Monash IVF Group Limited (MIS.F) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Monash IVF Group Half Year Results 2022 Conference Call. [Operator Instructions] I would now like to hand the conference over to Mr. Michael Knaap, CEO. Please go ahead.

Thank you, Matt, and good morning, and thank you all for joining us for our group's results presentation for the first half of FY '22. Our CFO, Malik Jainudeen, also joins me and will be later stepping us through the details of our financials. By way of background, Monash IVF is a market leader in providing reproductive care in our core assisted reproductive services, diagnostics, genetics and pathology services with a growing network of 48 IVF and women's ultrasound clinics and service centers across Australia and expanding in Southeast Asia. Our experienced and capable team includes 132 doctors and in excess of 600 scientific nursing and support staff. I would again like to take this opportunity to thank every one of our team for their unrelenting patient-first mindset and continued agility in order to thrive during the pandemic. This focus and effort of our people is the reason we are delivering another positive result today and continue to have an optimistic outlook for the future. I'd now like to touch on the key points of our first half in financial year 2022, which are represented on Slide 3 of the presentation. Our underlying profits were ahead of guidance, underpinned by market share gains and record ARS industry growth on the back of really strong comparisons in the previous corresponding period. One might say the IVF baby boom continues. Our adjusted or underlying NPAT of $13.4 million, increased by 11.7% on the pcp and was well ahead of our profit guidance provided at our AGM. There was continued IVF industry volume growth of 3.6% for the first half in '22 on the back of 28.3% growth in the previous corresponding period, highlighting the sustainability of the all-time high industry volumes. Pleasingly, in Australia, we grew our stimulated cycles by 6.6%, outstripping the market growth and gaining further market share of 0.7%. We also had a buoyant new patient pipeline demonstrated by 11% growth in our Australian new patient registrations in the first half of '22, which will support growth in the second half of this financial year. We have expanded our fertility specialists with 4 new fertility specialists attracted during the first half of FY '22 in Australia and another 4 experienced fertility specialists in Singapore. The specialists in Singapore will support the commencement of a new Singapore IVF clinic in the second half of this financial year, whereby we anticipate in excess of 200 stimulated cycles in Year 1 given the caliber of the specialists we have recruited. Our balance sheet strength is a strong enabler to drive organic and nonorganic strategic growth in the future, whilst we also increased our dividend to $0.022 per share and improved all of our capital return metrics. I wanted to touch on the continued attractive industry fundamentals as behavioral shifts support volume growth into the future as we look at Slide 4. It continues to be an advancement in maternal age as a long-term trend as people have delayed starting a family, which continues to increase infertility rates. Although there has been significant increase in IVF demand, average maternal age of 37 has remained constant since the start of the pandemic, which underlines continued growth in the industry. We believe the ongoing pandemic has changed the mindset in the community with greater focus on family, health and well-being. This continues to drive a redirection of priorities towards creating and extending their families into the future. To support that, we had a 9% increase in new patients having stimulated cycles following a 40% increase in the previous corresponding period, which is well above historical industry growth. Growth in our service offerings and advances in technology is driving improved outcomes and appeal to the fertility value proposition. There's good growth potential in donor, social patient treatments and genetic services into the future. Our significant recent improvement of 4.6% in the clinical pregnancy rate over the last 3 years is a testament to the improved value proposition for patients. There was an increase in government support from the first of November 2021 for patients who are carriers of known genetic disorders, and we anticipated further funding of broader genetic testing services in the near future. These increases along with the current stable government funding regime for both IVF and ultrasound services will support volume growth, and patient affordability into the future. As we now take a look at Slide 5 to focus on the broader ARS Australian market, where demand for services in Australia continues at record highs. The left-hand graph, which reflects the quarterly growth in stimulated cycles shows that there was significant growth experienced in the quarter 1 and quarter 2 in FY '21, as industry volumes rose rapidly. In the first half of this financial year, we matched those high comps from the pcp, which grew by 23.8%, whilst also growing by 3.6%, demonstrating the sustainability of the all-time high treatment numbers. The right-hand graph which is the number of Australian cycles per year -- if you would note the step change in volume in calendar year '20 with the growth and industry momentum continuing into calendar year '21, which delivered a growth rate of 18.6%. Given the industry dynamics previously outlined, our view is that the new industry baseline for stimulated cycles has been set and growth can continue into the future at 2% to 3%. Having a clear picture of the Australian IVF volumes, I would just like to cover off on more details around our market share on Slide 6. In our key markets, our stimulated cycles increased by 6.6% versus industry growth of 3.6%. We effectively doubled the industry growth rate. This led to market share gains of 0.7%, achieving 20.8% market share. The key contributing factors to our market share gains include the creative marketing campaigns and substantial marketing investment that is continuing to grow our -- both our short-term and long-term patient pipeline. Fertility specialists that we managed to recruit in the last 12 months are all developing their referral and patient base. We've had incremental contribution from our new Sydney CBD flagship clinic in New South Wales that continues to build good momentum. Furthermore, our set market share increased by 1.6% versus the previous corresponding period with 19.9% market share. This demonstrates the strong returning patient pipeline. I would now like to welcome our CFO, Malik Jainudeen to take us through the financial results for the year.

Thanks, Michael, and thank you, everyone, for attending the call today. Turning over to Slide 8. I've illustrated our buildup of revenue compared to last year, which reflects an 11% increase in our revenue. If you look at -- if you follow the bubbles from left to right, you'll see that from the pure market size growth in the market contributed an extra 2% of revenue of $2.1 million. The next bubble illustrates how pleased we are with our market share growth in the 6 months, which added a further $2.1 million or 2% of revenue, which reflects the 0.7% market share growth, Michael mentioned. There was further growth from pricing where our average pricing increased by 4.4%, reflecting our year-on-year price increase of 2% to 3% across all our domestic markets. We also achieved further pricing benefit from a lower number of discounted cycles, particularly the patients that were impacted by the Ni-PGT program. Following this outcome, we're extremely confident that we can continue to put our prices up going into FY '23. Our international clinic revenue declined by $0.5 million, which was on the back of a 15% improvement in revenue in the second quarter following a fairly weak first quarter. Ultrasound business revenue were largely maintained. But as I'll call out on the next slide, we've had substantial challenges in the cost base given the current environment. We've had good contribution from our growing day surgery income as the Sydney CBD day-surgery activity continues to build. Just closing on this particular slide, you notice that we've received $1.8 million of insurance income related to the Ni-PGT program, which offset approximately $1 million of costs in the first half. Turning on to Slide 9, our adjusted NPAT was $13.4 million, which was up by almost 12% on last year. So on the back of the 11% increase in revenue, our adjusted EBITDA grew by 9%, which was driven by the strength of our domestic IVF businesses. Considering how well our IVF business has fared during the first half, the result could have been stronger considering the weakness in the international business and the Ultrasound business. Our Ultrasound business is heavily impacted by health and safety measures, which had a direct impact on utilization of our sonographers, our rooms and our machines. In addition, across our group, we've incurred an additional $700,000 of employee leave balances due to lower leave taken and a $400,000 increase in sick leave. This obviously has a direct impact on profitability, but what's clear is that it is a short-term impact. And once the environment stabilizes, we should expect to see further profit growth. And we also called out a $1 million increase in our insurance, which is directly and inherently attributable to the current proceedings on Monash IVF. I think overall, from a profitability perspective, we're extremely pleased with the results given the strength of our core domestic IVF businesses which could withstand the short-term pressures presented by the pandemic. Moving to Slide 10, illustrating our cash flows. As I say over a year -- over 6 months, this business continues to build a huge amount of strong cash flow, with conversion of EBITDA to pretax cash flows at 83%, which is consistent with last year and is expected to be close to 100% by June. Free cash flow generated was $9.7 million, up 52% once adjusted for Job Keeper receipt -- received last year. CapEx for the period was $3.6 million, which was focused on growth assets providing greater capacity in our labs and commencement of [indiscernible] clinic in Melbourne. CapEx for the second half is expected to be around $10 million to $15 million, considering, as I mentioned, the exciting project in Melbourne, relocation of our Darwin and Penrith clinics and a further exciting project in the Gold Coast, including the day hospital. Some of this spend may fall into next year, but the overall spend for these 4 projects including our regular CapEx program will be about $10 million to $15 million. Slide 11, just illustrates our balance sheet, and it's obviously in a very strong position considering it's in a cash positive position in the group as well and in a great position to execute on both organic and nonorganic opportunities that are in the pipeline. Also to note, we've refinanced our Syndicated Debt Facility just prior to Christmas for a further 3 years, which just provides comfort with over $40 million of cash flow available and a further $40 million in accordion facility for particular growth projects and purposes. I'll pass you back to Michael.

Thank you, Malik. Now I'd like to take a look at Slide 13, as we start to work through some of the details of our Australian ARS operational performance, commencing with scientific leadership. We have a continued unrelenting focus on investing and building scientific capability to ensure we are giving our patients the best possible outcomes in differentiating our value proposition to patients and to doctors for that matter. Chart at the bottom of this slide represents the continuous improvement in our clinical pregnancy rates across the group with clinical pregnancy rates in calendar year 2021 increasing by a very significant 4.6% as compared to calendar year 2018. I know it is the second time I've said that, but it is such a great achievement, and it's worthwhile emphasizing. We've been on this journey of continuous improvement throughout our long heritage. The Monash Way as developed by our Group Scientific Advisory Committee, is now well established across our group and has been a critical driver of improved success rates. It is worthwhile calling out some of the initiatives that will drive further improvements to our success rates into the future. We will continue to partner innovative organizations to advance new technologies such as the safer and softer [ method of exit ] that is demonstrating improved fertility rates, therefore, creating more embryos for our patients. Another new technology we are working on in partnership with Memphasys is to develop a more effective sperm selection process, utilizing the Felix device, and we are about to commence a multi-site clinical trial. Furthermore, we continue to roll out Embryoscope technology across our clinical network, which results in less embryo touch points during the development stage of the embryo. Partnerships in technologies backed up by our ongoing research focus through our various research bodies would ensure we continue to evolve and improve our success rates. We turn to Slide 14 on an essential pillar of our strategy being doctor partnerships. We continue to strive to have mutually rewarding partnerships with all of our doctors in the transparent collaborative and supportive way as we strive for high doctor engagement and building an adaptive value proposition. The recruitment of doctors is a testament to this, whereby 4 new fertility specialists joined Monash IVF so far this financial year, which will deliver future growth and support succession planning. As a result of these recruitments and the successful recruitment and onboarding of doctors in recent times, we have added 15 additional fertility specialists in the last 2 years. We will continue to maintain this momentum, and our focus remains on attracting and onboarding new and experienced fertility specialists with outstanding clinical competencies, industry reputation, and that are a strong cultural fit. You also see the genetics facility as a key driver of growth. And with that, we have continued to build our capabilities as we have onboarded 4 new clinical geneticists building and supporting our genetics offering and capabilities. As we now take a look at critical infrastructure progress and our plans as outlined on Slide 15, strategic priority of clinic infrastructure continues to be a focus on the medium-term horizon as our clinics are paramount to execution of our strategic growth objectives. The transformation of our Melbourne footprint is well advanced, and with a new large-scale fertility clinic and a day hospital expected to open in Cremorne coming located in the Inner East of Melbourne. The opening is planned to be early FY '23. This will consolidate 4 existing locations, introduce a new day hospital revenue stream and provide an exceptional patient, doctor and employee experience. We're also undertaking clinic relocations and significant upgrades in the Gold Coast, Penrith in New South Wales and Darwin towards the end of FY '22 and early in FY '23. The Gold Coast clinic will be complemented with a new day hospital building an additional revenue stream, thus also improving the patient experience. If you move on to Slide 16, our substantial strategic marketing investment is a key driver of our market share gains and driving growth in our future patient pipeline. Our strong new patient metrics are a testament to this. Our innovative marketing campaigns, such as the 1 in 6 advertising campaign have continued to build awareness for Monash IVF. And the new Monash IVF brand identity has been acknowledged with 2 health care industry design awards. Our people's positive engagement remains a key priority, and we are focused on continuing to achieve a culture of success throughout the Monash IVF with -- for our doctors and for our employee teams. Initiatives such as establishing a diversity and inclusion council and building a learning and development framework contributes to building a high-performing accountable, fun, safe and inclusive workplace that everyone will thrive in. As we turn to our diagnostic ultrasound performance on Slide 17, which has been impacted by COVID in Sydney and Melbourne in particular, our first half '22 ultrasound volumes declined by 4.2% versus the pcp and our noninvasive prenatal testing declined by 2.1% versus the pcp. Furthermore, the implications of the lockdowns and penetration of COVID cases have impacted efficiencies, workforce flexibility and patient willingness to enter a clinical setting. These factors have reduced patient demand and our margins. We anticipate that as we now come into a more stable COVID normal in 2022, the demand will stabilize and the efficient work practices will and are returning during the second half of FY '22. Following the significant increase in demand for reproductive carrier screening services, we launched Monash IVF branded Reproductive Carrier Screening test kit, allowing couples to identify potential genetic conditions in a child prior to conception. The RCS test is now available online on our website and in our clinics, and this will be a new channel for stimulated cycle growth that is unrelated to fertility. So if you are considering children, please take a look at the Monash IVF website and learn about why you should consider genetic carrier screening and look at the simplicity of our at-home saliva test. Touching on the group proceedings against Monash IVF as previously announced, we have launched our defense in June 2021 against the alleged claims and we are now in the discovery phase. Furthermore, the matter specific to the claims made are indemnified by insurers. As we move forward to our ARS International operational performance on Slide 18, our Southeast Asian expansion strategy is progressing despite continued COVID-19 challenges. Our KL Fertility Clinic was impacted by movement control orders and difficult macroeconomic conditions, particularly in the first quarter of FY '22. However, it was extremely pleasing that the second quarter of FY '22 went back into a revenue and volume growth of 15% following a decline of 30% in the first quarter. The net impact was that our international stimulated cycles for the first half declined by 19.4%. As a result of that volume decline, we had a 33% decline in EBIT for the first half. Furthermore, it was really encouraging that our new patient consultations achieved a 29% growth in the second quarter versus the previous corresponding period, which provides a solid platform for the second half in this financial year. As I advised earlier, we are pleased to announce that we are opening a new Singapore IVF clinic, which will commence operations in the fourth quarter of this financial year. Our ability to attract 4 experienced fertility specialists in the Singapore market will contribute to a 200-plus stimulated-cycle clinic in Year 1 and will be instantly profitable after a short ramp-up period. We're also in the process of constructing a new fertility clinic in Bali, Indonesia, that we anticipate will be operational towards the end of this financial year. These new clinics will complement our recent IVF clinic expansion in Johor Bahru, Malaysia; and Jakarta, Indonesia, bringing the total Southeast Asian clinics to 5 when they are complete. Given our presence in the Southeast Asian region and recent progress on expansion, we are well placed to execute on acquisition and partnership opportunities, which continue to evolve and present in the Southeast Asian region. I take you to our Vision 2026 strategic road map on Slide 20. Vision 2026 continues to remain consistent in regards to our objectives and aspirations. We have made significant progress on our strategic pillars, as outlined on previous slides. And with this platform established, we will continually evolve and improve in order to deliver our Vision 2026 objectives. Our Vision 2026 strategic road map will continue to enable everyone to understand our priorities, actions and decisions required to achieve success and deliver profitable growth in the oncoming years. As demonstrated through the previous 18 months progress, we have strong momentum on our strategic growth initiatives, and these will continue to become more transparent over time. As we move on to the all-important outlook statement for FY '22 and beyond, which is on Slide 21, although the COVID-19 pandemic continues to evolve and present challenges, there remains a fundamental shift in the community, whereby the mindset of our patient cohort continues to focus on family, health and wellbeing resulting in prioritization of family creation and extension. This sustainable shift has driven strong industry growth since June 2020 and is expected to be maintained in this financial year. I would like to emphasize our key initiatives that will support future growth. Attraction of new fertility specialists in the last 12 months will drive volume growth in the second half of FY '22, and we are well placed to attract additional experienced fertility specialists. We are opening new IVF clinics in the latter part of FY '22 and early FY '23, including new projects that are well advanced in Melbourne, Gold Coast, Brisbane, Darwin and Penrith. We had an 11% increase in domestic new patient registrations and we have a strong returning patient pipeline. We will continue to invest in marketing that is expected to continue to grow the new patient pipeline. We are expanding our genetics capability and service offerings such as the newly commercialized reproductive genetic screening kits. We will continuously improve our pregnancy rates and patient experience. We are focused on the recovery of our ultrasound business and the international IVF clinics, following the COVID-19-related weaknesses in the first half of FY '22. We plan to identify and execute on nonorganic growth opportunities in Australia and abroad. And we will continue our expansion into Southeast Asia, including a new Singapore clinic and a new clinic in Bali. Given the impact of the Victorian elective surgery suspension in January 2022, and the general Omicron surge across Australian Eastern states, our financial performance in January 2022 has been adversely impacted in both the IVF and ultrasound businesses. Notwithstanding this and subject to any further adverse impacts from the ongoing pandemic, we remain confident revenue and earnings before non-regular items can continue to grow in the second half of FY '22. That concludes the formal part of the presentation, and Malik and I are happy to take questions.

[Operator Instructions] Your first question comes from Jonathon Higgins from Shaw and Partners.

Look great for the results, particularly also enjoyed the part on the new products and marketing for all the analysts on the line. Just a couple for me. Just firstly, just around the combined impact of the Malaysian or sort of the Southeast Asian impacts as well as the ultrasound, are you able to give us a view of sort of what the combined sort of headwind on EBIT or EBITDA was in the first half in both of those business units that are the ones underperforming?

Yes, John, I'll take that question. I think the KL business we illustrated in one of our slides on our international slide, it was about $0.5 million on the bottom line. In terms of our Ultrasound business, we don't call it out separately from a segment point of view at least. But revenue was flat, but clearly, the cost base was heavily impacted. That cost base is around $700,000 more than we would expect, and for those reasons that I called out on.

Okay. I understand sort of those 2 things driving into there. Just a couple more. Just -- so on the Southeast Asia business, I mean, Mike, it looks like we're going to see improvements, particularly obviously, in FY '23, hopefully through the back end of the second half of '22. I mean just -- if you could just remind us when that business was pre-COVID just sort of where the cycle set for that business, whether you like the core clinics that you've got could sort of get back to those numbers? And then just piecing a few things together, it sounds like you're going to have 200 cycles out of Singapore you obviously get benefits out of Bali. Like to me, this looks like probably a 1,400-cycle business or something like that potentially for next year if you have a good year versus the current performance. Do you just give us a bit of an idea around just where that's at and where it could go?

Yes, Jo. It's Michael. Thanks for joining. Your support is always welcome. Yes, look at, base pay business, which is, I guess, the cornerstone of our Southeast Asian business at the moment, it’s sort of normal run rate or even last year was around about 1,000 stimulated cycles. So they're the sort of numbers on an annualized volume for that particular clinic. And we do expect the recovery to come through in FY '22. But if you look at some of our other clinics and without going into the detail of each particular clinic, Singapore 200-plus. The one in Mitra Keluarga, Indonesia is now heading towards about a 8 to 10 to 15 per month sort of number. So you're probably looking at about 150 cycles; we'll build to in FY '23 on that. And Johor Bahru, it is predicated on borders opening because a big part of the patient base comes from Singapore, actually, for those that want the more affordable solution or what genetic screening. We expect that to build to in excess of 100 in the next 12 months as well. Look, clearly, Bali as a start-up sale's going to take a little bit of a ramp-up time. But if you add all those numbers up, here come pretty close to your 1,400 in FY '23.

Awesome. Just 2 for me quickly. Just on the plus 11% per patient registration, can you just confirm what that plus 11% is a gain from the [indiscernible] were in June, just where that number is?

Yes, sure. It's -- we do our -- the new patient metrics and patient metrics against pcp.

And last one for me, just on the balance sheet. So obviously, you've got net cash you're generating positive free cash flow. We've got a dividend at the half, but I don't think there's anything else mentioned on the capital management sort of front. I mean should we take that to mean we becoming sort of more active on the M&A front into the second half? Or it's just a watching brief at this time?

Yes, John, it's pretty clear that all things equal, our balance sheet isn't probably optimal from a fundamental point of view. But clearly, we've got views on growth, whether that's domestic, international, organic or nonorganic. So those opportunities are there. John, I'd say we'll keep our powder dry and see what comes of that.

Your next question comes from Rachael Harwood from Macquarie.

First question, just wondering if you've got a sense as to the magnitude of the impact, the pause on elective surgery in Melbourne had just overall revenue and margins for the second half?

Thanks, Rachael, it's Michael here. Thanks for joining us. Look, I think the key element here is, Rachael, is we go back to the experience where elective surgery was shut back in 2020, through March and April. And the fact of the matter is that we recovered that volume and some got a bit of a spike. So we don't expect that over the second half, we'll have any impact of substance in regards to the Victorian elective surgery, 2.5 weeks or thereabouts restraint. We are now back in full swing. Those patients don't go away, but there was some pent-up demand, and we expect to catch up that pent-up demand over the next 2 to 3 months.

Okay. That's great. And then you just mentioned you're confident in your ability to grow revenue and earnings in the second half. I just wanted to clarify, is that close on first half '22 or versus the pcp?

Yes. It's close to the pcp.

Okay. And then just final question for me for now. Could you just speak to maybe the run rate you're seeing [indiscernible] just I guess, in terms of cycle volumes and then any ongoing impact from staff availability or patient hesitance coming in just with the increased COVID cases?

Yes. I think we called out that January was pretty tough, but that was where we saw the more significant impact. We're returning to more normal type operations in regards to efficiencies and volumes in February pretty quickly, Rachael, which includes our ultrasound businesses and also IVF. And at the moment, sort of offshore, it's pretty stable. There is a government sort of mandate that they expect for us to sort of open up in Malaysia too on the 1st of March. So we're getting back to a fairly sort of COVID normal sort of volume and margin profit sort of situation pretty quickly in February.

And Rachael, just in terms of workforce, January was obviously adverse for everybody, everyone in our business and we had almost 3,000 hours of sick leave. But the business is back, it's humming again, we've got strong views of where we'll be in March, April, and that just supports our guidance statement that we have.

Your next question comes from David Stanton from Jefferies.

Look, I wonder if you could start by giving you the number of remediation cycles you did in the first half of '22? Or has that all been done now?

Still a few tricker in days. If I give you the raw numbers, it was close to 300 last year, so the pcp, we've had under 100 in this first half. So the noise around that is reducing, and I think the second half will be even less.

Okay. And what number of cycles or what percentage of cycles are the lower priced now in Australia as a percentage of your total. It used to be about 2%. Is it around that -- still around that number?

Are you referring to just our business and if you are, we don't have any clinics that are [indiscernible] across the country. We'll be selective with obviously discounting and supporting our patients, but we still strongly believe in our full service offering absolutely.

Understood. Two more from me very quickly. Do you think it's fair to say that Australians are preferentially using sort of higher-priced IVF during this economic period and that's to some extent why you've gained some share?

I think the numbers that I've seen without sort of quoting on some of our competitors that play in the low price area, certainly the premium price product or premium service model has grown at a greater rate. Clearly, we're in a good position given that's 100% of our particular business, and that's our strategic positioning. So yes, I think it has grown. I'd be interested to see some of the numbers that come through over the next week or so from some of our competitors. But certainly, we've been in a position to capture that premium market position. And when people want to -- go in to this particular category and explore a family, they want the best service, the best quality, the best atmosphere, the best doctors and the best science, and I think we're positioned really well to deliver that.

Understood. And last one from me. We had employee benefits expense of, call it, $34 million. You called out a few -- now that you've called out a few reasons for that. But I'd be interested in what do you think the number will be for FY '22? Any kind of color, should we be thinking around that absolute number or the same in terms of percentage of revenue?

Yes. So same percentage of revenue, I think we called that the percentage at our directors' report when you get a chance to read it. The second half, I think it's going to be pretty similar. It's a bit of crystal ball game with what's around the corner from a pandemic point of view. But I think our workforce is set at the right levels at the moment. We look at ratios for our nurses, for our scientists, what is optimal to deliver the type of patient experience we want and outcomes. But I think you're safe to assume that it's steady as you go at the moment, Dave. So the numbers you see in the first half should be pretty close to the second plus or minus how many leave hours are taken, sick leave is taken, to the extent some of that is out of our control.

So just a follow-up on that then. So saving in absolute terms rather than percentage terms as a percentage of revenue?

I think 34%, Dave.

Your next question comes from Sean Laaman from Morgan Stanley.

I'd like to drill down a little bit just on the sustainability of market share gains. Now that's obviously been working very well for Monash. And then you showed a pretty impressive chart with respect to the improvement of clinical pregnancies in the chart pack. Is that a chart or something that can be used for marketing purposes? Do patients get access to that before they decide provider? And does it differentiate Monash?

Yes, we do show that improvement chart on our website, on our success rates. So it is very, very transparent. And it does have an impact. It certainly has an impact on patients, and it has an impact on recruiting doctors too and scientists. It's really important. But you are at the front end of the scientific leadership and just delivering great success rates, so that the patient value proposition is optimal. The other element, Sean, to that is that Your IVF, which is a new website, which was launched about 12 months ago, also now gives success rate comparisons of every single clinic in Australia or those that nominate to participate in that particular program. So visibility of success rates is quite transparent now. And certainly, we utilize that as a marketing tool, both for internal recruitment, but also for patient recruitment.

And you alluded to, I guess, sort of the increased effort on a bit term with respect to marketing and marketing spend. I think I've got my head in the ground. I haven't been outdoors for the last 2 years. But what does that actually entail? When you're kind of talking to the increased spend is at billboards as I go back out to the airport in Melbourne? What is it? And is it something that your competitors sort of can ramp up to meet or no?

Look, it's multifaceted. It's TV. I don't think there's any other provider actually doing any TV marketing campaigns and our winning One in Six campaign has been very, very successful. It's radio. We don't do too many billboards. We do a lot of digital social media stuff. We're quite active on that particular front. And we do lots of direct sort of patient conferences, information sessions on digital platforms, things like -- we had a ready-set-baby program when people are considering starting a family in an education session, which was on a digital platform, providing information around exercise, nutrition, et cetera, how to prepare to commence your family. So it's multifaceted. But certainly, we are the most prevalent when it comes to marketing and advertising, particularly on TVC and radio across the industry. And that's been shown through our share of voice, which is still at levels of around 70%.

Great. And I mean, this next question might not have a numerical answer. But with respect to those improvements, and you mentioned in the chart pack that there were other technologies that might further drive improvements in clinical pregnancies, and -- is there any sort of scuttlebutt or discussion among scientists or whatever it may be on ultimately where you could get success rates in the next few years?

Yes. Look, we have our internal objectives, absolutely, and that's a pretty key element of our strategic planning is the direction of success rates. It is out. I mean the numbers that you see of 4.6%, that's the sense. So for every 100 treatments, we have another 4.6 on top of the old rates that are becoming pregnant. That is an exceptional movement in what is now a fairly mature industry. So there're smaller increments but -- over the next sort of 5 years, if you like. But certainly, have we got the potential to improve them by 2%, 3%? Yes, they are the sort of numbers that we'll be looking at over the next 5 years.

Also Michael, can I also just ask about the RGS kit, so sort of newish. What's kind of the uptake rate? Is this another point of differentiation for Monash or are competitors sort of following suit with their own versions? And is there any kind of financial benefit observed at this stage?

Yes. No, it's too early. Look, the uptake rate is good. I think our run rate is around 100 a month in the first 2 months. So quite good and need doctor uptake in regards to advising their patients to go down that particular path. It's being recommended very favorably. So we'll be supporting growth in through our marketing campaign, but the biggest benefit, yes, we get a benefit, Sean. But the biggest benefit we ultimately get through the carrier screening at-home test kits is that they come to Monash IVF. And if they do have, I guess, a risk through their genetic and their private genetic profile, the obvious pathway to help mitigate that risk is through genetic screening through IVF. So that's where we'll ultimately get the benefit for it, and there is Medicare support for that particular treatment now, but we'll know more as time goes on as to the impact of that. But certainly, we think that it could be a fairly significant driver of volume and potentially longer term, be around 10% of our volume in 5 years. So that's what our modeling suggests.

And last question, if I may. Just the 4 new fertility specialists. What's their profile? Are these doctors that are established? Are they new through the training program. Yes, if you could give us a bit of color around that would be helpful.

Yes. So 2 that are established, 2 have graduated through the training program. So a good mix of youth, experience and -- but they're all highly engaged and highly enthusiastic and working diligently.

[Operator Instructions] Your next question comes from Ron Shamgar from TAMIM.

I just had a question in regard to sort of the corporate activity happening in your sector. Obviously, there's a couple of private equity players and battling out for your biggest competitor. Just in your opinion, is there any reason why Monash has been overlooked. I mean you seem to be much better balance sheet, a cheaper business that's got a significant market share here.

I don't -- Ron, like you, I don't understand it, obviously, as the CEO of Monash IVF Group. But look, I think our competitor here in this particular market, they are more sizable, they have more market share, and they have greater representation internationally, given I think [indiscernible] in the process at the moment, is an international-based private equity fund. Maybe there's more interest given they're a little bit more advanced in the international strategy.

Okay. And then just one more. Just in terms of your M&As, it seems that it's sort of been taking forever to do any deal. I mean is there -- are you guys just being too conservative? Or there's not many opportunities out there? Or can you just give us an idea? Because you have taken quite a while, nothing is happening.

You're right. We have been quite selective. So we're very particular about any assets that we take on and adapting groups and the culture and the strategic growth opportunity. As you can see, for the adjusted sort of expenses, we -- there was quite a significant number of $1 million, which was used to source, look at, consider multiple acquisitions. So for various reasons, they didn't occur. But we do -- we are active at the moment, and we are looking at a few assets and hopefully, some of those will come to fruition in the oncoming months.

[Operator Instructions] There are no further questions at this time. I'd now like to hand back to Mr. Knaap for closing remarks.

Thank you, Matt. And look, thanks, everyone, for the interest in Monash IVF, and we really look forward to seeing many of you, albeit in a digital capacity over the oncoming week. Thank you again.

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