Cambridge Nutritional Sciences plc (CNSL.L) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Cambridge Nutritional Sciences plc Final Results Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives in the meeting itself. However the company can review all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand your over to CEO, Jag Grewal. Good afternoon, you sir.

Thank you, Alessandro, and welcome, everybody, to the final results presentation for the year ending 31 March 2024 for CNS plc. Just a quick disclaimer and brief introductions to myself and James Cooper, COO. For those who don't know me, my name is Jag Grewal. I'm the Chief Exec of CNS plc. I've been with the company for just a little over 13 years, having started in 2011 as their sales and marketing director. I've been in the medical diagnostics industry for nearly 25 years, actually almost 30 years and also I'm a current director of the trade body for diagnostics, representing the U.K. diagnostics industry. Where diagnostics plays a huge role in health care, in fact 80% of medical decisions are often based on a diagnostic. I'm personally very passionate about the role diagnostics plays in health care and more importantly in wellness. Today I'm joined by my colleague, James Cooper, our COO, and I'll let him introduce himself.

Thanks, Jag. Good afternoon, everyone. My name is James Cooper. I joined CNS at the start of this year as Operations Director. Previously I was an operations consultant for almost 10 years, delivering a step change in improvements across a wide range of industries. Most recently, this included projects, doing productivity and efficiency improvements in large contract pharmaceutical manufacturers and medical materials company. Since joining CNS in January, I've been focusing on improving our operations. And in May, I joined the Board as COO. I'm proud to be a part of CNS, and I chose this company in particular to join because I believe we've got a really solid business model and great potential going forward.

Thank you, James. Okay. We'll probably come off camera now and go through the presentation, which will include an introduction to the company for those people online who are not familiar with the company in terms of its products, its markets and what it aspires to be doing. We'll then switch to the main part of the presentation, which is our results for financial year 2024, and then we'll describe our future growth strategy and summarize at the end before we switch to the Q&A session. So who are we? Well, actually, who we are now is a company that promotes a personalized approach to health and specialize in manufacturing, selling and marketing a range of tests that are primarily associated with food sensitivity and gut health. And increasingly, it's really being recognized how important gut health is to overall health and well-being. You can't escape the fact from news or social media nearly every day that links gut health and, more importantly, poor nutrition to chronic inflammatory disease in a range of conditions. There are many causes of poor gut health, modern lifestyle, lack of fiber in our diet, the lack of plant material in our diet and too much reliance on meat and things like sugar, sleep, exercise and stress. And all of that causes poor gut health in a wide range of the populations. And diagnostics itself is essential in helping those health care professionals dealing with patients and health care consumers to identify causes of poor gut health. And managing that patient journey, which sometimes lasts over a year in improving gut health on a journey to better health care and wellness going forward. We've been doing this for a long time and are recognized in the marketplace for food sensitivity as one of the global leaders in diagnostic test kits and services in this area. About 85% of our revenues are actually outside of the U.K., and we service over 75 countries globally with our products and services. Our main customers are health care professionals, enabling them to make informed decisions in working with their patients to improve long-term health. Those health care professionals tend to be people like nutritional therapists, naturopaths, functional medical doctors and increasingly, sports medicine practitioners as well. And the way we differentiate ourselves in the marketplace is through science and more importantly, education. We have an academy system that we promote in all of our markets. And this increases the awareness amongst our health care professional target audience where they can see the value of such tests when they're managing their patients over the long term. And the way we do that is through webinars, studies, working with key opinion leaders and professional bodies around the world to drive that awareness and ultimately drive the increase in demand for our tests around the world. As I said, we're a global organization with presence in over 75 countries globally. We operate a more direct laboratory testing service here in the U.K., services the U.K. and Republic of Ireland. That's called CNSLab. That's laboratory testing services using the test kits that we make and manufacture in Ely, Cambridgeshire in our own lab to provide testing services to health care professionals and the public in the U.K. We also have a direct commercial operation in India, which in itself is a very exciting and growing market for us. But the rest of the markets around the world are handled through distribution partners who will buy our products, our kits and systems and sell them to labs and health care professionals in those countries. And really we're targeting the personalized health and wellness segment in all of the markets that we serve. Our distributors or rather we say business partners are particularly skilled not only in importing and registering product in all of those countries, but they're also experienced and knowledgeable in developing markets and increasing awareness through the tools we give them with our academy system to drive the testing demand in all the markets they serve. But ultimately, our real customer is the patient or the health care consumer. And these are typically divided into 2 types of patients. The first one is those that are living with chronic long-term conditions, often inflammatory diseases like IBS who generally are failed by routine health care pathways and are looking to resolve their condition accordingly. And often, nutrition and diet plays a huge role in improving their lives as they go through this journey. The other portion of customers that we serve and patients that we serve are those that are looking to maintain wellness as a principal goal for their lifestyle. And this is even more evident now post COVID. People are much more aware of the utility of diagnostic testing and the maintenance or wellness to be better-protected going forward. Our products and our brands are listed here. One of our flagship products, our main flagship product is the FoodPrint system. This is a microarray-based immunoassay technology that allows us to analyze blood and measure IgG antibodies, which are long-term memory antibodies that reside in your blood to over 200 different foods. And the beauty about having a microarray is that you can test all those foods and the antibodies for those foods just from a few drops of blood, and that is really, really useful and very, very important feature of our technology that allows home sampling to be done from a few drops of blood from a finger prick sample that can then be sent in a routine postal system to either our laboratory in the U.K. or to one of our over 170 partner laboratories worldwide. We then have Food Detective, which is our professional near-patient testing system, a system that can analyze those immunoassay and antibody reactions for 59 foods. And this product is typically found in a clinic setting or sometimes in a pharmacy setting where the patient can come in, get tested and have a result for those 59 foods in a little over 40 minutes. Our next brand is our digital platform that I will describe in a bit more detail a bit later on in the presentation. This allows particularly the FoodPrint test results to be sent to the health care professional and their patients and connect the 2 up to allow them to go on that journey in managing and improving gut health in the future. And I'll come on to that a little bit shortly. And then lastly, our brand, particularly in the U.K., is our UK lab, which uses our manufactured kits and systems and provides a direct testing service for health care professionals and the U.K. public in the U.K. and Ireland. Okay. I will hand over to James, who will go through the real purpose of this presentation today, and that's the results for the financial year 2024.

Thanks, Jag. In this section, I'm going to expand on both the financial and the operational results from the past year as well as the outlook going forward. So I'm going to start with a summary of our financial results by highlighting 3 key metrics that we believe illustrate the story of the past year. Firstly, the graph on the left depicts how our revenues evolved over the past 3 years. As some of you may know, FY '23 was a bit of a challenging year for us due to some production issues and that led to a substantial number of orders being carried into FY '24. Well, I'm pleased to say that these issues were resolved in the first half of FY '24, and that meant we were able to catch up on FY '23 without impacting our ability to deliver on orders received in FY '24. The result of this was a great year, as you can see on the chart, with revenue up 30% from FY '23 to FY '24. The on-site team have been working really hard to put in place the tools and structures to ensure that we don't have a repeat of the issues in FY '23. Therefore, we don't expect to carry as larger backlog in future years. So to give you a better depiction of the revenue evolution, we've shown the estimated average backlog in that purple line and what the total revenue in each year would have been were we not to have had the issues that led to the very large backlog being carried into FY '24. This gives a better idea of the underlying growth of the business. The second key metric, I'd like to highlight, is the gross margin. FY '24 saw a significant improvement in gross margin to its highest post-COVID level. This was driven by improvements in yield and productivity as well as being assisted by a shift in the product mix from 4 to 16 patient kits. Achieving a gross margin of around 62% demonstrates that the business has really overcome the challenges of FY '23 and is now in a really strong position going forward. And then finally, on the right, I want to draw your attention to the cash and deposits. Following the disposal of the Alva site in FY '23, FY '24 was funded solely through ongoing operations, and our total cash and deposits increased by 6%. This again demonstrates how the business has continued to improve and is now generating cash. The group has also taken proactive treasury control steps by placing part of the cash in a high-interest account which has a maturity of 3 months or less, thereby creating an additional source of income at minimal risk. The next slide details in more depth the last 3 years of financial results. Some key takeaways include an increase in the proportion of revenue from our flagship product, FoodPrint, from 55% to 62%, a 7% reduction in the cost of sales despite the growth in revenue, due in part to improvements in our yield and efficiency. Our administrative costs have increased slightly, but this was generally due to one-off costs related to the original improvement project and write-downs of obsolete assets during the year. And then finally, a return to positivity of our adjusted EBITDA and a reduction in exceptional items with no further costs incurred from our discontinued operations in Alva. I will now move on to some of the operational highlights that led to these results. As I previously mentioned, the key driver of our gross margin improvement has been an increase in yield in the microarray department. This was kicked off with an intense improvement project with Chartwell Consulting at the start of the financial year. And the team have continued to identify and implement further improvements on our aging microgrid machines. This is being led by our CI specialist, who himself was a member of the original project team. Another area of improvement has been the CNSLab. This is where we receive patient samples and test them using our own FoodPrint tests. The team have completed an improvement project, which significantly increased the capacity. And this has enabled revenue from CNSLab to grow by 58% without any additional head count. The improvement has also enabled us to half our advertised turnaround time to 5 working days, increasing our competitiveness. A more recent initiative is a redesign of our sample collection pack. This is what we send out to customers to take a fingerprick blood sample and they send back to the CNSLab. This redesign includes a move away from a nonrecyclable plastic pack to a more customer-friendly cardboard design and an update to the contents of the pack as well. This will result in a 78% reduction in the amount of single-use plastic in these packs. And the new sample pack has been designed in a way to make it easier to produce, reducing the time and effort required internally. As well as improving our current processes, we are also building for the future. This has involved identifying areas where we can make quick wins to improve the productivity and efficiency. I'm going to highlight 4 examples here but these are just a subset and there are many others, both in progress and on the waiting list. The first is the installation of a brand new flow wrapper that we inherited in the split from Alva. This has been put to great use in our Food Detective production, reducing the time and resource required to pack our product as well as the space it takes up for shipping. New in-line labeler in the filling department has eliminated the laborious hand labeling process and reduced the time taken for a full run from 3 days to 1. These investments are not limited to the production floor though. In QA, we are moving away from an old QMS system that we've been using for over 10 years to a new eQMS system with greater functionality not only across QA, but also in development and production. This increases efficiency and improves QA's oversight. The fourth example involves an improvement that saves time and decreases risk. We are in the middle of installing a wireless temperature monitoring system, and this will eliminate the need for the time-consuming manual paper checks and offer 24/7 alerts if an asset or environment goes out of spec, allowing us to quickly respond and reduce the risk of losing any product or materials in the events of an asset failure. These are just a few of the ongoing initiatives which we will support our continued improvements, which is integral to the current year. Moving forward to the outlook. We anticipate a modest growth in our underlying revenue as we look to build for the future. I want to stress that this is a conservative outlook to reflect the headwinds of increased price competition and the protracted sales cycle, which means that investments in the sales team now are not expected to be realized until around Q4 and beyond. The growth in this chart is primarily through existing client growth, also includes some new customer acquisitions that we expect to see in this year and grow in the following years. We predict that our gross margin will be maintained at its high level despite increases in raw material costs and the upward pressure on wages. We're able to maintain this due to the ongoing improvement work, which we've already seen deliver an increase in productivity and the reduction in scrap costs in the current year. Our total cash and deposits at the end of FY '25 are expected to vary minimally from FY '24. And it's important to note here that this factors in a significant investment relating to improving our printing technology in conjunction with our IVDR work. This is modeled to be entirely funded through cash as we reinvest the profits of the business in building for the future. As you may also be aware, we're currently having to ring-fence some of our capital due to an ongoing dispute with the DHSC. This is still under dispute. And following legal advice, we do not consider that we are required to repay the GBP 2.5 million preproduction payments. We are also considering making claims against DHSC for additional losses that we have suffered as a result of DHSC's conduct pursuant to the contract. We are continuing to explore ways to resolve this swiftly without the need for legal proceedings. As discussions are ongoing, I'm afraid we're unable to expand on this any further due to the confidentiality arrangements. I'll now pass back to Jag to take us through the future growth strategy.

Thank you, James. 2 years ago, we were a business that had to rapidly restructure and stabilize. And for those who have followed us over that period of time, that was a really important focus for turnaround of the company. We then had to stabilize. We had to improve some of our production processes and work really hard to stand alone as a business on our own 2 feet centered around our business based in Ely, Cambridgeshire. But what we've done now is really build a foundation for future growth. And what I'd like to do is take a bit of time to show you what that future growth strategy looks like. And really the way we're going to grow is through 3 key areas that are going to be harnessed together to take this company forward. As James said, the growth from existing business and existing markets is key to us. As a global leader, we operate in a very dynamic market. It recognizes the role of gut health in inflammatory chronic disease. And wherever you go, personalized nutrition is now increasingly becoming central and at the frontier of health care and wellness going forward. We live in a world of aging populations and chronic inflammatory disease. And as a leader in gut health testing, we are well placed to capitalize on the increased demand for testing as people want to maintain and improve their wellness and actually stay out of tertiary care and hospitals. And we'll maintain our leadership position through scientific education programs and building that awareness with our customers who are health care professionals. And that's going to drive the awareness and the utility of such tests going forward as they increasingly become mainstream and essential for improving gut health for patients. What's going to link all that together is a digital technology, app-based technology that will better connect our customers with their patients and get better patient outcomes as a result. And we want to really, increasingly address that health care consumer based on digital technologies and e-marketing and digital marketing and drive that awareness, not only with the health care professional but also potentially in the future with the consumer. And something we've been working hard on for our laboratory customers is actually rolling out automated solutions for them processing their tests in their labs. And laboratories where the bulk of the costs or labor costs, this provides our -- particularly our high-throughput lab customers, automated solutions that allow them to be more productive and more efficient in their laboratory operations. In terms of geographic opportunities, we want to build on what we're good at. And we're good at getting products registered and exported to international markets. We're already working on channel optimization in international markets, and we've particularly identified areas in the EU, where we believe there is good opportunity for growth and that's where we're making some investments in sales and marketing efforts to drive those partnerships and exploit those markets even more. We've talked about the U.S. in the past as well. We need to build our knowledge of the U.S. market in terms of regulatory approval and ensure that we work with those timeframes. And what we're doing there as well is investing in U.S.-based sales resource to capitalize on what is generally recognized as the largest health care and diagnostic market in the world. And we're nothing without our people. We wouldn't be in this position of turning around the company without our staff and employees in the business. And we want to further increase our knowledge capital and skills within the business to enable to drive that forward and that will be done through smart recruitment, getting experienced and well-trained people into the business and people like James who can drive the business forward. We've already established a very strong leadership team that's been personally very helpful to me to drive the business forward in all functions and operations in the business. We're also upgrading our business systems. We've talked about a new quality management system or an eQMS system as well, but we're also bringing online a new CRM system to enable us to be a lot smarter in sales and marketing and a bit more targeted in our activities to drive our business and drive our growth in the forthcoming years. And as James highlighted as well, we're really developing now a culture within the business of continuous improvement. Looking for those incremental opportunities for taking out waste in the organization, improving our efficiency and improving our productivity, which will lead to reduction in overhead costs and improved gross margins going forward. I'll talk a little bit about our approach to our digital strategy, which is really key for us going forward. Increasingly, our patients and health care professionals want their results in digital format and be able to interact with each other as they go on that journey of improvement of health and towards better wellness. In built within this is patient guidance and help to allow the patients also themselves to be more empowered and drive their own health going forward. But equally, it gives us a much better understanding of our market, of our customers and more importantly of our patients and really understand scientifically how these patients are managing their health and what symptoms are being corrected and improved through the use of diagnostic tests and ongoing treatment and management. And that's really, really important scientifically to give further credibility and evidence to the testing that we provide around the world. We launched the app back in March 2023 as an initial limited rollout, but I'm really pleased to announce that over the financial year 2024, we fully rolled that out in the U.K. And now all of our U.K. account customers are using the app. And the feedback around this has been extremely positive, not only in this utility by our health care professionals but also ultimately the patients as well. We'll continue to roll that out in other markets, and we're looking initially at those markets that are English-speaking, so an English language app can be rolled out more swiftly. And we're also looking to invest and develop its functionality for it to be a lot more key to that patient practitioner relationship going forward. But the benefits to the business can't be understated. It's a unique offering in the marketplace that we serve today and really helps to retain our customers. We have a high customer retention anyway, but we do recognize that there is increased competition in this area. We're not the only ones to recognize that gut health and gut health diagnostics is a good market to be in. But as a leader in the marketplace, we always need to stay ahead of the curve and provide bigger barriers to entry to the competition. And we've already demonstrated with the use of the digital platform and app-based system that we're able to retain our customers even more. And we want to do that with our laboratory partners around the world. But by also having an app through that journey that a patient goes on, it also increases the opportunities for increased testing. We can do repeat testing as a patient goes through that journey, and we have the opportunity to cross-sell other tests and menu opportunities to that same patient or to that health care professional as they go through that journey. There's a much better user experience, and that's really, really key when we are dealing with the consumer health care market. And once we understand the market so much better, and I often say that this digital platform is our Tesco Clubcard, we can tell what tests will be running where, why those tests have been ordered, what symptoms have been presented for those tests to be ordered. Once we understand our markets so much better through the data we have, we then have the opportunity to go a little bit more direct in key markets. And that could be straight to a laboratory customer, straight to the health care professional and possibly even in the future straight to the health care consumer. So, in summary, what we've been doing over the past year in financial year 2024 is building a solid foundation for the future and for future growth. We have high customer retention despite some increased competition, but with the app and with the automation offering that we provide to our laboratory partners, we've taken that further away from the competition. Key for future success is our people, and that starts with our senior leadership team that I'm very proud of that has helped deliver the result over the past year, and we'll continue to deliver good results going forward. We've been investing in business systems to enable us to be more productive, more efficient and understand our business so much better. And again, through our people, we're able to build the knowledge capital through recruiting the right people as well as developing the people within the business. And from a solid foundation now, and I've been wanting to do this for such a long time is we can really now expand and invest in our sales and marketing operations regionally. We'll look at the EU, we'll also look at the U.S. specifically, where there is potential to grow in the future. Sales cycles tend to be -- in our business tend to be reasonably long. They don't happen overnight. So the investment in sales and marketing will give us not an immediate impact, but certainly significant growth potential in the midterm. So lastly, and after the last slide we go to Q&A. We're really building for the future. We've come out of 2 years of tremendous change and reorganization and restructuring. We have now a business that's well capitalized with money under its belt with a strong balance sheet for our future. We will further develop our production capability and invest in new technology and plants that will further improve our base and our foundation and further improve our productivity and efficiency going forward. We are a global leader in the area of food sensitivity testing, and we want to expand on that and further grow in the personalized nutrition segment. And we will all differentiate from the competition but more importantly, add value to our relationships with our customers in the market through science and education. And from that foundation, we can truly grow. We can focus on those key markets, as I said, in the EU and in the U.S. And we can really capitalize on what is an exciting area. There's increasing consumer demand for personalized nutrition testing, and we very much sit at the heart of that in over 75 countries globally. And we can differentiate ourselves and connect more closely with our customers with our app-based digital system that will evolve over time and further add value to that relationship with our customers and the marketplace. So that concludes the formal part of the presentation. And I think now we'll switch over to the Q&A session.

Perfect, James. Thank you very much for your presentation. I'll just bring your camera back up at this point. [Operator Instructions]. But just while the company takes a few minutes to review the questions that have been submitted today, I'd like to remind you that a recording of the presentation along with a copy of the slides under published Q&A can be accessed via your Investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And Charlotte, at this point, if I could just hand over to you to chair the Q&A, that would be great, and then I'll pick up from you at the end.

Thank you. Yes, sure. Thanks, Jag, and thanks, James. Got a few questions on a common theme here. I don't think there's much more you can say on the DHSC dispute other than what was in the presentation. But the question is around, are you expecting a payout? Are there any time lines around court cases? And you've spoken about hopefully not taking any legal proceedings any time at all on this. Is there any other color that you can provide?

Yes. And I'm sure that's a question on many people's minds. I can't say too much more. We are, as we've always said, confident of not having to repay the GBP 2.5 million, which is a prepayment towards the supply of COVID tests. We've been taking advice, legal advice. But in the background, we've been working very hard to work with the Department of Health. It's not been a quick process. We appreciate that. I can't really put timelines on it when you're dealing with a large government department. Who knows, with the new government maybe things will start to unlock and move forward. But we're working very hard in the background to really ensure that we've got something agreed where the GBP 2.5 million liability drops away. But there's not too much more I can say on that. When we do have news, we will obviously update the market as and when that happens.

Great. Thanks, Jag. Another question coming up is around the U.S., and you've already touched on some of that, but someone has asked around how do you expect the U.S. market will grow. Or what are the opportunities there? And you've touched on that. What is your strategy in that market going forward? Again, I think you've covered most of it but maybe…

Yes, I'm happy to because we have trailed the U.S. opportunity for a number of years. It's a market we really want to be in. It's the single largest market, we believe, for food sensitivity testing. It's a very big consumer health care market as well. That is increasingly focusing on the role of nutrition and gut health. But you can't do that without having boots on the ground in the U.S. We've tried to do it from across the pond. But now again, as I said, we've got a solid, stable platform with cash in the bank and under our belt that we can now invest in personnel in the U.S. to help identify those opportunities. And those opportunities would be target labs who wish to use our technology and provide food sensitivity testing into that U.S. marketplace. So that's what we're aiming to do. As I said, like with the EU as well, sales cycles tend to be a little bit longer. So I didn't want to raise expectations too much. There are areas of validation and approvals to get as well as increasing the range of prospects that we have in the marketplace. But by investing in them, having people on the ground, that's going to drive that business forward over the midterm.

Great. And just one more specific question on U.S. revenues currently. Someone noted that the -- there's a GBP 1.9 million of revenue from North America. Is that -- is the majority of that from Canada? They're reading into it that there's GBP 1.6 million from -- potentially from Canada and the rest is GBP 0.3 million, so GBP 0.3 million is quite small currently.

So we group North America together. We don't tend to highlight revenues country by country because I don't want to point the competition to where they should set up and pitch against us basically. So we have good business in Canada. We do have some customers, laboratories in the U.S., and we highlighted in the RNS that we've got a new customer that's gone live with our FoodPrint system in the U.S. marketplace, and that will grow going forward.

Great. Thank you. A question now on cash deposits. Again, I don't think there's much more you can say than what's in the presentation, but what is the interest rate and notice terms on your cash deposit?

Okay. Can't comment too much on the interest rate, but I've done enough talking. I can hand over to James to talk about that cash deposit.

Yes. The cash deposit, as we said in the presentation, is 3 months or less on the withdrawal of that. We thought it was prudent rather than leaving it in a low or possibly very, very low interest account. We thought we'd actually put it to work for us, and it just becomes a nice, passive income stream.

Right. When does the company expect to make a trading profit beyond that of EBITDA, namely net profit? Is this possible in the current financial year?

So we've got figures out for the current financial year provided by Cavendish, so I'll defer you to that. We are generating cash. We do want to still invest in the business going forward. So it's a careful balance of, yes, we're becoming profitable, but making sure that we are investing in our future to drive those growth revenues in future years as well. So we're being conservative in our outlook. I think in the past, I'm sure many people would agree that we've been guilty of overpromising and underdelivering. I'd rather put it the other way around where then the market then appreciates and builds a bit of trust in our future forecast going forward.

Okay. Does the company intend to promote itself more widely in the city given recent excellent performance? The market valuation is very much below peers. I believe this is due to investor ignorance and being below radar.

I think it's a great question. And yes is the answer. I'd love to get in front of more people and meet more people. Sometimes you can't be pressing the flesh. So we will be trying to look at the opportunities to talk about what is a great growth story. It's a great company. I'm passionate about the role of personalized nutrition, and I just want to get that across to more people. But we are absolutely undervalued. And I think if we can get that story out and get more people interested and get them buying shares in the marketplace, that will only drive the share price in the right way.

Can you advise what the latest is regarding the move from your current head office?

Yes, that's a really good question. So in the past, we talked about a new building and a new construction. I think when I last presented, we walked away from that building because it was not up to the right specification for our needs as a medical device manufacturer. What we've done to date with the productivity and efficiency and then particularly with James' work in and around that is we have plenty of capacity for significant growth in our current premises. So we're just taking a watching brief as to what we need to do and what we need for future. So we don't want to rush into getting a new building and then moving and all the disruption that causes. We have capacity in our current building. And I'll just hand over to James because he can talk about some of the stuff we're doing in terms of instrumentation that will also help us with capacity in our current premises.

Yes. So as I highlighted a couple of the key investments we've made recently with the flow wrapper and the in-line labeling piece. These not only improved our productivity to reduce in that resource required, but they did also reduce amount of time things take. So we took something that we used to take 3 days, it now only takes 1 day, right? So this really increased the capacity in the existing facility. Similarly, with our microgrid machines, we've been doing lots of work there. And we estimate we've got a good bit of headroom there. So I'm not holding back the sales team at all on that front, I'm encouraging them to go out and make the most of it.

Great. Thank you. Turning to thought leadership at conferences and webinars, who are the people providing the thought leadership? And also in terms of the product portfolio, who's providing thought leadership around how the product portfolio should be developed?

That's also a great question. So we have, first of all, internally a lot of knowledge and expertise to do that. We have a scientific director. We have our marketing directors, very knowledgeable and actually qualified nutritionist. And then actually we have employed nutritionists as well who do that. But more importantly, we have lots of external speakers. So we have webinars and conferences where we will have speakers talking on our behalf, particularly in clinical practice as how they've used the test in a particular condition or a particular disease area as well. And when our annual report is published, you'd actually see a real-life example of a U.K. practitioner, we've given her the award of Practitioner of the Year award. But she has demonstrated the utility of our test and how it's improved actually not only her practice but also the patient outcomes as well. And we do that around the world. So we'll have a key opinion leader in India being able to give talks and seminars at conferences, both in India and more recently in the Middle East. We want to do more of that. And ideally, I'd love to have in the future a kind of key opinion leader board that guides our product development and menu expansion going forward here. But that's something further down the line.

Great. Thank you. I'm not quite sure of the genesis of this question, but has the company been approached regarding a takeover? And do you have to say anything on that…

Yes, look, if we ever had a formal approach, that would be an RNS. So the first, you would hear about it first through the RNS.

Okay. Turning to MyHealthTracker. Is it developed in-house or by a subcontractor? How easy is it to incorporate changes in knowledge about gut health?

So it's developed by an external company because we are not an app developer, we've subcontracted to people who know what they're doing in that area. And not just in terms of app development, but also cybersecurity, data protection and all the things you need around health care data. It's relatively easy to add functionality to that. But we want to make sure what we do is add functionality in an order of priority. So what are customers wanting first and foremost, and we'll roll that out accordingly.

Great. And looking sort of bigger picture, what is the size of the current market opportunity and what market share is CNS targeting over the medium term?

Yes, good question. There aren't really any external data reports on market size. We know our competition quite well, and it will vary country to country depending on who we're up against. So it's difficult to say market share and what percentage market share that we have, but what we do know is the market itself and the boundaries of that market can grow. And that growth of that boundary of that market, what I call the total available market is grown through greater awareness of the utility of this testing in health care. And that's what we aim to do through our scientific approach and our education and grow the total pot available that we can then address.

All right. Thank you, Jag. This should be our last question unless anything else comes in. Where do you see the company regarding growth in 24 months' time?

Okay. That's a great question. Obviously, as I said, we've got numbers out there for the next or this current financial year FY '25 by the year ending 31 March 2025. It's hard to predict. We do want to grow, and I think we will grow. We don't want to put numbers out there or put numbers out there that we disappoint people. We want to be conservative and prudent in what we do and make sure we hit those numbers and build an element of trust in the marketplace that when we do put numbers out, we hit them and hopefully exceed them as well. But I'm sure everyone online can appreciate that this is a very exciting market that we sit in, in terms of gut health and nutrition. It's in the news and social media, it's on TV all the time. So for us to enable us to capitalize on that opportunity, we've now got a solid foundation, and we want to really grow in that market. But we want to be prudent in our external forecast. We don't want to over-promise and under-deliver.

Right. Thank you. I have actually a couple more that ped in. Something just disappeared, sorry. And what are you doing to drive a positive growth in share price?

All of what we just talked about, really, investor communications, but ultimately results and hitting and beating our forecast in the marketplace. And only until we have a track record of that will we truly drive our share price onwards and upwards as well.

All right. There was a question, and I can't quite see it now, but it was on microbiome, what's the update?

Okay, yes. So we talked about microbiome in the past. Microbiome itself is a fast-evolving and changing area, both scientifically and technologically as well. So we've just taken just a step back a little bit to really better understand what should our product offering be in the microbiome area. We need better market feedback with our key opinion leaders, with our health care professionals before we look at what sort of products we bring to the marketplace. So we're just taking a little bit of a watching brief on that, understanding what the market requires that there's a lot of microbiome providers out there, how do we differentiate that and how we -- how can we actually truly add value alongside our existing food sensitivity products to enable us to be successful in that area.

Question, when do you expect to be IVDR-compliant?

I've done enough talking. I'll hand that over to James.

Well, as some of you may know, so that currently, at least, the backstop of this is the end of 2029, well or maybe that's already been pushed back a couple of times. This is something which our development team are currently working on and some of the CapEx that we put in the budget for the coming year is very much related to the project to become IVDR compliant. So I can't give total details on time line at the moment, but I can say that we're working on it. It is a reasonably lengthy time line because of the nature of the way how we have to involve the notified bodies. And the processing time for them and the sort of the queue in front of them is quite large. So that [indiscernible] it takes at least between 12 to 18 months once you have a product ready to submit to them. So we're expecting that to come clearer to us over the coming year. And we will of course provide an update when we have something a bit more concrete.

Great. Thank you. Now I think this is really the final question. I understand, and again, I think you covered it, but I understand the need for conservative numbers, but when can we expect Cavendish to issue financial year '26 numbers? And again, it might be a question for Cavendish.

Yes. We do want to get numbers further out in terms of time lines. When we're confident of what those numbers look like and only when we're confident of what those numbers look like, that those numbers will be issued out. But we do -- we absolutely do want to give further guidance further out. But again, we want to be more confident on what we can deliver.

One last question has come in, and then I think we'll hand back to Alessandro. Is there scope for collaboration with gut health solution providers?

Possibly. They range from testing companies, supplement companies, probiotic/prebiotic companies. So there's a whole plethora of companies in this area. But let's just -- let's get our solid foundation right, growing what we do well, but we're always talking to other companies where there's areas for collaboration. And sometimes we do that in different markets, we may work on a pharmacy chain or a supplement chain in certain countries where it makes sense to drive both our business and a potential partner's business going forward.

Great. Thanks. I think we'll leave it there. Thanks, Jag and James. I'll pass it back over to Alessandro.

Perfect. Charlotte, Jag, James. Thank you very much for being so generous with your time and answering so many questions there. Of course, the company can't review all the questions submitted today, and we'll publish responses on the Investor Meet Company company platform. But just before redirecting investors to provide you with their feedback, which you know is particularly important to the company, Jag, I just ask you for a few closing comments.

Thank you, Alessandro. First of all, thank you for everyone online for listening to our presentation and some really good questions as well. Thank you so much. In summary, as I said before, 2 years ago, we went through a major restructuring exercise of the organization. We refocused the company into one exciting area that has huge potential. We have to roll our sleeves up and work through some production challenges. But we've come out of the other side. And I just actually want to take this opportunity to thank our staff and employees because it's without them and their hard work and dedication that we've turned this company around. We've still got more work to do. There's more gains to be had. But now we really do believe we've got a foundation on which we can build on for future growth. We're well capitalized. We have cash in the bank to execute on our strategy. We now are investing in those growth opportunities, which will come in the midterm. And we operate in a really exciting area that we are all passionate about. So thank you for your attention this afternoon.

Perfect. And thank you once again for updating investors today. Could I please ask investors not to close this session, as you now will be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete, which I'm sure will be greatly valued by the company. On behalf of the management team of Cambridge Nutritional Sciences plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.