FY 2026 Paragon Care Ltd Earnings Call

August 26, 2026

Speaker #1: Thank you for standing by, and welcome to the Paragon Care Q1 and Q2 results conference call. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the Paragon Care FY26 Results Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms. Carmen Riley, CEO and Managing Director. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Ms. Carmen Reilly, CEO and Managing Director.

Speaker #1: Please go ahead.

Speaker #2: Thanks, Mel. Thanks, everyone, for joining the call. I'm here today with Brendan Pentland, who's our CFO. I'll take you through the highlights, and Brendan, of course, will take you through all the financial details. As Mel said, we'll wrap up with some questions at the end.

Carmen Riley: Thanks, Mel. Thanks everyone for joining the call. I am here today with Brendon Pentland, who is our CFO. I will take you through the highlights, and Brendon, of course, will take you through all the financial details. As Mel said, we will wrap up with some questions at the end. From an underlying position, our revenue for the year was solid at AUD 3.7 billion, EBITDA AUD 97.2 million underlying, and net profit after tax AUD 26 million. From a statutory perspective, revenue stayed the same at AUD 3.7 billion, EBITDA AUD 50.8 million, and we produced a net loss of AUD 16 million. Obviously, the majority of that is from our write-down of Infinity, which we will take you through in a bit more detail later. If you just want to turn the slide, Mel. Okay. As a recap, we launched our 3-2-1 strategy two years ago when Paragon merged with Clifford Hallam Healthcare.

Speaker #2: So, from an underlying position, our revenue for the year was solid at $3.7 billion. EBITDA was $97.2 million, underlying. And net profit after tax, $26 million.

Speaker #2: From a statutory perspective, revenue stayed the same at $3.7 billion. EBITDA was $50.8 million, and we produced a net loss of $16 million. Obviously, the majority of that is from our write-down of Infinity, which we'll take you through in a bit more detail later.

Speaker #2: So if you just want to turn the slide, Mel. Okay, so as a recap, we launched our Q2 and Q1 strategy two years ago, CH2.

Speaker #2: We also included Oborne Health Supplies in this at that time as well. That is now completed and closed. But firstly, before I get through that detail, I thought I'd just touch on Infinity.

Carmen Riley: We also included Oborne Health Supplies in this at that time as well. That is now completed and closed. Firstly, before I get through that detail, I thought I would just touch on Infinity. At the H1, we did take a full provision for that. As you all know on the call, we have been working through the process with administrators as that was put into receivership and then administration at the end of the last calendar year. That is a long process that we are working through, and it is a very uncertain process through the administrators. They have been excellent to deal with, but we do have to work closely with them and other creditors as we draw that hopefully to a close sooner rather than later. But during that process, and based on the administrator's most recent report, we have taken the position to write back AUD 9.2 million.

Speaker #2: So, at the half-year, we did take a full provision for that. As you all know on the call, we've been working through the process with administrators, as that was put into receivership and then administration at the end of FY, at the end of the last calendar year.

Speaker #2: That is a long process that we're working through, and it is a very uncertain process through the administrators. They've been excellent to deal with, but we do have to work closely with them and other creditors as we draw that, hopefully, to a close sooner rather than later.

Speaker #2: But during that process, and based on the administrators' most recent report, we've taken the position to write back $9.2 million, and when we take that into account for the full year, we've then provided $38 million for Infinity—and that's net of the GST that we've already claimed.

Carmen Riley: When we take that into account for the full year, we have then provided AUD 38 million for Infinity, and that is net of the GST that we have already claimed. That said, even though that was a very difficult setback, and we will talk about it during the wrap-up, and obviously I will take any questions on that at the end. We are certainly not taking our foot off the pedal on what we can claim during the administration process. After that closes, we will certainly be going after personal guarantees. That said, though, we do have to move forward as a business and make sure that we are driving the business forward, rather than continuing to look backwards with the Infinity overhang. On that, during the time of the 3-2-1, and particularly most of this was completed during FY26, we have merged all of the Australian businesses now onto JDE.

Speaker #2: So, that said, even though that was a very difficult setback—and we'll talk about it during the wrap-up, and obviously I'll take any questions on that at the end—we're certainly not taking our foot off the pedal on what we can claim during the administration process.

Speaker #2: And after that closes, we'll certainly be going after personal guarantees. That said, though, we do have to move forward as a business and make sure that we're driving the business forward, rather than continuing to look backwards with the Infinity overhang.

Speaker #2: So on that, during the time of Q2, Q1, and particularly, most of this was completed during FY26, we've merged all of the Australian businesses now onto JDE. That excludes the service business, which was moved onto NetSuite.

Carmen Riley: That excludes the service business, which was moved on to NetSuite. We have consolidated all of that, and that includes consolidating all of the legacy Paragon Care businesses onto those platforms. That does exclude manufacturing, and we have decided to keep that because it is a bit more complicated onto SAP. We did commission the new Brisbane site and very pleased, even though that was delayed and caused us a bit of pain in the H1. We did open that site in January, and we then went fully live with that in June when AutoStore went live into place on that. That is our first fully automated DC. That also included us moving to a Tier 1 WMS warehouse management system, and that is Manhattan. We will continue to roll that out down the eastern seaboard into FY28.

Speaker #2: So we've consolidated all of that, and that includes consolidating all of the legacy Paragon Care businesses onto those platforms. That does exclude manufacturing, and we've decided to keep that because it's a bit more complicated to move onto SAP.

Speaker #2: We did commission the new Brisbane site and are very pleased, even though that was delayed and caused us a bit of pain in the first half. We did open that site in January, and we then went fully live with that in June when AutoStore went live into place on that.

Speaker #2: So that's our first fully automated DC. That also included us moving to a Tier 1 WMS—warehouse management system—and that's Manhattan. We'll continue to roll that out down the eastern seaboard into FY28.

Speaker #2: So we did realize all the synergies that we committed to at the beginning of the Q2, Q1 strategy, and we have used some of those to reinvest back into the business.

Carmen Riley: We did realize all the synergies that we committed to at the beginning of the 3-2-1 strategy, and we have used some of those to reinvest back into the business. We have reinvested back into our sales team, our marketing team, and also some of our acquisitions. That was done as well. That is exciting for us because it is around the growth platform moving forward, as part of restructuring the business. We have also, based on that restructure, we have taken it a step further and also fast-tracked certain things at the beginning of the year based on our Asian footprint, and that included expanding our office in the Philippines and also opening a shared service office in Jakarta. We now have over 100 people in our shared service team offshore supporting the Australian business. Most of those are based in the Philippines.

Speaker #2: So, we have reinvested back into our sales team, our marketing team, and also some of the acquisitions that we've done as well. That's exciting for us because it is all about the growth platform moving forward as part of restructuring the business.

Speaker #2: We have also, based on that restructure, taken it a step further and fast-tracked certain things at the beginning of the year based on our Asian footprint. That included expanding our office in the Philippines and also opening a shared service office in Jakarta.

Speaker #2: We now have over 100 people in our shared services team offshore supporting the Australian business. Most of those are based in the Philippines.

Speaker #2: We also have talked about, and committed to, taking all the cost out of the business with the exit of the Ramsey contract. So I'm pleased to say that we've done that, and that's been executed very well.

Carmen Riley: We also have talked about and committed to taking all the cost out of the business with the exit of the Ramsay contract, so I am pleased to say that we have done that and that has been executed very well. Then on a more pleasing note, we have had a number of new contracts across all of our business units, which has been very good. But without a doubt, the most honorable for us has been winning the Australian Defence Force contract, which started. Well, we did start a little bit in the end of June, but it fully starts FY27. So that has been a great outcome. You will see also, as part of our reinvestment back into the business, that we have ramped up our digital presence.

Speaker #2: And then on a more pleasing note, we have had a number of new contracts across all of our business units, which has been very good, but without a doubt the most honourable for us has been winning the Australian Defence Force contract, which started what we did start at the end of a little bit in the end of June, but it fully starts FY27.

Speaker #2: So that's been a great outcome. You'll see also, as part of our reinvestment back into the business, that we have ramped up our digital presence. If some of you jump online, we've just recently, in the last couple of weeks, launched our new website, which is great and certainly showcases the absolute breadth of the business that we have, as well as our geographical reach.

Carmen Riley: If some of you jump online, we have just recently, in the last couple of weeks, launched our new website, which is great and certainly showcases the absolute breadth of the business that we have, and also our geographical reach. Without a doubt, since March, like all businesses, we have had quite a number of headwinds to do with the war in the Middle East. Unfortunately, we have had the impact of fuel costs hit our business like they have on all logistics business. So we have been navigating that. We have tried and altered some of our freight to make sure that we have taken as much pressure off our cost base as we can, but we have had some challenges with that, particularly in the last quarter.

Speaker #2: So, without a doubt, since March, like all businesses, we've had quite a number of headwinds to do with the war in the Middle East. Unfortunately, we've also had the impact of fuel costs hit our business, like they have on all logistics businesses.

Speaker #2: So we've been navigating that. We have tried and altered some of our freight to make sure that we've taken as much pressure off our cost base as we can, but we have had some challenges with that, particularly in the last quarter.

Speaker #2: And we've also had some challenges with our stock because we wanted to ramp our stock down, but as committed with some of our supply partners and the fact that they've had some shipping channel challenges, our stock ended the year a bit higher than we would have liked.

Carmen Riley: We have also had some challenges with our stock because we wanted to ramp our stock down, but as committed with some of our supply partners and the fact that they have had some shipping channel challenges, our stock ended the year a bit higher than we would have liked. I think that is prudent and in good faith of the Australian customer base and our suppliers to make sure that we have the stock available. We also did have some challenges around foreign exchange for the year. That should be no surprise to anyone on the call. That was particularly hit out of New Zealand, Thailand, and Korea. They were our most difficult challenges. As I said, should be no surprise to everyone here on the call, being a logistics business, but we are moving through those.

Speaker #2: But I think that's prudent and in good faith of the Australian customer base and our suppliers, to make sure that we have the stock available.

Speaker #2: We also did have some challenges around foreign exchange for the year. That should be no surprise to anyone on the call. That was particularly the case out of New Zealand, Thailand, and Korea.

Speaker #2: So, they were the most difficult challenges, as I said. It should be no surprise to everyone here on the call, being a logistics business, but we are moving through those.

Speaker #2: Nonetheless, ending on a positive note on this slide, most importantly, is around our people. So, I'm really pleased to let everyone now know we have a full leadership team in place.

Carmen Riley: Nonetheless, ending on a positive on this slide, most importantly is around our people. I am really pleased to let everyone now know we have a full leadership team in place. As you know from this time last year, Brendon is new. We have had a couple of changes in that team, but I am now very confident that we have got the bench strength in that team to drive the business forward and also to lead the rest of the team at Paragon Care. When I look at the team and the culture of the business, the team at Paragon Care should be absolutely thrilled at that underlying result that they have presented today, and they have done an exceptional amount of hard work to get there. We have got a great team to lead the business forward. Just in a slide. Thanks, Mel. Just onto capital allocation.

Speaker #2: As you know, from this time last year, Brendan's new. We have had a couple of changes in that team, but I'm now very confident that we've got the bench strengths in that team to drive the business forward.

Speaker #2: And also to lead the rest of the team at Paragon Care. When I look at the team and the culture of the business, the team at Paragon Care should be absolutely thrilled with the underlying result that they've presented today, and they've done an exceptional amount of hard work to get there.

Speaker #2: So, we've got a great team to lead the business forward. Just in the slide—thanks, Mel. Just on to capital allocation. As I touched on earlier, and as you’ve seen, we’ve actually done six acquisitions this year: three were based in Australia, and three up in Asia.

Carmen Riley: As I touched on earlier, and as you have seen, we have actually done six acquisitions this year. Three were based in Australia, three up in Asia. The Australian business really gave us a footprint into some of our new areas, particularly around dental. The Asian acquisitions were not only around the breadth of supplier contracts that we could grab onto in those acquisitions, but also expanding our footprint out. We are now expanded out into Malaysia, Singapore, Hong Kong, and Indonesia. We have also set up our Asian head office in Singapore. That has all been established and is all in place as we speak. Our CapEx. CapEx was predominantly around our Brisbane site and the work that was done around our integration work over the last 12 months. That will settle down and go back to a more normalized level in FY27.

Speaker #2: The Australian business really gave us a footprint into some of our new areas, particularly around dental, and the Asian acquisitions were not only about the breadth of supplier contracts that we could grab onto in those acquisitions, but also about expanding our footprint out.

Speaker #2: So, we've now expanded out into Malaysia, Singapore, Hong Kong, and Indonesia, and we've also set up our Asian head office in Singapore. So that's all been established and is all in place as we speak.

Speaker #2: So our capex was predominantly around our Brisbane site and the work that was done around our integration work over the last 12 months. That has all settled down and will go back to a more normalised level in FY27.

Speaker #2: Interest is a bit higher—well, a bit higher than what we would have liked—but some of that's aligned with our synergies when we did refinance the Spot Pack facility.

Carmen Riley: Interest, a bit higher than what we would have liked, but some of that is aligned with our synergies when we did refinance the ScotPac facility. However, with the spend on some of our CapEx, that has increased it a little bit this year and obviously with the increase in interest rates as well. Just turning over to the next slide. Thanks, Tian. Just running through our sales channels. Wholesale had a good year despite the loss of Ramsay and Infinity. If we normalize that backing out Infinity and Ramsay, the revenue growth was 1.5%. I know some of you might think, "Well, that does seem a little bit low." There were a few drugs that moved back to compounders.

Speaker #2: However, with the spend on some of our capex, that's increased a little bit this year, and obviously with the increase in interest rates as well.

Speaker #2: So, just turning over to the next slide—thanks, Tian. Just running through our sales channels: Wholesale had a good year, despite the loss of Ramsey and Infinity.

Speaker #2: So if we normalise that, backing out Infinity and Ramsey, the revenue growth was 1.5%. I know some of you might think, well, that does seem a little bit low.

Speaker #2: There were a few drugs that moved back to compounders. So, if you know the pharmacy channel, we had three or four high-cost drugs—just three or four SKUs, high-cost drugs—that moved back to compounders or went direct.

Carmen Riley: If you know the pharmacy channel, we had three or four high-cost drugs, just the three or four SKUs, high-cost drugs that moved back to compounders or went direct. We also had a generic drug enter the market with Prolia. If I backed those five SKUs out, our market rate growth was sitting between 8% and 9% in the pharmacy channel, which was an excellent result and really fantastic recovery by that team as well. From a medical technology perspective, double-digit growth. Without a doubt, I think Asia knocked it out of the park. We certainly held our own in Australia and New Zealand with some of the headwinds that we had in that space. Contract logistics, talked about before. We had a refresh view of our sales strategy a couple of years ago in that channel, and that certainly outperformed since we have relaunched that.

Speaker #2: And we also had a generic drug enter the market with Prelia. So if I back those five SKUs out, our market rate growth was sitting between 8% and 9% in the pharmacy channel, which was an excellent result and a really fantastic recovery by that team as well.

Speaker #2: From a medical technology perspective, double-digit growth. So without a doubt, I think Asia knocked it out of the park, and we certainly held our own in Australia and New Zealand with some of the headwinds that we had in that space.

Speaker #2: Contract logistics—talked about before, we had a refreshed view of our sales strategy a couple of years ago in that channel, and that's certainly outperformed since we've relaunched that.

Speaker #2: That growth is out of both organic growth, but also new business wins. So, over the last 12 to 18 months, we continue to pick up new business.

Carmen Riley: That growth is out of both organic growth, but also new business wins over the last 12 to 18 months, and we continue to pick up new business. Another great result. Clinical manufacturing, but not least, had growth, underlying pretty solid growth, and we have got a new Cadelle auto contract that is now come into play, and we have started manufacturing in that process. Our first lot of exports will be done up into Japan, and that contract will continue to grow scale over FY27 and into the future as well. There are some great opportunities inside our clinical manufacturing clients. I will just hand over to Brendon before you come back to me just to go through the details of the financials.

Speaker #2: So, another great result. Clinical manufacturing had underlying, pretty solid growth, and we've got a new Quidel Auto contract that's now come into play, and we've started manufacturing in that process.

Speaker #2: Our first lot of exports will be done up into Japan, and that contract will continue to grow in scale over FY27 and into the future as well.

Speaker #2: So there are some great opportunities inside our clinical manufacturing clients. I'll just hand over to Brendan before you come back to me, so he can go through the details of the financials.

Speaker #1: Okay, thanks, Carmen. So I'm on slide nine. Yeah. So pleased to join this morning and take you through the financial results and financial position at the year end.

Brendon Pentland: Okay. Thanks, Carmen. I am on slide 9. Yes, so pleased to join this morning and take you through the financial results and financial position at the year-end. Carmen has talked to a few of the, I guess, those normalized factors that we back out of our result, just to give you a sense of what the like-for-like performance of the business looks like. We have also included a couple of slides, which you are accustomed to now, around our revenue bridge. I will talk to those in due course. We have also included, this time, an underlying earnings bridge. Really provide you all a through of the numbers, which I think we hope you will find useful. Just at a top line, that underlying revenue growth, before the normalizations, was 1.8%, and after the normalizations, 6.7%.

Speaker #1: And Carmen has talked to a few of the, I guess, those normalised factors that we back out of our result, just to give you a sense of what the like-for-like performance of the business looks like.

Speaker #1: We've also included a couple of slides, which you are accustomed to now, around our revenue bridge. So I'll talk to those in due course. And we've also included, this time, an underlying earnings bridge.

Speaker #1: So it really provides you all a look through of the numbers, which I think we hope you'll find useful. So, just at a top line, the underlying revenue growth before the normalisations was 1.8%, and after the normalisations, it's 6.7%.

Speaker #1: And when we talk about the normalisations, again, you'll see those on the revenue bridge. But that is taking into account the impact of Infinity, Ramsey, and FX predominantly.

Brendon Pentland: When we talk about the normalizations, again, you will see those on the revenue bridge, but that does take into account the impact of Infinity, Ramsay, and FX predominantly. One of the metrics that we do look to is our organic growth after the normalizations. We think that is a really healthy number at 6.7%. There is growth across most of the channels in there. Contract logistics has been a really strong performer for us at the revenue level and also the Asian business, which we will get to in due course. Of course, we do have the contribution from our acquisitions, both in A and Z and Asia, which has contributed to our growth. Again, their contribution identified on the bridge. Along with the revenue contribution, what that does is broadens our geographical reach, our product range, our customer reach, and our capability offer.

Speaker #1: One of the metrics that we do look at is our organic growth. After the normalisations, we think that's a really healthy number—it's 6.7%.

Speaker #1: There's growth across most of the channels in there. Contract logistics has been a really strong performer for us at the revenue level, and also the Asian business, which we'll get to in due course.

Speaker #1: Of course, we do have the contribution from our acquisitions, both in A and Z and Asia, which has contributed to our growth. And again, they are identified, their contributions are identified on the bridge.

Speaker #1: But along with the revenue contribution, what that does is broaden our geographical reach, our product range, our customer reach, and our capability offer. And what we have established now is a truly geographical and regional presence and focus in that area, building out a team that has responsibility over all of the nine territories that we are in, and extending our capability across the countries rather than working in silos.

Brendon Pentland: What we are establishing now is a truly geographical and regional presence and focus in that area and building out a team that has responsibility over all of the non-territories that we are in and extending our capability across the countries rather than working in silos. So, really pleasing contribution from those entities. The unfavorable revenue impact from the translation of foreign revenues is also identified in the bridge, as Carmen said, is New Zealand, Thai Baht, and Korean won in that sense. I'll just move on to underlying EBITDA at a growth of 2.1%. So just to, I guess, reinforce this, that number excludes the impact from the Infinity Group debt provision, the restructuring and integration costs. As Carmen said, they are associated with the 3-2-1 program, which is now complete. The M&A costs, we have had a busy M&A year.

Speaker #1: So, really pleasing contribution from those entities. The unfavourable revenue impact from the translation of our foreign revenues is also identified in the bridge, as Carmen said—is New Zealand, a tight bar, and cream one.

Speaker #1: In that sense, I'll just move on to underlying EBITDA, at a growth of 2.1%. Just to reinforce this, that number excludes the impact from the Infinity Group debt provision.

Speaker #1: The restructuring and integration costs, as Carmen said, are associated with the 321 program, which is now complete. The M&A costs—we have had a busy M&A year.

Speaker #1: I think it was seven acquisitions, Carmen, so they obviously cost a little bit of money. So we isolate those. And there also is the foreign currency impact, and AASB 2 fair value of some share-based payments, which is an accounting adjustment and doesn't really reflect the underlying value of the equity instrument.

Brendon Pentland: I think it is, what, seven acquisitions, Carmen? So they obviously cost a little bit of money, so we isolate those. There also is the foreign currency impact and an AASB 2 fair value of some share-based payments, which is an accounting. It doesn't really reflect the underlying value of those equity instruments. So that's been identified, and it is particular to the integration period. I've mentioned the strong growth from Asia at a revenue level, but that is also coming through at the EBITDA level, and we'll talk to that a little bit further. The exit of Ramsay, the Ramsay contract which we announced would have no impact to our margin as we take cost out, so we can confirm that. So that's really characterizes our underlying results. Turning the page now to 10.

Speaker #1: So that's been identified, and it is particular to the integration period. I mentioned the strong growth from Asia at a revenue level, but that is also coming through at the EBITDA level.

Speaker #1: And we'll talk to that a little bit further. The exit of Ramsey—the Ramsey contract—we announced would have no impact to our margin as we take cost out.

Speaker #1: So we can confirm that. So that's really characterised as our underlying results. Turn the page now to 10. In our expenses—again, Carmen has touched on a couple of these things—but we did have the higher freight charges in the second half.

Brendon Pentland: In our expenses, again, Carmen's touched on a couple of these things, but we did have the higher freight charges in the H2 and would like to think that they would. Well, we're going to incur the impact of those into the H1, and there's uncertainty around what that looks like beyond that period. So offsite storage, I guess is a bit of a good and a bad story in a sense that we've got volume that we need to find space for. We don't often get a recovery of that necessarily through from our customers. So there is an extra cost that we've carried through most of FY26 with the opening of Willawong and adding some capacity there and that will start to unwind in FY27.

Speaker #1: And we'd like to think that they would. Well, we're going to incur the impact of those into the first half, and there's uncertainty around what that looks like beyond that period.

Speaker #1: So offshore storage, I guess, is a bit of a good and a bad story in the sense that we've got volume that we need to find a space for.

Speaker #1: We don't often get a recovery of that necessarily through from our customers, so there is an extra cost that we've carried through most of FY26 with the opening of Willowong and adding some capacity there.

Speaker #1: And that should—that will start to unwind in FY27. Associated with that, there were also some, I guess, extra shuttle and inter-branch transfers, which we haven't normalised, but they're in our numbers, in our underlying numbers.

Brendon Pentland: Associated with that were also some, I guess, extra shuttle and inter-branch transfers, which we haven't normalized, but they're in our numbers, in our underlying numbers. Carmen mentioned we have made strategic investments across a number of areas, sales, marketing, to foster, I guess, that long-term growth in the business. We are a growth business, and there are particular channels that we are in, particularly in medical devices and aesthetics that we do need to spend to generate new leads and new revenues. Infinity debt, the ECL that we booked in the period, just confirming that was AUD 38 million, before we took into account the GST recovery. The statutory EBITDA, again, the bridge I'll, or the reconciliation I'll take you through, but we've just listed those items that we separate out from our underlying result from our statutory.

Speaker #1: Carmen mentioned we have made strategic investments across a number of areas—sales, marketing—to foster, I guess, that long-term growth in the business.

Speaker #1: We are a growth business, and there are particular channels that we are in—particularly in medical devices and aesthetics—that we do need to spend on to generate new leads and new revenues.

Speaker #1: Infinity debt that ECO that we booked in the period, just confirming that was 38 million. Before we talk into account the GST recovery. The statutory EBITDA, again, that the bridge I'll or the reconciliation I'll take you through, but we'll just listed those items that we've we separate out from our underlying result from our statutory.

Speaker #1: Our net debt did come in in line with our target, at the top end of the range, which I— it was a heavy capex year.

Brendon Pentland: That did come in along with our target, at the top end of the range, which it was a heavy CapEx year with the investment in new businesses and also the Willawong site. Keeping that to 2.5 times I think is a good result. We did enter into some new debt facilities in New Zealand and Australia to help finance our acquisitions. Now on slide 11. Most of these items you will be familiar with and are consistent with our H1 reporting. I will not dwell on them too much. I have touched on some of them. If I just step through them from top to bottom, I will talk to our statutory EBITDA figure, but the rest of them all follow. We start off at AUD 50.8 million. We add back the impact of the Infinity debt. We have merger and acquisition related costs, which we spoke to.

Speaker #1: With the investment in new businesses and also the Willowong site, keeping that to 2.5 times, I think, is a good result. We did enter into some new debt facilities in New Zealand and Australia to help finance our acquisitions.

Speaker #1: Now, on slide 11, most of these items you'll be familiar with and are consistent with our half-year reporting. I won't dwell on them too much.

Speaker #1: I've touched on some of them, but if I just step through them from top to bottom, I'll talk to our statutory EBITDA figure, and the rest of them all follow.

Speaker #1: We start off at $50.8 million. We add back the impact of the Infinity debt. We've got merger and acquisition-related costs, which we spoke to.

Speaker #1: Restructuring and integration activity in there reflects roles that have exited in the year. The share-based payments, which I touched on. We also take out the impact of FX hedges and other currency remeasurements.

Brendon Pentland: Restructuring and integration activity in there reflects roles that have exited in the year. The share-based payments which I have touched on. We also take out the impact of FX hedges and other currency remeasurements unrealized to call that out and also the amortization on the fair value of identifiable intangible assets through the merger and acquisition business combination accounting including the discounting on deferred consideration. We backed those out because we do not consider those to be reflective of performance of our operations. I think that gives you a really good look through of how we bridge between our statutory and our underlying result. I will just now turn to slide 12 which is our balance sheet. The call-out on this slide is the net working capital number which you will see a decline in that number of 25%.

Speaker #1: Unrealised to call that out. And also the amortization on the fair value of identifiable intangible assets through the merger and acquisition business combination accounting, including the discounting on deferred consideration—we backed those out because we don't consider those to be reflective of the performance of our operations.

Speaker #1: So I think that gives you a really good look through of how we bridge between our statutory and our underlying result. I'll just now turn to Slide 12, which is our balance sheet.

Speaker #1: The call out on this slides is the net working capital number, which you'll see a decline in that number Number of 25% . There is a little bit to unpack in that .

Brendon Pentland: There is a little bit to unpack in that so we are not going to pretend that that is all cash. We do get the benefit in that number of the Infinity provision. We also included in that number is deferred consideration, the current deferred consideration on the acquired acquisitions we have made in the year. If you back those out, and then take into account the impact of acquisitions contributing to that number, it is largely flat. Again, for the year, we think that is a decent result, and Carmen spoke to some of those supply channels and some customers and suppliers needing to just build stock due to some logistical concerns has contributed to that number. You will see a large increase in our goodwill and intangibles.

Speaker #1: So we're not going to pretend that that's all cash, it isn't. We do get the benefit in that number of the inventory provision.

Speaker #1: Sorry, the infinity provision. And we also included in that number is deferred consideration, in the current deferred consideration on the acquired acquisitions we've made in the year.

Speaker #1: So if you back those out and then take into account the impact on on acquisition of acquisitions , contributing to that number , it's largely flat .

Speaker #1: But again , in a in for the year , we think that's a , a decent result . And Carmen spoke to some of those supply channels and some customers and suppliers needing to just build stock due to some logistical concerns , has contributed to that number You'll see a large increase in our goodwill and intangibles , probably worth calling out that apart from a couple of the smaller acquisitions The acquisition accounting is provisional at this stage , which will finalize most of those .

Brendon Pentland: Probably worth calling out that apart from a couple of smaller acquisitions, the acquisition accounting is provisional at this stage, which we will finalize some of those as we get to the H1. Then those that were in the H2 of FY26, we will finalize those at this time next year. So they are provisional. It is all lumped into goodwill at the moment, but we need to go through the exercise of allocating those to the identifiable intangibles that we have picked up through those acquisitions. We do note there, excluding the deferred consideration, the net working capital is AUD 116.3, compared to AUD 126 last year. But obviously AUD 116.3 includes the Infinity provision as well. Funds employed, so just on that, we did spend AUD 15.7 million of CapEx in the year on our new Brisbane site. We acquired AUD 4.9 million of fixed assets through the acquired businesses.

Speaker #1: Some of those , as we get to the half year . And then those that were in the second half of FY 26 , we'll finalize those at this time next year .

Speaker #1: So they are provisional. It's all lumped into goodwill at the moment, but we need to go through the exercise of allocating those to the identifiable intangibles that we've picked up through those acquisitions.

Speaker #1: So we do note there, excluding the deferred consideration, the net working capital is $116.3 million compared to $126 million last year. But obviously, $116.3 million includes the Infinity provision as well.

Speaker #1: Funds employed . So just on on that we did spend 15.7ml of CapEx in the year on our new Brisbane site . And we acquired 4.9 million of fixed assets through the acquired businesses Our debt facilities are largely with Scott Park , which you're familiar with , and also I mentioned that the new facilities for New Zealand and Asia , which we took on in the year and just , I guess , making clear our net debt figure there at 2.5 does include the full last 12 months of our acquired entities I'll just move on to slide 13 , which is our cash flow .

Brendon Pentland: Our debt facilities are largely with ScotPac, which you are familiar with. I also mentioned the new facilities for New Zealand and Asia, which we took on in the year. I guess, making clear our net debt figure there at 2.5 does include the full last 12 months of our acquired entities. I will just move on to slide 13, which is our cash flow. Really improved cash from operating activities at AUD 29.1 million, which was up AUD 42.5 million on last year or 317%, which is a pleasing result. I think if you characterize that with net capital expenditure, you will see the application or use of those funds. It is not all in Australia, of course. The proceeds from financing activities of the new acquisitions contributed to help to fund the acquisitions in the period.

Speaker #1: So, really improved cash from operating activities at $29.1 million, which was up $42.5 million on last year, or 317%, which is a pleasing result.

Speaker #1: I think if you characterize that with the with net capital expenditure , you'll see the application or use of those funds . It's not all in Australia , of course , but and then the proceeds from financing activities of the new acquisitions contributed to help to to fund the the acquisitions in the period we did receive our corporate tax refund of 7.3 million in the period CapEx , which I .

Brendon Pentland: We did receive a corporate tax refund of AUD 7.3 million in the period. CapEx, or investing activities, I had spoken about the investment in Willawong DC, and PPE for the period was 13.5. That was a big CapEx year for us, and we will get back to a normalized level next year or FY27. I think that is a pretty good story around the operating cash flows for the year compared to last year. I will just move on to slide 14, which are revenue bridges. Again, we have touched on these matters, but this makes it really clear around the impact of those businesses that exited, the impact on COVID drugs and GLP-1 drug growth contribution from the acquisitions. That organic growth figure is a number that we like. Having that at 6.7% after those normalizations gets a big tick from us.

Speaker #1: Or investing activities. I've spoken about the investment in Willawong DC, and PPE for the period was $13.5 million. So that was a big CapEx year for us.

Speaker #1: And we'll get back to a normalized level next year or FY 27 . So I think that's , that's that's a pretty good story around the operating cash flows for the year compared to last year .

Speaker #1: I will just move on to slide 14, which is the revenue bridges. And again, we have touched on these matters, but this makes it really clear around the impact of those businesses that exited, the impact on the covered drugs and GP, and the one drug growth contribution from the acquisitions.

Speaker #1: So that organic growth figure is a number that we like . So having that at 6.7% after those Normalizations gets a big tick from us So I think that's , that's a really good story , which allows you to just join all the dots I'll just move to over the page .

Brendon Pentland: I think that is a really good story, which allows you to just join all the dots. I will just move to over the page. Next slide. Thanks. Around the EBITDA bridge. Again, similar, just presenting same information in here around Infinity Group contribution. No Ramsay contribution. That normalized out as we were able to take costs out of the business. That normalized EBITDA growth of 7.4% after adjusting for the Infinity FY26 acquisitions, fuel, offsite storage cost, and FX is a strong number for us, which we like. Yet obviously, we will look to the contribution from the acquired businesses, and we will get the full year benefit of those as we move into FY27. I think just the other items on there which we have probably touched on as well, which were the elevated fuel cost and the offsite storage.

Speaker #1: Next slide . Thanks . Around the EBITDA bridge , again , similar just presenting same information in here and infinity group contribution . No .

Speaker #1: Ramsay contribution that normalized out as we were able to take costs out of the business . But that normalized EBITDA growth at 7.4% after adjusting for the infinity FY 26 acquisitions , fuel offsite storage costs and FX is a strong number for us , which we like And yeah , obviously , we'll look to the contribution from the acquired businesses and we'll get the full year benefit of those as we move into FY 27 .

Speaker #1: I think just the other items on there , which would probably touched on as well , which were the , the , the fuel elevated fuel costs and the off site storage .

Speaker #1: So that is all there for you to work your way through, so we'll just drill down a little bit into each of our geographic segments.

Brendon Pentland: That is all there for you to work your way through. We will just drill down a little bit into each of our geographic segments, Australia and New Zealand to start with. Which was a reported ANZ total revenue growth of 0.2%, which again seems modest, but when we take out the normalizations, that is 6.1%. We think that is a solid number. Med Tech market is a pretty solid result. There are a couple of businesses in there that face some challenges, especially in orthopedics and vision. But we have really confident around that channel and the opportunities that it does present. There are new products coming to the market, new suppliers that we are working closely with, and we are continuing to invest in the aesthetics business, which we see contributing greater in FY27 and beyond.

Speaker #1: Australia and New Zealand to start with , which was a reported ANZ total growth , revenue growth at 0.2% , which again seems modest , but when we take out the Normalizations , that 6.1% , we think that's a solid number .

Speaker #1: Med techs , medtech market . You know , it was a pretty solid result . There are a couple of businesses in there that face some challenges , especially in orthopedics and and vision .

Speaker #1: But we have really , really confident around that channel and the opportunities that it does present . There are new products coming to the market , new suppliers that we are working closely with and we are continuing to invest in the aesthetics business , which we say contributing greater in FY 27 and beyond .

Speaker #1: The New Zealand In here is impacted by the FX , which we've called out there . Contract logistics at a revenue line . Really strong growth from both our existing customer volumes , which is a testament to the execution in that business and also new customers .

Brendon Pentland: New Zealand in here is impacted by the FX, which we have called out there. Contract logistics at a revenue line, really strong growth from both our existing customer volumes, which is a testament to the execution in that business and also new customers and pipeline in that space looks pretty promising for us as we continue to expand and grow that particular channel. Clinical manufacturing was benefited from the acquisition of Fisher Biotec Pty Ltd in the second half, but that did post some really good numbers for us at both the revenue and the margin line. The margin we talk to on the next slide, on slide 18. ANZ remained steady at 8%. Wholesale grew a little, up from 6% to 6.3% as we exited some low margin business in that space.

Speaker #1: And pipeline in that in that space looks pretty promising for us as we continue to expand and grow that particular channel . Clinical manufacturing was benefited from the acquisition of Fisher in the second half , but that did post some some really good numbers for us at both the revenue and the and the margin line .

Speaker #1: The margin we talked to on the next slide on slide 18 . At ANZ , it remains steady at 8% wholesale grew a little up from 6 to 6.3% as we exited some low , low margin business in that space .

Speaker #1: MedTech was marginally lower, but that is on the back of some FX impacts and also as we invest to enter into those new markets and products that we spoke to. In contract logistics, the pleasing result on the revenue line is it actually grew at the margin as well.

Brendon Pentland: Med Tech was marginally lower, but that is on the back of some FX impacts and also as we invest to enter in those new markets and products that we spoke to. Contract logistics, the pleasing result in the revenue line is it actually grew up the margin as well. So profitable revenue growth is what we love to see. Clinical manufacturing margin was up as well as we just established what the right operating cost base was for that particular channel. The Asia segment is a really good story. It continues a good story from prior periods as well. It continues to be a growing contributor to the group at a good margin. Organic growth and acquisitive growth is strong. I will not dwell on them. I think it is pretty evident from the numbers themselves. That is despite the FX impact on that particular business.

Speaker #1: So, profitable revenue growth is what we love to see. And clinical manufacturing margin was up as well, as we just established what the right operating cost base was for that particular channel. The Asia segment is a really good story and continues.

Speaker #1: A good story from prior periods as well , contributing continues to be a a growing contributor to the to the group at good margin .

Speaker #1: Our organic growth and acquisitive growth are strong. I won't dwell on them; I think it's pretty evident from the numbers themselves.

Speaker #1: And that is despite the FX impact on that particular business . So on a like for like basis , those numbers are a lot stronger .

Brendon Pentland: On a like-to-like basis, those numbers are a lot stronger. Thailand Aesthetics, which a lot of people are interested in, continues to perform strongly. There is a little bit of margin decline in here as we enter into the new markets, introduce new products. But it is also reflective of the investment also in those marketing activities and the investment in our people, and the shared services costs, which are also now in this particular segment. I think that is, again, really good story. I think that the expansion of our multidisciplinary shared services team, to complement our regional focus makes sense to us. There are still some opportunities to put more roles over there in that region. That finishes my part.

Speaker #1: So Thailand , which a lot of people are interested in , continues to perform strongly . There is a little bit of margin decline in here as we enter into the new markets , introduce new new products , but it's also reflective of the investment .

Speaker #1: Also in in those marketing activities and investment in , in our people and the shared services costs , which are also now in , in this particular segment .

Speaker #1: So I think that's , again , really , really good story . I think that the expansion of our multidisciplinary shared services team to complement our regional focus , you know , makes sense to us and there are still some opportunities to put more roles over there in that , in that region .

Speaker #1: So that finishes my part

Speaker #2: Great . Okay . Thanks very much , Brendan . If we just click over to our acquisitions . So they're all performing well .

Carmen Riley: Okay. Thanks very much, Brendon Pentland. If we just click over to our acquisitions. They are all performing well. I will not go into the detail of those at the moment. I will use that for Q&A. But if you look at the presentation on the left-hand side, there are the businesses that we acquired in Australia, which is around, you can see two of them, particularly around the dental, helping us expand into that portfolio and allowing certain supplier access into that space. So, we are really pleased to finally launch our dental division last year. So that has been great. On the right-hand side, our Asian acquisitions. Haju Medical, a very similar business to our Thailand business, and does exceptionally well based in Indonesia. So we are pleased to bolt that on. Obviously Pacific Medical (Hong Kong) Company Limited and Soma Tech Pte. Ltd. is based in Singapore, but again, spreads our reach across Singapore and Malaysia as well.

Speaker #2: I won't go into the detail of those at the moment . I'll use that for Q but if you look at the presentation on the left hand side there , the businesses that we acquired in Australia , which is around , you can see two of them , particularly around the dental helping us expand into that portfolio and allowing certain supplier access into that space .

Speaker #2: So we're really pleased to finally launch our dental division last year . So so that's been great . On the right hand side are our Asian acquisitions .

Speaker #2: Haju is a very similar business to our Thailand business, and does exceptionally well based in Indonesia, so we're pleased to bolt that on.

Speaker #2: And obviously, Pacific Medical's in Hong Kong and Somna Tech is based in Singapore, but again, this spreads our reach across Singapore and Malaysia as well.

Speaker #2: So early days , but we're really thrilled with with all the acquisitions that we've got on board . And they're working collaborative with the rest of our team to not only actually bring some of the existing Paragon business into their business , but also help us with their expertise in , in getting out there portfolio into other regions .

Carmen Riley: Early days, but we are really thrilled with all the acquisitions that we have got on board, and they are working collaborative with the rest of our team to, not only actually bring some of the existing Paragon business into their business, but also help us with their expertise in getting their portfolio into other regions. Just turning on to page 24. I will not go through all of that, but our strategy is not changing. We are continuing on the same path. We want to be making healthcare simpler across the region, and we do want to be, across all of APAC, the only country we are not in at the moment that we would like to be, would be Taiwan, but we will wait and see when the right opportunity presents itself. Okay. Last but not least, for our FY27 outlook on page 25. Turn over that.

Speaker #2: So just turning on to page 24, I won't go through all of that, but with our strategies not changing, we're continuing on the same path.

Speaker #2: We want to be making healthcare simpler across the region , and we do want to be across all of APAC . The only country we're not in at the moment that we'd like to be would be be Taiwan , but we'll wait and see when the right opportunity presents itself .

Speaker #2: Okay , so last but not least , for our FY 27 outlook on page 25 . Turnover . So I won't touch on every point , but I did want to highlight that we're now fully focused on driving the business forward .

Carmen Riley: I will not touch on every point, but I did want to highlight that we are now fully focused on driving the business forward. As I said at the beginning of the presentation, we have had a black mark against us on the Infinity. I understand that. We are not shying away from it, but I know that the underlying business has some bench strengths that we are pushing through, and we are focused on our forward trajectory now, not looking in the revision mirror. We are going to leverage our market presence. We are now across 11 countries. Our team is aligned. We are all working very closely together, all of our country managers, all of our channel managers, and we are seeking the opportunities to really expand in each market and each channel.

Speaker #2: As I said at the beginning of the presentation , we have had a black mark against us on , on the infinity . I understand that we're not shying away from it , but I know that the underlying business has some strengths that we're we're pushing through and we're focused on , on our forward trajectory now , not looking in the rear vision mirror .

Speaker #2: So we're to leverage our market presence . We're now across 11 countries . Our team is aligned . We're all working very closely to together all of our country managers , all of our channel managers .

Speaker #2: And we're seeking the opportunities to really expand in in each , each market and each channel . So yes , we are going to continue to do the right M&A opportunities , but we will focus this year just on consolidating our most recent acquisitions and making sure that we're getting those down as well .

Carmen Riley: Yes, we are going to continue to do the right M&A opportunities, but we will focus this year just on consolidating our most recent acquisitions and making sure that we are bedding those down as well. But we will always continue to look for, and take advantage of M&A as it presents itself. FY27 organic growth is our key focus. We will settle down on our capital spend, and we will focus on the business that we have at hand. We have got the range, we have got the footprint, and we have certainly got the team. So, I am very excited about FY27. And to turn that page. We will continue to drive performance excellence now that we have closed out our 3-2-1 strategy, which was an incredible amount of work. You can see the detail that Brendon went through, and I touched on earlier, that the team have done a lot to bring this business together.

Speaker #2: But we will always continue to look for and take advantage of M&A as a as it presents itself . FY 27 organic growth is our key focus .

Speaker #2: We'll settle down on our capital spend, and we will focus on the business that we have at hand. We've got the range.

Speaker #2: We've got the footprint , and we've certainly got the team . So I'm very excited about FY 27 . And to turn that page , we'll continue to drive performance excellence .

Speaker #2: Now that we've closed out our three , two , one strategy , which was an incredible amount of work , you can see the detail that Brendan went through and I touched on earlier , the team have done a lot to bring this business together , but now we can really also drive that next level of efficiency throughout the business So just on our capital management , so we do believe that we need to reduce the number of shares on issue .

Carmen Riley: But now we can really also drive that next level of efficiency throughout the business. Just on our capital management. We do believe that we need to reduce the number of shares on issue and also that the share price is undervalued. To these points, we are going to commence a share buyback in FY27. We think that we need to reduce the number of shares to a level considered more appropriate, basically with Paragon Care’s market size and our market position. As you know, there are some LTIs that are vesting in FY27 or at the end of FY27. Part of that initial buyback will be held in trust for the issue of those performance rights. Regardless of issuing more shares, we would prefer not to do that and to do a buyback just to consolidate that register.

Speaker #2: And also that the share price is undervalued. So, to these points, we are going to commence a share buyback in FY27.

Speaker #2: We think that we need to reduce the number of shares to a level considered more appropriate . Basically with Paragon Care market size and our market position , as you know , there are some Ltis that are vesting in FY 27 or at the end of FY 27 .

Speaker #2: So part of that initial buyback will be held in trust for the issue of those performance rights. Regardless of issuing more shares, we'd prefer not to do that.

Speaker #2: And and to do a buyback just to consolidate that register at today's value , we certainly believe it's not only more appropriate for the share register , but an economic benefit for for Paragon Care as well .

Carmen Riley: At today's value, we certainly believe it's not only more appropriate for the share register, but an economic benefit for Paragon Care as well. We won't be on the dip end. Unfortunately, we won't be declaring a dividend for FY26, but we will review this in the H1 based on trading performance. I do understand, and particularly for our retail investors, understand the question on why a buyback and not a dividend. As I've said, we do see the share price is undervalued, and we do need to step through all of this in a pragmatic process. Number one was to transition and realign the underlying business, which I believe that we've done, and I think the team has done a good job. Two, we wanted to ensure that we have the appropriate level of shares on issue and to fix our register.

Speaker #2: So we won't be on the on the dividend . So unfortunately , we won't be declaring a dividend for FY 26 . But we will review this in the first half based on trading performance I do understand and particularly for our retail investors understand the question on why buyback and not a dividend .

Speaker #2: As I've said, we do see the share price as undervalued, and we do need to step through all of this in a pragmatic process.

Speaker #2: So, number one was to transition and realign the underlying business, which I believe that we've done, and I think the team have done a good job. Two, we wanted to ensure that we have the appropriate level of shares on issue and to fix our register.

Speaker #2: And three , we wanted to make sure that we've got the right business structure and platform in place . And as we do that and we have done that , we'll assess the dividend stream based on trading performance in FY 27 .

Carmen Riley: Three, we wanted to make sure that we've got the right business structure and platform in place. As we do that, and we have done that, we'll assess the dividend stream based on trading performance in FY27. Just stepping through, because once we start a dividend program, we certainly don't want to switch it off. Thanks for that. Mel, if you don't mind, I'll hand back over to you for any questions that the listeners might have.

Speaker #2: So just stepping through, because once we start a dividend program, we certainly don't want to switch it off. So, thanks for that, Mel.

Speaker #2: If you don't mind, I'll hand back over to you for any questions that the listeners might have.

Speaker #3: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced.

Operator: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Tom Godfrey with Ord Minnett. Please go ahead.

Speaker #3: If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question.

Speaker #3: Your first question comes from Tom Godfrey with Ord Minnett. Please go ahead.

Speaker #4: Oh good morning , Carmen and Brendan . Thanks for taking my questions . Can you hear me ? Okay ?

Tom Godfrey: Good morning, Carmen and Brendon. Thanks for taking my questions. Can you hear me okay?

Speaker #2: Yep . Hear you . Good . Thanks , Tom .

Carmen Riley: Yep, hear you good. Thanks, Tom.

Speaker #4: Great . Thanks very much . Just sort of picking up on the comment around expecting ongoing revenue and earnings growth into next year and maybe just looking at some of the features of the EBITDA bridge on slide 15 .

Tom Godfrey: Great. Thanks very much. Just sort of picking up on the comment around expecting ongoing revenue and earnings growth into next year and maybe just looking at some of the features of the EBITDA bridge on slide 15.

Speaker #4: Yep. Obviously, a significant volume of acquisitions executed this year. Just sort of wondering how that acquisition delta sort of analyses into '27.

Carmen Riley: Yeah.

Tom Godfrey: Obviously, a significant volume of acquisitions executed this year. Just sort of wondering how that acquisition delta sort of annualizes into 2027. What can we expect the contribution to be?

Speaker #4: What can we expect the contribution to be?

Speaker #1: Tom . So some of the tech was we acquired on a mid January . I'm sorry , mid December . So we had .

Brendon Pentland: Tom, so some of the tech we acquired on mid-January.

Brendon Pentland: Sorry, mid-December. We will get a further, I guess, five and a half months from some of the tech. We have disclosed in the, I guess, our 4E, what the contribution or the revenues were from each of those. Haju, we have only got three months of that in FY26, so we will get a further nine months. Pacific Medical, I think we had five months on medical, so we will get a further seven months of that. Look, that number will be higher as we go into FY27, just given the timing of those, where most of them were in the second half of FY26.

Speaker #1: So we'll get , you know , a further I guess five and a half months from some solnatec . So we've disclosed in the , I guess our foray , you know , what the contribution or the revenues were from , from each of those has you we've only got three months of that in , in FY 26 .

Speaker #1: So we'll get a further nine months. And Pacific Medical was a— I think we had five months on Medical, so we had a further seven months of that.

Speaker #1: So look , that that that number will be higher as we go into FY 27 . Just given the timing and of those where most of them were in the in the second half of FY 26 .

Speaker #4: That's helpful . Thanks , Brendan . And then just in terms of the sort of one of the bigger negative wedges in that bridge was just fuelling off site storage .

Tom Godfrey: That is helpful. Thanks, Brendon. Just in terms of the one of the bigger negative wedges in that bridge was just fuel and offsite storage. How does that dissipate into next year or unwind? How should we be thinking about those costs on an ongoing basis?

Speaker #4: How does that sort of dissipate into next year or unwind? How should we be thinking about those costs on an ongoing basis?

Speaker #2: Yeah , it's it's a good question , Tom . It's a difficult question . So offsite storage , we're comfortable around because a lot of that was in the first half of the year .

Carmen Riley: Well, it is a good question, Tom. It is a difficult question. Offsite storage, we are comfortable around because a lot of that was in the first half of the year and we have backed that out. That was particularly caused by our delay to our Brisbane site. So that was difficult. The fuel has certainly got us all by surprise and we are trying to negate some of that, but it just depends on the fuel prices as they work through. What I do not want to do, I think like all of us, we are hoping that that war will end at any time soon, but what I do not want to do is disrupt our customers and suppliers. Because hopefully it is more short-term than long-term.

Speaker #2: And we've back that out . And that was particularly caused by our delay to our Brisbane site . So that was difficult . The fuel has certainly got us all by surprise , and we're trying to negate some of that .

Speaker #2: But it just depends on the fuel prices as they as they work through . What I don't want to do . I think , like all of us , we're hoping that that war will end any time soon .

Speaker #2: But what I don't want to do is disrupt our customers and suppliers, because hopefully it's more short term than long term. So it's a difficult one to put a number on at the moment.

Carmen Riley: It is a difficult one to put a number on at the moment, and that is why we are a bit cautious of giving an outlook because we are not sure around how fuel is going to go. In saying that, I would like to obviously give a full update by the time we get round to the AGM as well based on the Q1 results.

Speaker #2: And that's why we're a bit cautious of giving an outlook , because we're not sure around how fuel is going to go in saying that , I'd like to obviously give a full update , by the time we get round to the AGM as well , based on the Q1 result .

Speaker #4: Understood . That's helpful . Thanks , Carmen . And then maybe just one on your balance sheet . I mean , you gave us some net debt to EBITDA guidance in the prior period .

Tom Godfrey: Understood. That is helpful. Thanks, Carmen. Then maybe just one on your balance sheet. I mean, you gave us some net debt to EBITDA guidance in the prior period. Is the goal to get that towards the bottom end of the range? I noticed you spoke to quite a few cash flow initiatives for this year.

Speaker #4: Is the goal to get that towards the bottom end of the range? I noticed you spoke to quite a few cash flow initiatives for this year.

Carmen Riley: No.

Speaker #4: Where do you see the balance sheet settling in FY27?

Tom Godfrey: Where do you see the balance sheet settling in FY27?

Speaker #2: At the moment ? If we continue around the two and a half times , I'm pretty comfortable around that . I don't want to sit there and give us a target to , to wind that down to two in particularly the market that we're operating in at the moment .

Carmen Riley: At the moment, if we continue around the 2.5 times, I am pretty comfortable around that. I do not want to sit there and give us a target to wind that down to 2, particularly the market that we are operating in at the moment. We do want to continue to invest in the right areas. So at the moment, I am pretty comfortable where that is sitting.

Speaker #2: And we do want to continue to invest in the right areas. So, at the moment, I'm pretty comfortable with where that's sitting.

Speaker #4: Got it . Then just last one from me , just around the first pharmacy wholesaler agreement . And how that's rolling through . I realize it's sort of only a couple of months in , but do you guys have an estimate at this point in terms of how much of this CSL uplift in terms of your market share ?

Tom Godfrey: Got it. Then just last one from me, just around the first pharmacy wholesaler agreement and how that is rolling through. I realize it is only a couple of months in, but do you guys have an estimate at this point in terms of how much of this CSO uplift in terms of your market share you will see this year and just any other changes in line with expectations?

Speaker #4: You'll see this year? And just any other sort of the other changes, in line with expectations?

Speaker #2: Yeah , sure . I do . I don't want to be too cagey about that either . Tom , because I don't want to give away a number when we're in , you know , we're basically only got one month's trading data around it in the modelling is in line with our expectations .

Carmen Riley: Yeah, sure. I do. I do not want to be too cagey about that either, Tom Godfrey, because I do not want to give away a number when we are in. We have basically only got one month's trading data around it, and the modeling is in line with our expectations when we had the first CSO payment come through. So that was a relief. But look, we will just wait how that extrapolates out over the year anyway. But I do not want to give a number to it at this point.

Speaker #2: When we had the first CSO payment come through, that was a relief. But we'll just wait to see how that extrapolates out over the year, anyway.

Speaker #2: But I don't want to give a number to it at this point.

Speaker #4: Got it. It's worth a shot. Thanks, Carmen.

Tom Godfrey: Got it. It is worth a shot. Thanks, Carmen Riley.

Speaker #2: That's okay. That's okay.

Carmen Riley: Yeah, that is okay.

Speaker #5: Thank you. Your next question comes from John Hester with Bell Potter. Please go ahead.

Operator: Thank you. Your next question comes from John Hester with Bell Potter. Please go ahead.

Speaker #6: Hi. Good morning, everyone. Carmen, perhaps if you could talk a little bit more in detail about the clinical manufacturing business. You mentioned the Japan contract.

John Hester: Good morning, everyone. Carmen, perhaps if you could talk in a little bit more detail about the clinical manufacturing business.

Speaker #6: What's that worth? And tell us, tell us more about it.

Carmen Riley: Yes.

John Hester: You mentioned a Japan contract. What's that worth and tell us more about it.

Speaker #2: Yeah, sure. So, I can't give you the value of the contract because they're commercial in confidence. But the majority of that is actually around a contract that we have with Quidel Ortho.

Carmen Riley: Well, sure. I can't give you the value of the contract because they're commercial in confidence, but the majority, well, that is actually around a contract that we have with QuidelOrtho.

Speaker #6: So they are they .

John Hester: Sorry, who are they?

Speaker #2: Quidel also—so they're closing some of their facilities, and they're obviously looking to put their footprint into Australia with the opportunity to expand out to the APAC region.

Carmen Riley: QuidelOrtho. They are closing some of their facilities, and they are looking obviously to put their footprint into Australia with the opportunity to expand out to the APAC region. Look, it is early days. It is a lot of work to get those contracts up and running because of the TGA and everything that you need to go through. You can imagine, we have a team of scientists that actually work through that process, so it is very complex. We are working very well with that contract. Really pleased with it. It will step up. It is a year-on-year step-up as they roll certain products and portfolios out, and they will obviously expand into different geographical regions as well.

Speaker #2: So, look, it's early days. It's a lot of work to get those contracts up and running because of the TGA and everything that you need to go through.

Speaker #2: And you can imagine we've got a team of scientists that actually work through that process. So it is very complex, but we're working very well with that contract.

Speaker #2: Really pleased with it . It'll step up . It's a year on year step up as they roll certain products and portfolios out , and they'll obviously expand into different geographical regions as well .

Speaker #6: So, is it for a single product, or is it...

John Hester: Is it for a single product or is it multiple products?

Speaker #2: No, it's multiple products.

Carmen Riley: No, it is multiple products.

Speaker #6: And is it a multi-year contract, or...

John Hester: Is it a multi-year contract or?

Speaker #2: Correct .

Carmen Riley: Correct.

Speaker #6: Okay. Yeah. Could you estimate what the total contract value might be worth over a few years?

John Hester: Okay.

Carmen Riley: Yeah.

John Hester: Could you estimate what the total contract value might be worth over a few years?

Speaker #2: I couldn't, I couldn't, John, because I'd probably get in a bit of trouble if I said that one.

Carmen Riley: I couldn't. I couldn't, John, because I'd probably get in a bit of trouble if I said that one.

Speaker #6: I'm sure you could, but...

John Hester: I'm sure you could, but-

Carmen Riley: Yeah. I do know it.

Speaker #2: I do know it

Speaker #6: And just what else ? The highlights there , I mean , contract logistics was really good . Good margin , good growth there .

John Hester: And, just what else are the highlights there? I mean, contract logistics was really good.

Carmen Riley: Yeah.

John Hester: Good margin, good growth there.

Carmen Riley: Yeah.

Speaker #6: So looking at the margin there on that business , you talked about fuel costs and so on . That would be impacted . One would gather by the by by that those events

John Hester: So looking at the margin there on that business, you talked about fuel costs and so on, that would be impacted one would gather by those events?

Speaker #2: Which one are you looking at for?

Carmen Riley: Which one are you looking at for the-

Speaker #6: Contract logistics? I'm just looking at the looking.

John Hester: Contract logistics. I am just looking at the-

Carmen Riley: It is not impacted in their gross margin. That is an expense on there. So it is not on their gross margin side of things. Well, a little bit of a double-edged sword at the moment. I am absolutely thrilled how we are doing with contract logistics and we have got a lot in the pipeline on that space. I do think that is a subscale business for us. So, absolutely pleased on where it is going. Problematic at the moment when fuel prices are going up because it is logistics, but I do believe that to be a bit more short-term and the cost pressure will come off. We will have some benefits in fuel.

Speaker #2: At slides not impacted in their gross margin . That's an expense on there . So it's not on their gross margin side of things , but you're a little bit of a double edged sword at the moment .

Speaker #2: I'm absolutely thrilled with how we're doing with contract logistics, and we've got a lot in the pipeline in that space. I do think that is a subscale business for us.

Speaker #2: So, absolutely pleased with where it's going. It's problematic at the moment when fuel prices are going up, because it is logistics, but I do believe that to be a bit more short term and that the cost pressure will come off. We'll have some benefits in fuel.

Speaker #2: I know . Tom asked , as he mentioned the question before , we'll have some benefits before in the future with fuel because we won't be running so many ibt's that we did with the reshuffling of Brisbane , and that had a bit of an impact .

Carmen Riley: I know Tom asked, as he mentioned the question before, we will have some benefits in the future with fuel because we will not be running so many IBTs that we did with the reshuffling of Willawong, and that had a bit of an impact. Well, a lot more impact actually around contract logistics than any other division. So the growth side will continue to grow there, but we will have that short-term fuel pressure, although not as much as what we had in FY26.

Speaker #2: Well , a lot more impact actually around contract logistics than any other division . So yeah , the growth side will continue to grow there , but we will have that short term fuel pressure , although not as much as what we had in FY 26 .

Speaker #6: Okay . And just one additional question on acquisitions . Obviously got very active this year . Six acquisitions . Yeah . Balance sheet is reasonably geared there .

John Hester: Okay. Just one additional question on acquisitions. Obviously, you have been very active this year, six-

Carmen Riley: Yeah

John Hester: acquisitions.

Carmen Riley: Yeah.

John Hester: Your balance sheet is reasonably geared there now. You said you are comfortable with two-

Speaker #6: Now, you said you're comfortable with two and a half times debt. So how does that leave you positioned now to fund acquisitions?

Carmen Riley: Yeah

John Hester: and a half times debt.

Carmen Riley: Yeah

John Hester: How does that leave you positioned now to fund acquisitions? Because I gather you have more in there. You are going to issue more paper or are you just going to ramp up the debt, do you think?

Speaker #6: Because I gather you've got more in there. You're going to issue more paper, or are you just going to ramp up the debt?

Speaker #6: Do you think

Speaker #2: If the right acquisition came along , would that that the right debt doesn't bother us because we see that adding longer term value for the shareholders anyway , rather than raising equity , because that's just not something that we're we're interested in doing .

Carmen Riley: If the right acquisition came along, the right debt does not bother us, because we see that adding longer term value for the shareholders anyway rather than raising equity, because that is just not something that we are interested in doing.

John Hester: Yeah.

Speaker #2: Look, I'd be shocked if we're sitting here this time next year. And I'll tell you, we've done six acquisitions anyway.

Carmen Riley: Look, I would be shocked if we are sitting here this time next year and I tell you we have done six acquisitions anyway. I would like to have that settle down a little bit, but it would be around the right acquisition. It is a hard question to answer without something short-term in sight. We would use that facility if we had another acquisition that we wanted to go after.

Speaker #2: So, I'd like to have that settle down a little bit, but it would be around the right acquisition. So it's a hard, hard question to answer without something short term in sight.

Speaker #2: But yeah , we would use we use use that facility . If we if we had another acquisition that we wanted to go after .

Speaker #6: Yeah. And just perhaps one final question for Brendan, if I may, and this is sort of what Tom was asking.

John Hester: Yeah. Just perhaps one final question from Brendan, if I may. This is what Tom was asking as well. What do you believe is the full year impact of the six acquisitions you completed for a full 12 months EBITDA?

Speaker #6: So what is the do you believe is the full year impact of the six acquisitions you completed for a full 12 months I .

Speaker #1: Oh , EBITDA .

Brendon Pentland: Oh, in EBITDA?

Speaker #6: Yeah .

John Hester: Yeah. I am-

Speaker #1: No .

Speaker #2: Yeah , yeah .

Carmen Riley: Yeah.

Speaker #1: I'm not I'm not .

Brendon Pentland: I'm not going to do

Speaker #2: Being a bit cautious on yeah . Look at the moment , John , just as they settle down . So early early days when you read the the for E they're delivering on their results .

Carmen Riley: We're being a bit cautious on

Brendon Pentland: Yeah

Carmen Riley: our look at the moment, John, just as they settle down. Early days when you read the Appendix 4E, they're delivering on their results. But we just need to make sure that we're getting through that first quarter. And once we're through first quarter, we'll be a bit clearer on making sure that we're giving the right number out to the market as well.

Speaker #2: But we just need to make sure that we're getting through that first quarter. And once we're through the first quarter, we'll be a bit clearer on making sure that we're giving the right number out to the market as well.

Speaker #6: Okay . Thank you .

John Hester: Okay. That's it. Thank you.

Speaker #2: Yeah . That's okay .

Carmen Riley: Yeah, that is okay.

Speaker #3: Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced.

Operator: Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from James Tracey with Blue Ocean Equities. Please go ahead.

Speaker #3: Your next question comes from James Tracey with Blue Ocean Equities. Please go ahead.

Speaker #4: Carmen: Hi, Brendan.

James Tracey: Carmen. Hi, Brendon.

Speaker #1: Hi , James

Carmen Riley: Hi.

Brendon Pentland: Go, James.

Speaker #7: Yeah. First question I've got is just around the pro forma EBITDA. If I take the net debt and divide it by two and a half times, it implies that pro forma EBITDA was $113 million in the year just finished, which is considerably higher than—

James Tracey: Yeah. The first question I have is just around the pro forma EBITDA. If I take the net debt and divide it by 2.5 times, it implies that pro forma EBITDA was AUD 113 million in the year just finished, which is considerably higher than

Speaker #1: Yeah , I .

Brendon Pentland: Yeah. I think

James Tracey: our expectations for 2027.

Speaker #7: for 27 .

Speaker #1: Yeah , I think James , I mentioned this when we calculated we include the full 12 last 12 months of the acquired businesses in that calculation .

Brendon Pentland: Yeah. I think, James, I mentioned this, when we calculate it, we include the full last 12 months of the acquired businesses in that calculation.

Speaker #4: Yeah . So I guess I guess the point , the point being is that .

James Tracey: Yeah.

Brendon Pentland: That is-

James Tracey: But I guess the point being is that you have 12 months in FY27. So I guess it is a question around, you have given guidance for earnings growth, revenue growth in 2027. The base level is considerably higher than the number reported. I guess, is there anything big that you would call out to take out of that pro forma number to help give us a sense of what we could see in 2027?

Speaker #7: You have 12 months in FY 27 . So I guess it's a question around . Yeah , you've given guidance for earnings growth , revenue growth in 27 .

Speaker #7: The base level . You know , is considerably higher than the number reported . I guess . Is there anything , you know , big that you would call out to take out of that pro forma number to , to help give us a , you know , a sense of what we could see in 27 .

Brendon Pentland: No, I guess the way we present that on an underlying basis, because we want to give you a look-through of what has impacted FY26 that, of a significant or a nature or that we just want to make sure that you have got a clear line of sight of what our underlying business is doing. But I am not quite sure I follow that you said we are giving guidance for 2027 because we gave obviously guidance for 2026. And we clearly stated when we gave that, around that 2 to 2.5 on the gearing that does include the full year contribution or last 12 months of acquired businesses. So looking at-

Speaker #1: No , I mean , I guess the way , you know , we present that underlying basis because we want to give you a look through of what has impacted FY 26 that , you know , of a significant or Nature or that we just want to make sure that you've got a clear line of sight of what our underlying business is doing , but I'm not quite sure I follow that .

Speaker #1: You said we're giving guidance for '27 because we gave, obviously, guidance for '26. And we clearly stated when we gave that, that when we...

Speaker #1: Around the . 2.52 to 2.5 on the gearing that that that does include the full year contribution or last 12 months of the acquired businesses .

Speaker #1: So So , look .

Speaker #4: I guess , I guess , yeah , yeah , the , point , the point I'm making is that , you know , the pro forma numbers of 26 is possibly a better guide to 27 than the reported number , because you're going to have the full year contribution of those acquisitions it .

James Tracey: Yeah. I guess, the point I am making is that, the pro forma numbers for 2026 is possibly a better guide to 2027 than the reported number because you are going to have the full year contribution of those acquisitions in it.

Speaker #4: Yeah , yeah . Yeah yeah yeah . Is there anything that , you know , is there a I know in that , you know , the slide that everyone's been referring to the the EBITDA bridge , that there's something like 3 million , you know , of the infinity group sort of coming out , which presumably won't recur , but then on the other hand , you've got a whole bunch of other things , like the CSO funding , which is a positive .

Brendon Pentland: Yeah.

Carmen Riley: Yeah.

James Tracey: So is there anything that, I know it in the slide that everyone's been referring to, the EBITDA bridge, that there's something like AUD 3 million of the Infinity Group sort of coming out, which presumably won't recur.

James Tracey: But then on the other hand, you've got a whole bunch of other things like the CSO funding, which is a positive.

Speaker #4: The defense contract , which is positive . Yeah . Organic growth . Yeah . And so on . So I'm just wondering , you know , with respect to setting my forecast for 27 , I'm not asking for guidance , but , you know , is there , you know , a big number , for instance , the Ramsay in that pro forma number , which is 113 million that , you know , that doesn't occur or , should some of these other factors .

James Tracey: The Australian Defence Force contract, which is a positive.

Carmen Riley: Yeah.

James Tracey: Organic growth.

Carmen Riley: Yeah.

James Tracey: So on. I am just wondering, with respect to setting my forecast for 2027, I am not asking for guidance. Is there a big number, for instance, for Ramsay Health Care in that pro forma number, which is AUD 113 million, that does not occur or should some of these other factors?

Speaker #2: No , no , no , no , that's not .

Carmen Riley: No.

James Tracey: No.

Carmen Riley: No, there is not.

Speaker #4: Okay .

James Tracey: Okay.

Speaker #2: Yeah .

Carmen Riley: Yeah.

Speaker #4: Okay . That's good . And the second question is just around the buyback . Could you just give a bit of color ? I haven't seen any detail on the number of shares that you'd be authorized to buy back .

James Tracey: Okay, that is good. The second question is just around the buyback. Could you just give a bit of color? I have not seen any detail on the number of shares that you would be authorized to buy back. Could you just talk to your intention of actually fulfilling it? Because a lot of companies will authorize a buyback and then not actually execute or buy a meaningful number of shares back.

Speaker #4: And could you just talk to your intention of actually sort of fulfilling it ? Because a lot of companies will authorize a buyback and then not actually , you know , do a meaningful , you know , not actually execute or apply a meaningful number of shares back .

Speaker #2: That is the case . And , and that is the case . James . So it's a good question . So as I said , there is a step through approach .

Carmen Riley: That is the case, James. It is a good question. As I said, there is a step-through approach. There is some in the employee incentive plan that we think based on the price now anyway, it is better to buy them in the trust rather than to issue those shares. We will be doing that. Then in a general buyback and under the general rules, we can buy up to 10%. That is not saying we are going to do all of that. We just want the flexibility as the year rolls out and based on our trading, based where we get on H1 and on our dividend policy as well, on where we sit with buying those shares over the course of the 12 months.

Speaker #2: This some in the employee incentive plan that we think based on the price now anyway , it's better to to buy them rather than to buy them in the trust rather than to issue those shares .

Speaker #2: So we'll be doing that . And then we can , in a general buyback . And under the general rules , we can buy up to 10% .

Speaker #2: That is not saying we're going to do all of that, but we just want the flexibility as the year rolls out. And, based on our trading, based on where we get at half year and on our dividend policy as well, on where we sit with buying those shares over the course of the 12 months.

Speaker #4: Yeah . Okay . That's very clear . And just final question for me around cash conversion , you know , there was a a big improvement , you know , from the negative operating cash flow in the first half to to 30 million positive in in the full year Obviously , the operating cash flow is still well below the EBITDA .

James Tracey: Yeah. Okay. That is perfectly clear. Just a final question from me around cash conversion. There was a big improvement from the negative operating cash flow in the H1 to close to AUD 30 million positive in the full year. Obviously, the operating cash flow is still well below the EBITDA. Do you expect to see the operating cash flow to be a high percentage of EBITDA over time when you do not have as many issues around-

Speaker #4: I mean , do you expect to see the operating cash flow to be a higher percentage of EBITDA over time . And you don't have , you know , as many issues around that ?

Carmen Riley: Oh, without a doubt. Yeah. Without a doubt.

Speaker #2: Yeah, yeah. Without a doubt.

Speaker #1: Yeah . And look , being , you know , being transparent as we all are , James . I mean , that 29.1 for the , for the full year , also included in the second half , the corporate tax refund .

Brendon Pentland: Yeah. Look, being transparent as we are, James, that AUD 29.1 for the full year, also included in the H2 the corporate tax-

Carmen Riley: Yeah

Brendon Pentland: refund. So there is a benefit in there. Look, we are working hard around working capital management to always improve the cash flow. So we will obviously be looking at ways we can do that.

Speaker #1: So , you know , there is a benefit in there . So look , we're we're working hard around , you know , working capital management to always improve the cash flow .

Speaker #1: So, we'll, we'll, you know, obviously be looking at ways we can do that.

James Tracey: Got it. Thank you, Carmen and Brendon.

Speaker #4: Thank you. Come in. And Brendan.

Speaker #2: Thanks , James .

Carmen Riley: Thanks, James.

Speaker #3: Thank you. There are no further questions at this time. I'll now hand back to Miss Riley for closing remarks.

Operator: Thank you. There are no further questions at this time. I will now hand back to Ms. Riley for closing remarks.

Speaker #2: Okay . Great . Thanks very much , Mel . Hopefully we've given everyone some color around the business . We've closed out some some major issues that we've had , but giving you the confidence that we're fully focused and , and ready for FY 27 .

Carmen Riley: Okay, great. Thanks very much, Mel. Hopefully, we have given everyone some color around the business. We have closed out some major issues that we have had, giving you the confidence that we are fully focused and ready for FY27 and the years to come. I look forward to catching up with hopefully most of you as we do the roadshow. But if you have got any questions, feel free to give myself or Brendon a call anyway. Hopefully, we will see you all face-to-face soon. Thanks very much.

Speaker #2: And in the years to come. So I'll look forward to catching up with, hopefully, most of you as we do the roadshow.

Speaker #2: But if you've got any questions, feel free to give myself or Brendan a call anyway. And hopefully we'll see you all face to face soon.

Speaker #2: So thanks very much .

Speaker #1: Thanks

Brendon Pentland: Thanks.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.