Vitura Health Limited (VIT) Earnings Call Transcript

Good morning, ladies and gentlemen, and welcome to Vitura's 2025 Annual General Meeting. For those of you who don't know me, my name is Robert Iervasi, and I'm the Independent Non-Executive Chair of Vitura Health, and I'll be chairing the meeting this morning. I confirm that under the company's constitution, we do have a quorum today to proceed with the meeting. And I would like to extend my thanks to those shareholders and representatives who attended today in person and for those of you who are participating online. Today's meeting will be conducted as a hybrid meeting with shareholders present here in Melbourne and also virtually through the Computershare platform. Throughout the meeting, shareholders in person and online will have the opportunity to participate by asking questions on each resolution, and I'll pause for each resolution to see if there are any questions and voting. Should we experience any technical difficulties or issues, we will ensure that we will advise you of next steps and post any updates on the Computershare platform. The constitution of the company provides that the Chair of the meeting will conduct of the session today in accordance with general laws as well as the requirements of the Corporations Act. The agenda for today's meeting was set out in the notice of meeting that we issued on the 22nd of October this year and they are the matters that we will address in the forum today. Only shareholders of the company, their authorized proxies or corporate representatives, are permitted to vote and submit questions during the course of the AGM this morning. A general question-and-answer session will be held towards the end and as time permits, we'll ensure that we get to as many questions as possible. To enable us to answer questions from as many shareholders as possible, we might need to limit the number of questions but do feel free to post your written questions via the portal for us to deliberate on. The results of each resolution will then be posted on the company's website later on this afternoon as well as on the ASX. The meeting will be recorded, and a copy of the report recording will be placed on our Investor page on our website. Also, I would like to introduce my fellow directors and senior management with us today. Today, in person, we have our Non-Executive Director team of Daniel Birch, Gerard Fogarty, Shane Tanner, and Rebecca Wilson; as well as our CEO, Geoff Cockerill; and Chief Financial Officer and Company Secretary, Tom Howitt. A representative of our company's auditors, Pilot Partners, is also present here today. I'll now proceed on the basis that the notice of meeting that was released has been distributed to all shareholders and will be taken as read. And I also confirm that I'll exercise any undirected proxies given to the Chair in favor of resolutions 1, 2, and 4, noting that Resolution 3 was previously withdrawn. I'll start the meeting today by walking through a few instructions on how to vote and submitting questions to office holders who are attending, to shareholders who are attending online. Following that briefing, I'll invite Geoff Cockerill, our CEO, to present a summary of the company's performance and results for the 2025 financial year and also provide an update on current activities and what you can expect to see over the next few months. I will then return and conduct the formal meeting of business. So, to provide you with sufficient time to vote, I now declare voting open on all items of business. and I confirm that all votes will be conducted during the meeting by poll. We've appointed Computershare to conduct the poll and a representative from Computershare, who is here with us today, Michael Stretton, will be the returning officer. As voting has now opened, shareholders online may cast their votes on any time until the poll closes by simply clicking for, against, or abstain on each resolution. There's no need to formally hit the submit button or enter as the vote will be automatically recorded. You'll receive a voting notification as soon as the, on your screen once the vote has registered. For shareholders, proxies and corporate representatives here with us in person today, I'll ask you to vote once we've gone through all of the items of business by completing the blue voting card that would have been provided to you on admission. Shareholders with a yellow card are nonvoting shareholders as your votes have already been submitted and received by the company. I'll certainly provide you with an update and warning before the votes close at the conclusion of the meeting. Given it's a hybrid meeting, I'll first take questions for those participants who are here in person, followed by written resolutions and finally, audio questions from anyone joining us online. When I call for questions, please raise your card and I'll direct you to raise your question. For those attending online, please submit a written question online, and we'll ensure that we read those out to the benefit of all the group. Okay. We'll keep on going. Thank you for that. To ask a question verbally, do raise your hand and you're invited to speak. So that addresses the formalities of the conduct of the meeting today. What I'll do now is I'll hand over to Geoff Cockerill, who will join us to go over some of the financial results and operational outcomes of FY '25 and also give you a sense of what you can expect to see from us over the coming while. At the conclusion of Geoff's presentation, there will be an opportunity to ask questions. So, if you do have any questions specific to the content that Geoff is talking about, please reflect on those and raise those during the presentation, and I'll conduct the Q&A session with Geoff. Geoff, thank you. Over to you.

Good morning, everybody, and thanks for joining us today. So, whether you're here in Melbourne or in person or participating online, I welcome you to the AGM for '25-'26 period for Vitura Health. As Rob said, my name is Geoff Cockerill. I'm the CEO of Vitura Health, and I'm looking forward to taking you through what was achieved last year and more importantly, what we're looking at for the future. A quick reminder to everyone around the disclaimer in terms of that and any forward-looking statements, just be aware of that as we go forward. Joining me today, and thank you, Rob, for introducing, is you've met our chairman, so Rob and also our CFO and Company Secretary, Tom, will talk a little bit about Tom later. So, thank you for joining us today. Okay. Let's look at what's ahead and what we're going to go through. I want to talk through our vision and mission for '26. I want to give a brief company overview, talk about '25 at a glance, '26 strategy into action, and our priorities this year. So, you'll find that in terms of how we're looking at the business, we're keeping it very simple and very focused around what we're doing. So, you'll see some discussion around that ongoing through the presentation. So firstly, so let's start with our vision and mission, if we could just go to that. So as a board and management team, we spent a lot of time on what this is because this is really centered on what we are as a business. So, and our vision is to lead the future of health care access in specialty and emerging therapies. That's our vision. Our mission is to build a connected ecosystem of patients, clinicians, pharmacies, and suppliers through a seamless platform that delivers trusted access to specialty and emerging therapies. This underpins everything we do as a business going forward. So, if you go through top line company overview. So, I want to talk a little bit about that. So, if we go to the next slide. So Vitura captures value at multiple points through our ecosystem. So, in terms of, we capture patients, we capture suppliers, pharmacies, and clinicians right through the process, and that offers us revenue streams and margins right through this ecosystem. So, it's quite a unique position in the market. And what makes it even our differentiation is Canview, our platform, which I'll talk a little bit further. The other thing just to reinforce is still the scale of this. So, our ecosystem goes across almost all the pharmacies in Australia, close to 5,000 pharmacies. And in terms of what we do, we distribute over 50% medicinal cannabis products across Australia. So, and also, we have a large number of SKUs and the leading number of SKUs in the marketplace. So a big, big ecosystem that we work in. If we just go to the next slide, I want to talk a little bit about our growing portfolio. And this is quite important when you look at that. So there'll be a lot more detail on this as we go through. But there is a growing portfolio of interconnected brands. So we've spoken about Canview. We've spoken about CDA Clinics. We've spoken about Candor. We'll continue to speak about Doctors on Demand as we go through. And then we'll talk about other areas such as our joint venture with Releaf and our recent acquisitions across Heyday. We'll also touch on some of our other areas like Cortexa, across our psychedelics area and MDMA, and the whole sort of mixture of these brands we've got in the business. What is pleasing is that they are interconnected and continue to be interconnected as we go forward. If you go forward to the next slide. I just want to talk a little bit about the business, then we'll drop back into what I was talking about there around the brands. A little bit of company information. Approximately 662 million shares on offer and our market capitalization is around $43 million. We have a number of substantial shareholders in there, including people on the screen there, which we need to call out and say a big thank you to all our shareholders. You're all equally as important to what we do, and we value your input to the business and continued support for the business. If we just go on to some more of the results, the next slide. F '25 at a glance. If you have a look at this in our financials, in terms of last year, we had an operating revenue of around $124 million. Our EBITDA was $7.63 million and normalized EBITDA was $8.8 million, and our NPAT was just over $3 million as a business. Our normalized NPAT was $3.88 million and our normalized EPS was $0.064 a share. We were fortunate to pay a dividend to the shareholders of $0.02, and that's our third dividend that we've actually paid. Congratulations to the shareholders who deserve that return, and we're fortunate to be able to do that for you. If we go forward to the next slide. Some key takeaways from those numbers that I just spoke about. The annualized revenue was up more than 13% for the same figure last year. Our normalized OpEx was nearly 8% down, a key point. OpEx almost 8% down against our budget forecast and our OpEx efficiently dramatically improved to more than 21%, which was ahead of the forecast for last year. While margin pressures remain, we have clear strategies in place to drive the margin improvement and driving gross profit and further reducing OpEx remains our key focus in 2026 and beyond. Just go forward to the next slide. Our strategy into action. If we talk about this, and we'll go just to the next slide and go through these key areas. Now, last year, there was 4 key pillars, okay? There was 4 key pillars. There's a fifth one that we've introduced as a team. I want to talk about that first. This is around strengthening our team and company culture. There's been a lot of work done in this area around our team. It's my first year in the team. It's not just the management's first year in the team; it's also the Board's first year as a team. We've set about our values. We've set about our mission. We've set about really working hard in these areas and putting investment into our people because our people like many businesses are set around Australia. We've got that challenge on bringing them together and getting them aligned. We talk about strengthening our market position, this is one I think we should all be very proud of in terms of what we've done there. We gained significant market leadership in the last year. I call it momentum. Momentum is one of the most important things in business. There was some stalling of momentum in the business. We probably were chasing some higher margins at less revenues, and it probably just didn't work in that environment. We're balancing that now. We're actually strengthening our market position. We're looking at gaining that. I'm very, very clear that strong market share is the basis of where we need to be to grow. If you talk about expanding our market and customer base, so this is also where we've actually done a lot of work. We've increased our customer retention. We've got new customers coming into the market. Having Candor has actually given us this breadth of what we call fresh air with a lot of suppliers. We have a lot of supplier interest to get on the Canview that actually puts us in a unique position. Not that we pick and choose, but we actually look at the product, look at what I call SKU architecture and look at that margin return for the business. That is all based on that acquisition of Candor, that growing position in the marketplace has put us in a really, really solid position with expanding there. In terms of technology enhancement, we've done some work on Doctors on Demand, and we have more work to do on Doctors on Demand in terms of the platform. The positive with that platform, it works and it's solid, but we need to continue to invest in what we do there. What we also need to do is basically continue to invest in Canview. I need to state it, we will invest in Canview, and you're going to hear this a number of times going forward. We are a technology company. It is part of our mission, and we need to invest. Like all investors, technology, I would like to see greater returns more quickly. But if we don't invest in Canview, we can actually fall behind very quickly as our competitors do. Finally, financial improvement. Ultimately, all this is done with the view of return. Some of those returns will come in smaller windows or shorter windows. Others will come in longer windows, but that's what we're focused on is ultimately around that return. We've got a disciplined approach in this area. Very disciplined in terms of what our focus and priority areas here, and I'll actually end with that, which you'll see so that each of these priorities support the vision and the mission and these pillars. If we go forward, I want to talk a little bit about Canview. I'll make no apologies about the importance of Canview and how we'll continue to talk about it because it is our privileged asset. It is the nerve center of our business. If we were here 4 or 5 years ago, we would have said we had a unique position with Canview. We still have a strong position, but we don't have a unique position. There are people chasing us down in this area. We need to continue to invest, and we will invest in Canview as our privileged asset. What we must remember is we have only owned this platform for less than a year. It's all in the public domain around the C4C purchase and what we've done, but we've only owned this platform. We are rebuilding it. We are rebuilding the platform, and we're making it great. There's a lot of really, really interesting things in Canview, and we will continue to invest in it. If you go on to Doctors on Demand to the next slide. Doctors on Demand has actually done really well behind the scenes for the business. As we put all that focus into Candor and Canview, Doctors on Demand again was only acquired in October '23. We need to say, again, this is quite a unique asset around it's a 365-day product, so 24/7, and we have now over 350 doctors on the platform. It's a scalable business. Again, it has continued strong growth in '25. Our annualized revenue now is over $30 million for this business. We're hoping to be around that $32 million mark. The consultation numbers are actually up 25%. It's a good result there. Continually, we celebrate. 1,500 consults was this panacea of consults that we celebrate. Now we're actually celebrating it a lot of the days. We haven't put another number out there yet. But certainly, there's record consultations happening through there. B2B or business-to-business growth was up 37% year-on-year, and we've got further B2B customers that we'll be announcing in the next period. Just want to probably end on Doctors on Demand, and it's important as we go through with margins. I'll just go back to Doctors on Demand in terms of B2C that's there. There's a conscious decision around our margin that we're not going to just celebrate success around consultation numbers. We want to drive the margin. We will balance B2C between marketing investment, return on that or ROAS, Return On Ad Spend. We'll keep balancing that as per our direction around margin. We're not just chasing consult numbers, but there's good returns. Thank you. I'll just go forward there. Okay. Acquisition is driving growth. I am going to spend some time on the next couple of slides. We'll go on to Candor. Candor Medical was acquired by Vitura in February this year, only this year. It has delivered close to 15,000 active patients into the network, and it forms the centerpiece now of our specialty clinics division. Flora Holdings, which Vitura holds 42.5% was also acquired and also acquired the Assets Releaf Group only in November 2024. It's only a year ago that we've acquired those assets in Releaf. If you think of our specialty clinics pieces, they're the 2 in there. Releaf also has delivered close to 30,000 active patients, but we're still actively reengaging with them. There's a whole lot of stories around the Releaf business and what happened there. It was a big business. We're building it back up in terms of reengaging with those active patients. All new medical staff we have on board are driving more consults, and we also recently acquired Heyday into that mix. I'll go to the next slide, and I'll just pause for a moment. Just go to the next slide, please. I want to talk about Candor, and I want to talk a couple of things on Candor. And what I want to acknowledge that in terms of the Candor acquisition, there's some elements of that Candor acquisition that are not to our high standards. We have very high standards as a business. And I want to acknowledge that there was some feedback and has been some feedback across the social networks that don't meet our expectations. The positive is we've now addressed that. So, and the positive is, if you look at clinics, we actually have the lowest wait time to see a doctor in the industry at this point in time. I just want to say that again, in terms of our reviews and our negative things, not where we wanted to be, recent areas are very positive. If you look at the recent Google reviews and so on, very good. Waiting times, on track. So, what that means now is the Candor website that's in front of you, that website has actually been done for the last three months. We held off because we had, we're trying to get through the patient queue, we held off the website, so we didn't want to drive more patients into the business. Now we do. Now we do, and that's the website. And I really encourage you to get on to this website. It is industry-leading in terms of my peers that I work with across the industry. They are quoting that themselves and undoubtedly will copy some of the things we've done. It's there's mobile-first optimization, there's an improved user experience. There's great search engine optimization functionality. And the bottom thing is back to what we're doing is measurement. We'll start measuring these patients coming into the system, and this provides us with the framework. So very, very proud of this website. We're very proud of what it will do. So, it's a great job by the team. So, if you go forward to the next slide, please. Now our priorities, I want to talk about this. And if you just go to the next slide, you'll see they're pretty simple in our articulation, okay? So, if you think of where we've got to as a business, and I want to go back to Candor I want to go back to Releaf. We've built an awesome funnel in these two businesses. So, and the funnel, we need to now fill with patients. So, and that is our #1 priority. patient acquisition and retention. So, there'll be a balance between those two. When we fill the funnel and we go, and we put more patients in, that improves our economies of scale. It improves our margin and ultimately improves all the measures across OpEx. So that's a key thing for what we're doing. The next thing, and this is certainly important to our values is producing a consistent supply of quality doctors, okay? So, I want to pause on that quality doctors. Where we may have some problems with wait times, it's about getting doctors. Now we just don't get any doctor. We actually screen our doctors. And fortunately, or unfortunately, we exit some of our doctors because this is bang in our vision and mission and values about quality doctors, and we'll continue to do that. And when you talk across the industry to people, we're well known across that. And we're well known about our clinical governance, and we're well known across what we try and do. We will now scale and continue to scale doctors on demand, you saw some impressive numbers there. There's other plans in process around B2B and some areas that we'll evaluate across B2C. And our absolute laser focus will be around margins, how do we improve margins. So, it rolls off the tongue quite easily. How you do that in this ecosystem is quite complex, but achievable. And we've got a number of strategies in place to do that. Technology investment, I've said it, I'll continue to say, we will be investing, and we will be investing ahead of the curve on Canview, and we'll keep a laser focus across our OpEx, but doing that and trying to create a winning team. So we want to balance that across those two. So finally, if you go to the next slide, we'll talk about in summary. I want to talk about in summary where we've seen the year. So, we are executing well against the strategic reset. The four pillars that were actually presented almost a year ago that are now five, we're executing well. We acknowledge we can always do better, and we will continue to do better, but we're doing a good job across that. We have proven delivery and execution across many pieces in our marketplace. We've referenced some of the areas that we can improve on, but across many of others, we're first class. When you talk to our suppliers, when you talk about how Canview works, when you talk about how early head cannabis distribution work, we're world-class. So we're doing a lot of things right in that area. Our new acquisitions are integrating well. Like all of us, we want them to be more quicker and more efficient and deliver more. They will, they will, and they're integrating well. And medical consulting and fees are rising. So, and we're actually keeping a track on all that and looking at alternative revenue sources there. And as I've said, and I will continue to say, clinical care is a quality benchmark for telehealth. What people need to know is when you get into Releaf and when you get into Candor, they are staffed with doctors, nurses, clinical specialists, specialist doctors recruiters and specialist educators. We have a breadth of medical and clinical experiences across our business, a breadth of clinical and medical experience in our business. So, and we will continue to invest in that. New verticals, we'll look at that. And we're not looking at verticals to put a name on a page and do that. We're looking explicitly across the opportunities that continue with nicotine vaping products, and we are exploring some other verticals in there, and we'll continue to do that. And finally, as I've said, diligent cost control. We will always continue to look at operational efficiencies. We'll continue to look at our spends versus our net margins and do that. But our structure that we built, we've built against the strategy, but we will continue to review that structure and review the resources due course in the business. So, thank you for that. It's just a brief overview in less than 20 minutes of a whole 12 months of work from everyone and everything. So, what I think is really positive with what we're doing is it's all visible. So, you can see what we're doing. You can see our websites; you can see our reviews. It's all there in the public domain. So I encourage you to really continue to look at the business. And like we're doing with our shareholders, we want to celebrate the results because this industry, like many, is tough. So, but we're in a great spot to actually be in a position going forward. So, we remain extremely confident about next year. So in summary, thank you very much for listening, and I'll hand back to Rob. Thank you.

Thank you, Geoff, for the presentation in the context of not only 2025, but what you can expect to see from the company over 2026 and beyond. We did mention we would have a general Q&A post Geoff’s presentation to consider some of the topics that were raised. in the context of those strategies and initiatives that he spoke about so passionately. We've received two questions in advance of the meeting today. So, I would pose those two questions first. And also, some of that, those questions that I'm about to pose were also in the sentiment of some of the questions that have come through the Computershare portal. So, we'll address those as a collective. One of the questions, Geoff, you have already answered in the presentation, but I think it's so critically important that I'll pose the question again, so we all leave with the same understanding. The question relates to the performance and the reputation of our clinics business, given the sentiment in the market about long wait times, nonavailability of doctors and potentially patients being compromised as a result of that. Perhaps it might be an important juncture just to explain where we're at on our journey when it comes to that critical point of health care. You can take the question.

Sure. Well, hopefully, I covered that. But yes, look, we acknowledge it was wait times. And look, in terms of what we do as a business is we do our research around wait times. And look, we bought the business of Candor and the average wait time when we bought it was 20 days, okay? So, when we bought it. Yes, have those wait times got out to 28 days, it fluctuates because it's all based on doctor availability and nurse availability. But what we've done is take it head on. We take it head on, and we put a whole lot of resource into that and actually got the wait times down to what's a leading position in the marketplace. I do a lot of work with the MCIA Board, and we talk about clinics, and there's a number of leading clinics out there at the moment and probably in the top 1 in the top 3 who actually openly spoke about they're not seeing a patient until mid-January; they shut the doors. So, it's not a Candor problem. It's not a Vitura problem. It's an industry problem, but we're taking it head on, and we're actually confident that we've addressed that, but it's not going to, we haven't solved it. We've got to continue to do it. And maybe if there's some cynicism from some people that are big hang on as the patient numbers dropped off? No, they haven't. So, we need to drive that, and we will drive it going forward. So we're confident in that area.

Thank you, Geoff, and thank you for the confirmation that we've returned back to a leading position when it comes to sort of patient care and wait times. I appreciate that. One of the other questions that came through in advance, and also, as part of the online platform was a question around revenue and the organization's focus on revenue. It's interesting to note that our quarter 1 revenue is up about 13% for the same period last year. So certainly, the revenue growth is something that we challenge and task the management team to deliver. But the question specifically, Geoff, is the focus on who has accountability for revenue in the exec team and the organization and how we hold those team members accountable.

Well look, the ultimate accountability is with me, the ultimate, and look, I'm supported by Chief Revenue Officer and how we hold them accountable like all our employees is OKRs or KPIs in the modern business environment around both revenue and margin. What we're doing is actually balancing that going forward. So if you look to who is accountable across revenue, me and then ultimately through to Ryan Tattle, who is our long-term employee, the two of us work hard in balancing both revenue and margin going forward.

Great. Thank you for that, Geoff. Just checking in as to whether there are any other general questions, time associated with the presentation for the group today.

I talked about all the questions.

Only those specific to the presentation.

There was one question here, from Sarah Jansen. You mentioned annualized revenue for DoD at $32 million. What's the average profit margin on that?

Great. Thank you for that question, Sarah. Tom, perhaps in your capacity as CFO, can you provide some insights on the gross margin percentage for Doctors on Demand?

Of course, happy to, Rob. The gross margin at DoD is influenced by a number of factors. Obviously, the percentage of consults conducted in business hours and after hours and also the percentage attributable to our B2B customers versus our B2C customers. At a blended average, it's about 35%.

Great. Thank you for that, Tom. As I mentioned before, we'll pause for questions associated with each of the resolutions as well. So with that in mind, I'd now like to turn to the formal business of the meeting and take that forward. The first item of business as ordinary item is consideration of the financial statements. So if we could please move to that slide. Excellent. Thank you for that. It's to receive and consider the company's financial report, directors' report, and auditor's report for year-end 30 June 2025. Do any of the shareholders or anyone in the room today or online have any questions in relation to consideration of the financial statements? No. You can see on the screen the proxies received in relation to Resolution 1, which would be carried.

Yes, this is the remuneration report.

Remuneration report. Sorry, we're moving on to the remuneration report. Any questions on the remuneration report? No. And as I mentioned, that would be carried. We'll move on to the next resolution. Thank you. The next resolution is in consideration to appointment of myself as a director, which I'll hand over Rebecca to run through.