AFT Pharmaceuticals Limited (AFT) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the AFT Pharmaceuticals Annual Results Analyst Briefing. [Operator Instructions] I would now like to hand the conference over to Malcolm Tubby, CFO. Please go ahead.

Thanks, Rachel, and good morning, everybody. Thank you for joining us. Just making sure everybody has the presentation in front of them. If you go to the NZX website, to the AFT instrument, go to announcements, and at the follow of the announcement, you'll see the 4 downloads. And if you need it, the second one down is the results presentation. So I'll hand over to Hartley now. We'll just do a slow intro, just to make sure you guys have got that in front of you. Thank you.

Thank you, Malcolm. My name is Hartley Atkinson, I'm the founder and CEO of AFT Pharmaceuticals. Here today to present FY '20 full year financial results. So as Malcolm has pointed out, the slide presentation deck is on the NZX. So hopefully, you've been able to pick that up okay. It's on the bottom of the result announcement. Now just to flick through that. There is a cover page, which says what I've just said basically. There is -- the next, Page 2 is the important notice with all the legal disclaimers. So we'll assume you'll have read that. Thank you. And then on Page 3, we start to get into the results, which obviously is what we're here today to talk about. The first, Slide #3, is really just an overview maybe for those of you who haven't been following us closely, following our business. You can see we have a slide which shows our revenue growth over the last few years, literally the last 15. You can see that every year, we've increased sales year on year on year. And this year, we've improved sales from $85.1 million to $105.6 million. So we got a nice upward kick in sales. And as you probably know, we have our home markets in Australia and New Zealand. We also have additional offices in Malaysia, Kuala Lumpur; and Singapore. We have an Asian business. And then around the rest of the world, effectively, we're out-licensing to licensees or distributors, and they sell our R&D-developed products on our behalf. We're listed on the NZX and ASX, and market cap is somewhere over $400 million. So that's just a brief overview. And flicking on to the next slide, Slide #4, just to look at some of our FY 2020 highlights. We've been working hard on making progress. Obviously, there's a few curveballs that have happened this year, but we'll still be working on making sure we deliver on our various plans. So one of the things we're working on is to increase the number of countries in which Maxigesic is sold in. At the moment, we're selling in 28 countries, which is an improvement from 20 or a 40% increase over the last year. We did have some delays, actually pretty much related to COVID. We had about -- orders from another 10 countries which actually did get held up. Otherwise, that number in our top line sales would have been even better. But it is still a good pleasing increase going with a 40% increase. Now operating revenue, that improved 24% over the year. So as I mentioned before, last year, we had sales of $85.1 million. This year, we've improved it to $105.6 million, so a 24% increase in revenue. And then, I guess, of that as well, we had an improved profit, as you probably expect. So the profit is comprised -- we've written here the normalized profit. So normalized profit was $11.4 million. Now without getting too complicated though, there was also an additional one-off gain. So our guidance was from $18.8 to $21.8 million. And in fact, our profit was $21.2 million if we include that extraordinary item. And that's improving either way the 11.4 -- or the $21.2 million is a significant improvement from the $6.1 million last year. And then going through to our net profit or the bottom line after interest expenses the like. We had a significant improvement last year. We didn't quite get to breakeven. We got to a loss of $2.4 million this year. We had a normalized net profit of $5.3 million. Or if you include that extraordinary gain, it was $12.7 million. But either way, we had a significant improvement on the bottom line. What was also positive and pleasing to see is we had an improvement in our operating cash flow. So obviously, as I'm sure all you finance people know that cash really is one of the key, key parameters, and we were able to improve our cash flow. Last year, we had free operating cash flow of about $1.1 million and, this year, have improved to $14.9 million. So certainly, that was a noticeable change over the last year in our business. And then in terms of equity, the equity, along with all those other results we just talked about, improved 239% over the year. So basically, last year, we had $5.1 million of equity, and we've improved that to $17.3 million. So look, those are our highlights. So you can see they're all green arrows, which is positive, and all reasonably good percentage improvements. So that is that page. And now moving on to Page #5. This is a summary of breakdown of our revenue growth in home and international markets. So what we can see is we've got continued growth in established markets of Australia and New Zealand. One thing we're quite conscious of, actually, as we picked up during the year, that there was an impression in the market that everything was about our international business, which is very, very important and a key growth driver. However, we've done a lot of work as well on our local business, and we literally in-licensed well over 30 new products, and those are all in various stages of getting close to launch or being registered. And we see those as driving significant growth in our local businesses going forward over the next 3 or 4 years. So we see, as you can see, on the FY 2020, we got 22% growth in our Australian business. So the other thing, I guess, at this stage, we're more of an Australian company, always have been for the last few years with the majority of that business in Australia. In New Zealand, we performed well, we've got a 12% improvement, got just over $30 million. And then we had good growth in rest of the world. But still, we've got a lot of work to do because over time, we see that share of the pie, if you look at the pie graph on the far right, the FY 2020, the yellow looked -- that will spread out significantly over time and, I think, will deliver on our plans. So at the moment, you can see it's about just under 9% of our business. And what we can see is outside Australia, New Zealand, like last year was under 10% of our business. This year now, it's about 13.3% of our business. And over time, we really see us getting proportionally more growth out of our international business. However, Australia still is significant and will continue to always be a significant part of our business. We see a lot of opportunity in the Australian market. So that's that slide there. And then moving to Slide #6. A bit of a complicated slide, but just -- it's financial performance, revenue by region and channel. So you can see really just looking at all the different segments. We have Australia, New Zealand, rest of the world, Southeast Asia. We see we have our -- in the yellow where there bottom line growth overall of 24%. Southeast Asia was -- pleasingly grew there, 130%, so getting more growth out of that market; rest of the world, 55%; New Zealand 12%; Australia, 22%. And what's also important is that we have also focused over the last few years, you see the pie graphs on the far right, on also improving OTC business. Generally, OTC products do have better margins and also are not subject to vagaries of government funding decisions or things like that. So certainly, we say it is positive to have a proportion of our market -- or a significant proportion of our business in the OTC area. Having said that, though, we still do want the diversification. We've seen in some of the challenges with COVID that the hospital business in Australia has been very strong, where the hospitals there are being very proactive and building up a small stockpile and stuff. So we certainly noticed that. And once again, it just screams that it's good to have a diverse portfolio, especially in our local markets. The standout one at the moment, which is not diversified as we would like, is Southeast Asia, where predominantly at the moment, we have a lot of hospital business. This is something we recognize, we need to work on over time. But often in places like that, the hospital business maybe is easier to secure first. And then over time, you can use the profits and the money from that to build out the OTC business, which really doesn't make money straight away. So it's good to be able to fund it from proceeds of hospital sales, and that's really our plan going forward in the Southeast Asian market. So look, just to flick over, and we get on to the real serious financial stuff, so I'll hand it over to my CFO, Malcolm.

Thank you, Hartley. So we're on Slide 7. We picked the main lines of the consolidated income statement. The -- on the slide, it's fourth line down, the underlying operating profit of $11.4 million. And that's driven by the revenue growth on the top line there, which Hartley has talked you through. The gross profit margin stays in the sort of 45% to 50% range. It did drop a little bit on last year, and that's with the increase in the hospital sales, which come at a slightly lower margin than OTC. And then the other important feature is that we're now leveraging our overhead spend. So that drops from 40.7% down to 34.9%. When we then add back the nonrecurring gain, we get to the operating profit of $21 million. Finance expenses -- financing expenses and income stayed around the same as last year at $8 million, and we will see a good improvement in that spend now that we've refinanced on more commercial rates in Australasia. So that leaves us with our net profit after tax of $12.7 million. If we turn on to Slide 8. And again, we've taken an abbreviated balance sheet to pull out the main features. The main feature being that we've changed, the 6-year loans that we have from Capital Royalty that became current last year has now moved back down into noncurrent to a 3-year facility with the BNZ. Total assets have grown. Working capital increased with the strong sales we had towards the end of the year associated with COVID-19. So [ debts ] are up. Inventory is down a little bit. Noncurrent assets have increased. That's the Pascomer valuation of $12.5 million, development costs, and we've had to introduce the right-of-use lease assets, which is our offices and our cars and photocopiers. And then the other main feature of the balance sheet is the equity climbs up now to $17.3 million. Moving on to the next slide, Slide #9. Three main features of the cash flow: Generating $14.9 million from our operating activities. We invested $6.5 million of that back into development costs. And then we had the financing expenses. So our cash, a little bit of outflow of cash, $800,000; and the cash balance stays around about same, $6.1 million from $6.9 million same time a year ago. Moving on to Slide 10. This is where we show you the big investment phase that we had between '15 to '18 on development costs. Most of those were expensed back then. And then the last 2 years, we're seeing the operating profit growing back again. Again, we're showing the normalized operating profit for this year. And then we're giving some guidance for next year of increasing at $11 million to somewhere between $14 million to $18 million. I'll pass back to Hartley now for Slide 11.

Yes. Thank you, Malcolm. So yes, look, in terms of one of our key drivers is the new product revenue pipeline, and this will certainly help to drive our international sales. So basically, Maxigesic IV is one of our key products. What we saw last year, we reported to the market that we're interested in, there was some independent research that showed that Maxigesic IV saw us having a significant upside in major markets like the EU top 5, the United States and Japan. So this is certainly a key product. We have now managed to increase our number of registrations last year. We were able to register -- get our first registrations in Australia, New Zealand and UAE in the Middle East. And since then, literally, in the last couple of weeks, we finalized our first tranche of registrations in Europe with 18 approvals, which is very, very positive and great progress. So that is really important. And then going forward, over the next at least 12, 24 months, we'll be working on lots of different territories. In fact, we've got lots of filings that have gone on at the moment in all sorts of territories, and we're working those through. Our Maxigesic Oral Liquid is our pediatric dose form for children mainly because tablets are not suitable to be taken by kids. You can't get the acceptable dose titration for age and weight. Kids' medicines are always the most difficult out of any registration. It's always the pediatric area because kids are very challenging in terms of clinical studies and in terms of registration as well. So this is underway at the moment, making progress in Europe, Australia and New Zealand, and we would hope to be able to report some positive news at least over this financial year in terms of progress in that area. The Maxigesic hot drink. So it's basically like a cold and flu product, like you put it in a cup with a bit of hot water. So that one, we completed the development, and we did our first filing December, the end of last year. So we've got more new filings coming at the moment. And then also, we obviously have to turn the registration application into a registration. So that is in progress at the moment. We have a rapid, fast-acting version of Maxigesic. We're licensing technology off a U.S. company, and that's in development at the moment. We successfully developed it and just finishing off some manufacturing data, and we would be working on getting our first filing in either the end of 2020 or beginning of 2021. So there's that. Maxigesic Cold & Flu. We completed work around that. And we're working on literally our first filing. We will be planning to do that next month in June. So we made good progress there. Pascomer is the orphan drug that earlier on, we announced we licensed North American rights to Timber Pharmaceuticals, which is an American company. The positive thing about that announcement and deal was that in exchange for North American rights, they agreed to pay for the ongoing development work in terms of the first -- or the pivotal clinical studies. The first of those is underway at the moment in the United States, in Australia, New Zealand and Europe. And I mean, to be frank, I guess, the COVID outbreak has not made clinical research any easier. There's been some challenges. Certainly, some of the U.S. sites have stopped enrollment, but it's starting to open up again now. And in fact, not this week but last week, we enrolled our first 6 patients in Spain. And as we all know, Spain was particularly hard hit by the COVID outbreak. But we see now things are returning to normal and patients are getting enrolled into studies. So that study is underway, and we'll just work our way through. It's 120 patients. It's an orphan disease. So yes, there's not hundreds of patients around. So getting patients is always a key area of these studies. So that is underway. A very important program. And then last but not least, we have a drug delivery device called NasoSURF. [ That particularly ] has been delayed, once again, by COVID, to be frank. It's manufactured in Southern China, and the factory did -- it was supposed to be made in February. The key pilot-scale batches, they got slowed down by the COVID outbreak as many of the workers went back during Chinese New Year to the provinces and then didn't come back to the factory for a month or so. But look, the factory is up and going full speed at the moment. And those pilot batches have been completed. And the next step is the engineering batches in August. And then also at the same time in parallel, we will be working this year on the clinical side as well. So as soon as we finalize that device -- perhaps the device side, which is underway this year, then we move into the clinical studies as well. So that is progressing, and we've made reasonable process despite various curveballs from viruses. So that's Page 11. The next page isn't numbered, but it's Page 12. It's just a Maxigesic global update. I apologize. There's quite a lot of detail on it, but it's just sort of color-wise to give you an overview. What we can see is we've got more areas of blue. Where we've licensed the product is the blue areas. Yellow is where we've launched the product. And white is where we've not yet concluded a licensing deal. So the obvious sort of big white space is the United States. So we've got various negotiations underway. We've literally got a couple of term sheets there and working on those, but these things always take time, especially in the large markets. But we would expect over this term of this financial year for that big white spot being the biggest pharma market in the world, the U.S., to turn from white to blue. Being we have done some licensing now in South America, so we're just working our way through. We're working on an agreement at the moment for Brazil, which is about 52% of the Latin American market. So it's the most significant one. So we'd also hope to grow out a significant amount of that market as well. The other major place is Japan. Obviously, it's one of the world's more significant pharma markets, being about #3. And we have got discussions underway there. And we certainly had our first 2 meetings with the Japanese regulator called the PMDA: The first, we're able to do in person back in January. The second one, we had to hold it remotely for obvious reasons, and that was about a month ago. So there's quite a lot of work underway in Japan as well. Then the other, I guess, big white spot is China. We also are doing some work at the moment with our licensing negotiations and discussing a term sheet with China as well. India's the other obvious big white spot, but really, that's not a target market for us. We don't intend to enter that market. But you can see, though, once we continue with our progress, we can really make significant progress around literally the world. And the key thing there, obviously, well -- as well in parallel is the launches. So you can see there's an increasing number of yellows, where we launched in Spain and Portugal, the Nordics as well. And we've got a number of launches coming. The major push this year really is launches in Mainland Europe, so Germany, France and all those sort of territories. So that's where our major push is. And the other major push is Russia as well, where we've got inspections of our manufacturing facilities, which is interesting because most of the inspections have been -- physical inspections have been stopped. And the Russian authorities were very proactive and agreed to a remote audit, effectively, where we can walk the auditors around the factory with video over the Internet. They can inspect documents on a remote portal and then effectively do the audit that way rather than standing in the factory, checking everything out. So Russia certainly is a significant territory as well which we're working on. And the other one is Canada, where we achieved our first registration of Maxigesic tablets. And we signed up a deal with a local Canadian company listed on the Toronto Stock Exchange, and we're working on launching in Canada, I think -- yes, later on this year. So that's a sort of global map for global updates, and then flicking on to the next page. Look, this is just a bit of a graphic, I guess, that gives you an idea about some of the different packaging around the world. You can see our New Zealand, Australian packaging. Italy, we've launched and has gone really well as a prescription medicine at this point in time, but it will morph into an OTC medicine as well, which will then further increase the sales. We've got launches coming in Belgium and Luxembourg as Combophen. CACM, at Central America, on the second row is Paraconica Plus. So that has launched in some Central American countries, and we have to launch in more. Like, Panama is really the key market there, and we haven't yet launched in Panama. So that's coming as well. UAE, we've launched quite a while ago. Products come very strongly there. The local distributors got great results. Ireland, Easolief Duo, it's gone well there. We did the launch there a couple of years ago, and now recently sales literally tripled in Ireland just with the COVID side of things. So that certainly made good progress in Ireland. Then we got Singapore, Malaysia. The Nordics, Dolerin. They launched this as a prescription product. Israel, the product is selling well in Israel. Spain and Portugal with pink packs. Certainly, they've had great progress. We work with Kern Pharma. That's a very strong local company in Spain. And France, it's gone a bit slow. There's a lot of changes in France with labeling and various regulatory requirements, which had slowed that up. That's being launched as Cetafen and working on that to be launched later on this year. Germany, launching with a partner as Duoval with Ever Pharma, which is a very good Austrian-German company that has a good local position. And that's sort of our strategy most times, is we really want to work with strong local partners that are good at selling product, and they just do all the basics in the market really well. So that's -- they -- Ever Pharma fits our profile of companies we try and work with kind of really well. Then we've got Eastern Europe. We're just working on the launches there at the moment. And even Albania, I mean, Albania is not a big territory, but we've had a guy there that we've worked with actually for many years, and he's a very good local operator. He knows how to sell stuff, and he's actually got some great results, and his sales are going really well. He's got it on TV, and he's got a real quirky TV ad, which they must like in Albania, and sales are going great. So that's a small country, but it all kind of adds together. So that's a look at our global sort of combo packs so you can get an idea of that. And then flicking onto the next slide, #14. This is sort of our progress sheet or our cheat sheet or whatever for the global rollout of Maxigesic. So one of the key areas really is in the IV to work on increasing the number of licensed countries. And we can see that did improve quite a bit last year from 68 to 80. And we've actually got a lot underway at the moment, where probably with COVID, things slowed down for a couple of months. We noticed that, like literally, the last 2, 3 weeks has been crazy, crazy with late night Zoom calls with people in Europe and staff and people in the U.S. in the early morning. So yes, the licensing, we would anticipate a significant number of new licensing deals for Maxigesic IV during this financial year. And registrations last year, we did only, as I mentioned before, get 3, but we ticked off another 18 a couple of weeks ago. So starting to make better progress there as well, and that will escalate over time. And then obviously, our first launches, we will sell this year. We got stock on the boat at the moment to Australia and New Zealand and the Middle East. And then we should get further launches in Europe towards the end of the year as well. So that's for the Maxi IV. Tablets is the other one that's important. We haven't had that many new registrations this current last year. We've got a lot of filings that have just sort of gone in, in a large number of countries. So we'd anticipate a lot more registrations this year and also next year as well. And also, the sales, the number of countries will escalate where we literally did have 10 orders ready to go on the boat. But what happened, the Indian government made a somewhat arbitrary decision. They were going to hold -- they put a ban on export of any product that contained paracetamol even if it wasn't registered or sold in India. And literally, we had 10 countries where the orders got held up and wouldn't ship. That export ban has since been lifted, and a lot of stock is on various boats and stuff like that. But if it hadn't been for that, that 28 would have been 38. But that's -- I guess it's a delay, but it's just a delay in the plan, but the plan is still happening. And we would anticipate a significant increase in countries this current financial year. So the next slide being Slide #15. Look, this just gives you a bit of color or picture to show how the launches are going to start or plan to start to roll out. You can see that at the far left, back in the day, FY '14, we really only sold Maxigesic in Australia and New Zealand, which are our local home markets. And then as time went on, we added UAE, we added Italy, and the number of countries are starting to build. And this is basically looking at sales and orders. So this is slightly different from the last graph. So you can see sales and orders. In the last financial year, we had 43 countries because there were some countries we had the orders, but we didn't actually have -- they hadn't been shipped so we couldn't count them as sales. So that's 43, though. So that gives you an idea this is some good progress there. Then this year, we're looking at increasing to about 66 countries; and then the following year, over 120. So that will help to drive international sales as we get more countries. And then also, we'd anticipate and expect sales to build, but they don't go up straight away. They literal build over 1, 2, 3, 4, 5 years. As well as that we would be adding in some new dose forms. So there would be the intravenous we'd add in. And then we have things like the sachet, the oral liquid and some of the other dose forms. So really, it is a number of multiple things, like multiple launches, new dose forms to build those in to further expand and kick on the international sales. So that is Slide #15. And then just to come to the closing slide, Slide #16, the outlook. So look, this is things we're going to work on and we are working on. So really, it still remains a key aim of our business to further drive the international sales. So it's like we've been talking about, keep on accelerating countries that we're launching products in and also too, as we're saying, launching new line extensions. So it's doing those 2 in parallel, and we see that as improving and kicking on the international sales. As well as that, it's pretty important as well to extend international licensing. We got a lot of good contacts around the world. But it's a matter of nailing down some of these term sheets and various discussions we've got underway at the moment. So -- and in some of the big territories, obviously, like China, Japan and the United States. So those are literally the world's biggest pharma markets, amongst those 3. And then also, Latin America is probably a more challenging area to do licensing, and we've got work underway there and numerous discussions as well. So it's really getting further progress in Latin America as well. And I mean, what we saw was last year, just to look at the next point, is we did make progress where we did kind of license additional territories in Canada, Chile, Colombia, Cyprus, Germany, Indonesia, Pakistan, Peru and Switzerland. So obviously, the first part of doing the deal, and then the next part is getting things sorted with filing and then getting the registration completed and then obviously launching. So a lot of work is still going on with those territories as well where there's good potential. I mean even places like Indonesia is still the world's fourth most populous country. So certainly, a good potential market. And obviously, Germany as a powerhouse in Europe with the largest population of any European country. So that's an important market for us as well. And part of this has been -- is driving increased upfront payments. We do have licensing income, which we certainly got last year, and we obviously want to, I think, keep that coming and, if anything, try and improve it as well, where some of the larger territories do attract more significant upfront. So that would be a great source of income. And we're talking about is the United States or Japan or China, where there are more -- generally more significant upfront payments than, say, if you'd done a deal for Central or Eastern Europe or be it the CIS or something like that. So that's a key angle. And then look, last but not least, it's certainly driving our local sales as well. We've got really good sales operations, lots of sales force. Australia, we slightly increased that sales force as we hired another salesperson in Victoria to beef up our team further. New Zealand, we're making good progress there as well in a number of our local markets. So really, it is working on this hard as well. We've got a number of new OTC launches. With COVID as well, it has introduced some new product opportunities, some changes in consumer behavior. So we have -- or are launching products to cover off those areas as well. So it's really making sure that we're operating as well as we can in what is a slightly different market from what we had a year ago. But the thing is we're adaptable, and we still see that we can progress well within the existing market. And there's lots of opportunities. Then it flows through. We've improved our financials in FY '20, and hopefully, people can start to see that we work really hard on delivering on our plan. We're not looking at doing things like buying other companies and things that often people think are pretty fancy and stuff. We're spending our money on R&D, developing products, organic growth, organic business, things that we can control well ourselves and then just delivering on the results and the things that we promised our shareholders. So then in terms of guidance. Operating profit, we're looking at the moment between $14 million to $18 million, and obviously, if we can get some decent license agreements, we might be able to change that a bit. But at this stage, $14 million to $18 million is our target, which would be a 23% to 58% growth over our operating profits in FY '20. We will be generating. We see we'll be generating additional cash flow according to our budgets. And we saw that last year, we had a reasonable operating cash flow. And I mean, at this point in time, we really would be aiming to further reduce our debt. I mean the first stage was what we all said to people. We would look at the end of our term with CRG to refinance our debt so that would -- well, with that being said, we just carried that through. And I mean, it's worth noting that was at the height of the COVID panic. So it was really good to work with a stable banking partner that we're used to working with for years and years and make sure that those basic but really important things happen. So that's now in place. It's a 3-year facility. We've got really good cost savings as well. So really, it's been using those cost savings and the additional cash flows to further reduce our debt really going forward, and that's part of our plan. So that's sort of kind of it to finish, up. And hopefully, that's been reasonably illuminating. And happy for Malcolm and I to try and take any questions that the audience may have.

[Operator Instructions] Your first question comes from Christian Bell with Jarden.

Just wondering, while the full year licensing income had gotten a significant step-up from last year, just looking at the second half, why it was a little bit down from the first half, do you -- are you able to sort of provide some color as to why licensing income was down in the second half?

Sorry, Christian, that's a little bit muffled. Is the -- are on you on a speakerphone?

Hang on. I'll switch phones. Can you hear me now?

Yes, much better. Thank you.

Okay. Cool. The full year licensing income, while it was quite a significant step-up from last year. Just noticing that the second half of '20 was sort of a little bit down from the first half, just wondering if you're able to provide a little bit of color as to why that happened?

Well, that would be -- between the halves would be timing.

Probably just timing, really. Yes, I think. Probably had quite -- some quite significant deals -- we had some -- maybe some quite significant deals in the first half. And also, we had quite of milestone payments from one of our European partners. So the licensing income can be lumpy. It's not -- a lot of it's not consistent, I guess, and that's one of the challenges. So it doesn't necessarily come in consistently over time. We had quite a big payment last year in April of about EUR 0.5 million for the first milestone kind of from one of our licensees. So in Sydney, a lot of our agreements have mixtures of various payments. So there's a market signing payment, and then there's a payment on registration. And then there'll be -- with quite a lot of them, there'll be some sales milestones. So once they've sold x million or something like that, then they will have a sales milestone. So that can be quite hard. Well, you can still forecast, but then obviously, you can't tell exactly which time period it falls in. So we do so sort of have [ guidances ] and then also with signing them can be quite hard to work out when we're going to sign as well.

So if we hadn't seen the holdup from India, the plus 10 additional countries, that number could have been quite different.

Yes. No, look, I mean, basically, the holdup of export orders hit us in the sales line because we couldn't book those sales because, obviously, the audit us for revenue recognition is when it gets on the boat or even when it gets to the customer that they let us book them. So yes. No, look, that's certainly cost us well over $1 million of sales and kind of more than that. So yes, that was a bit of an effect. That was negative.

Okay. And then just wondering, do you have a sense of what the current market share is in New Zealand and Australia for the tablet -- Maxigesic tablets?

Yes. Maxigesic tablets, the latest data in Australia was we've got improving our market share lead at the moment. So we're about -- for the quarter, were about 37% or 38%, and we're increasing in share over Nuromol. So the Maxigesic marketing share was improved in New Zealand. It's relatively stable, I guess. So yes, that was -- but Australia was seeing an increase in market share.

Okay. Cool. And sorry, just one more for me. So just looking at the graph on Page 15, the sales plus the orders. The difference between 43 and 28, we can sort of put 10 of those down to the delays in India. Just wondering what that additional difference of 5 was.

Yes. Yes, yes. So basically, there was 10 that were made and ready to ship and got stuck. And then there was -- the balance of that was in manufacture. So that was basically being made. So yes, if you add all that together, you get 43. [ 28 in orders... ]

[Operator Instructions] The next question comes from Joeri Sels of Js Alpha.

Congratulations to team AFT for these excellent results. Three questions please. Firstly, you mentioned the new product is the sanitizer. Can you put a little bit more color onto that one? Is it only for the domestic market? And is that -- does that have any significance in terms of volumes and what do margins look like? That would be the first area. The second question. As you mentioned in your release that in April, you recorded significant growth year-on-year, can you confirm that this is carried on in May? And the third question. Can you maybe run us through the underlying assumptions of your EBIT guidance for the new year?

Yes, Joeri, sorry. What was the -- can you do third -- tell us the third one again?

First question was on the sanitizer, which markets...

Yes, the third.

The first question was on sanitizer, the second one on trading in May, and the third one is on the underlying assumptions of your EBIT guidance.

Sure. Yes. I got you. So look, maybe I can talk to the first 2, and Malcolm can handle the last one. So basically, the new product was the hand sanitizer. So that is solely for our local markets, Australia and New Zealand. So we're selling that as a line extension. We've got a very successful range of products under the Crystaderm banner. So particularly, we have a product called Crystawash for our hand sanitizer. And I mean, generally, we see people are going to use these products more on an ongoing basis as well. So it makes sense to have it as a line extension. So with that product, we've got reasonable sales of that at the moment. And then in terms of sales progress at the moment, April was strong or significantly ahead of last year by quite a long way. May, so far, first half May has been a wee bit soft, to be fair. I mean we do sort of quite often get that. We get like a strong month and then a soft month, and we're sort of seeing that, where May has been a bit softer. What we would expect to see certainly in the retail area is customers' return to pharmacy. So probably pharmacies got a reasonable amount of stock, and there, the sales may be a bit slower in May and even June as well. But then foot traffic now in Australia is back to normal, and the strip shops on the main road are especially apparently totally back to normal. Shopping malls are still a bit quiet. So they say that it's really impacted them because people can't go in groups for coffee and stuff like that. So the malls are a bit quieter. But overall, the traffic is back in Australia, which is the most important market. So yes, we see sales is picking up again. We did see a little bit -- we are planning for the possibility of a second wave as well. So we're being pretty careful with stock and things like that. I know -- I think we've seen a lot of our distributors -- like, we had a big call with Russia this week, and they are certainly planning in Russia for a second wave coming next winter, during the Russian winter. So I'm sure, as you know, it's pretty severe. So that's sort of the pattern we're seeing at the moment. And Malcolm, maybe you could talk a bit about the last one, please.

Yes. So look, first, our internal budget process is we build it up by brand, by product, by market. So for Australia, we're looking at every single product that we sell, we go through with management, and we look at what we've been achieving, and we have a marketing and sales plan as to what we want to achieve in the coming 24 months. We build that up the same for every single market. So then with the overheads, we look in detail at all the different overheads, and that what gives us our budget. So in terms of underlying assumptions, it really is looking at every single product and what we believe it can do in the market.

And then it's looking at some launches as well, where we've got the forecast and the orders. [ The part ] we have don't tend to budget as much and is more difficult as the licensing income, where that's much more lumpy, so we'll usually put in underlying. So if we know there's some fairly predictable milestones, say, around registration or something like that, we'll include that. There is some upside, potentially, we get some decent licensing agreements, we do a deal in the U.S. or something, and that brings in a lumpy sum, that type of thing.

Well, maybe you can follow up. I asked you that question to try to figure out if the guidance is conservative or very conservative. I mean you -- it doesn't fit very well to the rest of what you've been saying, including Maxigesic acceleration, you start in the April or with the deferral from the ship in India, you have [ still ] products, et cetera. I mean, effectively, when you look at the lower end of your EBIT guidance, it is exactly or nearly exactly twice the level of what you have achieved in the second half of the last year. So this means, just arithmetically, either you do not expect further consecutive top line growth or you expect some margin compression because costs are going up.

Yes. Thanks for that, Joeri. Look, we're comfortable with guidance that we're providing. And as Hartley said, we do not have any significant licensing income included in that forecast. We are working very hard on getting additional licensing income on upfronts.

[ Works within ] the additional upside. But I guess, we don't include that in the guidance.

We're going to have to finish this call, I'm afraid, in the next minute or 2 because we have -- our next one is coming up at 11 o'clock. Rachel, I can't see any more people on the question queue.

None, no one actually registered for a question.

Okay. Hartley, do you want to...

Yes. No, look, I think from our side, we've answered most of the burning questions, and we've given you a reasonable overview of the company's progress in the last year and what we're planning to do going forward. So thank you very much for your attention. And we look forward to continuing to deliver our results over time. Thank you.

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