of patients available to us. We're the benchmark for a holistic and genuine telehealth service delivery, not just an issue of prescriptions. So, we're looking forward to maintaining the momentum through F '26. Let's go to the next slide, and it is just a normal reminder of disclaimers that I just wanted to bring to everyone's attention. And finally, I just want to say thank you just on the last slide there. Thank you for everyone for taking the time out to listen. Thank you for those that are investors already, and thank you to those who are looking to invest to a higher percentage. As a team, we're remaining positive about this year, and we look forward to communicating further at the AGM later this year. So, I want to say thank you, everyone. And we'll just take a moment to check whether there's any questions that have gone through.

So, I might just get someone to help me with questions. So, just looking to my left, I think there's a question around the growth rate July, August versus last year. So, July-August versus July-August last year. So, we haven't looked at that in totality. So, we've more looked at where we're growing this year, but it is up. It is up on last year. So, it's up in terms of our margin, our total revenue generated, margin generate, we believe, is on the right side of the ledger.