Paragon Care Limited (PGC) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Paragon Care 1H '26 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Carmen Riley, CEO. Please go ahead.

Okay. Great. Thanks, Harmony. Thanks, everyone, for joining the call today. I'm here with Brendon Pentland. For those who haven't met him yet, he is our new CFO. He's been on board for a couple of months. So, I'll go through the high level at the moment, and then I'll hand over to Brendon for the detail. But just turning over, you can see our underlying result is sitting at good sales at $1.9 billion. Our underlying EBITDA at $49 million, which I think is a good solid result. Net profit after tax at $13.3 million. So on the statutory result, revenue remains the same. EBITDA is a loss of $400,000 and net loss after tax of $21.3 million. So, just to go straight to the difference at the moment between the EBITDA figures of the statutory and the underlying is we've put in our notes to the market is that we have, as a Board, taken a decision to make the full provision for the Infinity debt. As our shareholders know, we've been working tirelessly with this group for some time. We did put them on hold in March last year. We had hoped that prior to Christmas that we had come to an arrangement with the Infinity Group and other creditors. Unfortunately, that remained difficult, and it's all public knowledge what's happened with that. And that group was put into administration or receivership and then the rest of it into administration. We are continuing to work with the administrators weekly. And the other creditors are working with that as well. We aren't taking our foot off the pedal there, but we are making a full provision for Infinity. We do need to move on and be cautious around that debt. However, from a statutory perspective, that's what we need to do. So, we think it's a prudent approach to take. I want to ensure shareholders we will do everything we can and keep on track with as we can to get that -- recover our funds. It is expected, as you all know, that the administration process is expecting binding offers in quarter 4. So hopefully, by the beginning of May, we'll have a further update for shareholders. But that's the difference there. And Brendon will take you through a few other underlying differences as well. So from a revenue perspective, I'll just touch back on that. I think it was a really good result from the team. We did have the Infinity -- when we put that account on hold, we lost for the first half, $78 million worth of revenue. So for the team to have built that back up and recovered it to have a positive growth, I think, is a really good outcome. That also included the deflation of the COVID drug of about $48 million as well. From an EBITDA perspective, expenses were well maintained. We did have some challenges around freight during the period, and that was more around some of our integration work that we were doing in some of our new business. We've now opened our new Brisbane site. We had a delay around that. So, that's all up and running at the moment. It's not fully up and running, but we do have stock in there and it's transitioning, and it's certainly taken that initial pressure off our network. So, we did have that in the first half. However, if you look at our expenses as a percentage, I think the team maintained them well. So, I'll just turn over now to our statutory bridge slide, which Brendon will just cover off a couple of other points there.

Yes. Thanks, Carmen. So, we provide the bridge between our statutory and underlying EBITDA just to give you a better understanding of how we get to our underlying result. So as Carmen said, the statutory EBITDA was a loss of $0.4 million. We add back the Infinity Group debt, net of GST recoverable of $46.4 million. We also incurred merger and acquisition-related costs of $2 million in the period. As you know, we completed a couple of acquisitions in the half being AHP Dental in July and Somnotec in December. We've announced that we've entered or signed a SPA with Haju that is yet to be complete. And there are a couple of other smaller acquisitions that have completed. And we still continue to curate a really encouraging pipeline of further acquisitions, strategic acquisitions that we think complement the existing business, particularly as we look to grow out Asia, but also locally as well. So, we identify those and isolate those costs. There were a number of -- as we know, we're nearing the completion of the 3:1 implementation and integration strategy. So, costs associated with that program, which does take cost out of the business, which sets us up very well as we move into FY '27 as a fit business to a scalable business as we look to improve margins. So the costs associated with that, we identify and back out of underlying earnings. And then we have also some unrealized FX gains and losses stated there, which in the period was a net gain. So, we reverse those as we have in prior periods as well. That's where we arrive at our underlying EBITDA of $49 million for the period. We're now moving to Slide 7.

Okay. Thanks, Brendon. So as I touched on before, the revenue, a good solid result there at $1.9 billion. EBITDA of $49 million. The underlying revenue has been strong around the growth back up in the pharmacy division, taking -- closing the gap with the loss of Infinity and also that COVID drug. So if you normalize that out, it was a good solid result. Underlying EBITDA growth on 3.3% on prior year, which is solid enough with where we've been. We've taken out the impact of the Infinity Group and integration costs. Just to touch on that as well, we haven't been over the top on what we've backed out on integration costs. So they are pure in that regard. There are some M&A costs with those new acquisitions that Brendon just mentioned. And we're maintaining solid margins there as well. So, there's no concern around those. So just move on to the next slide. Thank you. So expenses -- so obviously, I touched on before around the operating costs, which we had some freight, particularly in New South Wales. So, we did have some good news where we won some new contracts, particularly in contract logistics. The contracts that we won did put pressure on that network. We did have a bit of a double whammy there with it, where we had a delay in entering our new Brisbane site. So, we had to keep some of that stock or the balance of stock in New South Wales and transferring it up there. So it definitely put some freight pressures on there. Finally got the keys just before Christmas to the Willawong site, and it alleviates instantly that excess space need. So, we'll be able to control that a lot better in the second half. We did strategically invest into the marketing space. Obviously, goes without saying, we expect our investment into marketing to have a return on future growth. And I can see that in the other areas that we've invested into. And then the statutory EBITDA is obviously impacted around the Infinity. Our net debt is about in line with the group's expectation. Just for all the shareholders there, we have a period over the December, probably from about mid-December until about mid-January where we need to build that stock. And our manufacturers often close down over that period of time. So, we have to keep our stock at a peak level pre-Christmas whilst we have record sales, which is a good thing, a good challenge to have, and then it doesn't start really declining down until about mid-January. You'll see that consistently then coming to line with where our sales cycle is, and it will finish nicely by the end of June as well. So it's just a seasonal peak in inventory that we always have as a challenge. Moving over to the next slide.

Yes. So I'll pick this up, Carmen. Yes. So, Carmen spoke to the revenue bridge. So, we'll cover off a couple of the items here, but it is worth just stepping through a couple of those as we rebase the previous comparative period where we back out the Infinity sales and also the COVID drugs. So it gives us a rebased FY half year '25 of $1.7 million. GLP drugs has been very positive for us in the first half, particularly around being added to the PBS and also the Safety Net end date at the end of December. So, there was a strong sales of those in the half. And then also with the organic growth, which we identified there of $114 million. So, we think that's a pretty good outcome. A small contribution from the acquisitions, mainly the AHP Dental, which was in July, a smaller contribution from Somnotec, but we'll see those contributions in the second half along with the other acquisitions as we complete those contributing into the second half. So, I think just to characterize that, yes, if we only adjusted for the Infinity sales in the first half and then also excluded the revenue contribution from the acquisitions, the net organic growth of $7.1 million (sic) [ 7.1% ] against the prior period is a pretty solid result in our minds -- 7.1%, yes. sorry. So, I might just move now to the next slide, which is just as we talk to our geographic segments. I think it's -- so yes, the ANZ region, solid normalized revenue growth at a steady margin, I think, is really the feature of this result. Before normalizations, the growth rate for the region was 2.1% and after normalizations, which we just stepped through was 9.8% on PCP and the margin remained steady at 7.8%. In that wholesale channel, which did see a decline of 2.6% period-on-period and finished at $1.5 billion in the half. That was impacted by the Infinity sales and COVID drugs. And when normalized for those was a 6% growth PCP. Wholesale margin improved slightly to 6.1% from 6%. So in a competitive space, that's a good outcome. Still on wholesale. In our total pharmacy, so that's hospital and retail, revenue did decline, but noting that those normalizations that we spoke to and when adjusted for those, it did have strong -- pretty solid growth of 7.4% in PCP. I mentioned the acquisition of AHP Dental. So, that's a division that we're pretty keen on in dental and developing it. And that sets us a really solid platform as we further our market -- go-to-market strategy under a single brand to drive profitable revenue growth in dental, which we see as a fertile ground for us. Complementary medicines within wholesale remain resilient, continues to perform in line with our expectations. And then also our continued expansion into our medical consumables range and reach, including our private label portfolio, has been a feature also in the first half. If I just move to MedTech in ANZ as well, where the ANZ revenues increased by 4%, mainly driven by strong growth in the Australian Medical & Surgical Business Units, but also in our New Zealand Orthopedic Business Unit and the launch of our Aesthetics being a feature in the first half. Vision revenues declined in the period as we transition and rebuild that portfolio. And we're making investments into surgical robots and aesthetics in ANZ to support future growth opportunities in that particular channel. Contract logistics, as I move down the table, really pleasing result at 47.1% revenue growth really underpinned by a significant contract win in June of '25. So, we saw the full benefit of that in this half, but also an equally significant organic growth with existing principal. So, that was a really, really pleasing result, and we look forward to seeing what we can do in that space. So the margin in that contract logistics also improved to 4.7%. And I think that's just reflecting a change in mix and some scale in that particular business. Clinical Manufacturing delivered a solid revenue performance, but was hampered with some delay of some equipment sales, which we were hoping to land in the first half. Margin did improve pleasingly in that particular channel. And we do maintain a solid pipeline of opportunities given our specialist sovereign capability in the production of reagent blood cells. So, just -- that rounds out ANZ. I'll move to the next slide, which is Asia, which falls into the MedTech channel. You'll see there really strong revenue growth at a healthy margin. So, very well done on the team operating through those countries and region with revenue growth at 33.2%. And just a reminder that there was very little of that came from the acquisitions in the period. So, that was a really strong organic growth, really underpinned by strong aesthetic sales and delivery of a couple of large capital equipment units in the period. Organic revenue growth of $16.2 million or 31% is really -- we will give that a big tick and margin growth at 30% at a margin of 44% are really attractive numbers for us and why we see that as a region that we want to invest in and continue developing our -- expanding our scale in that particular region. I'll just move on to the next slide, which gives a view of our balance sheet. Carmen touched on our net working capital position that does reflect that end of calendar year buildup. So, we expect that to moderate in the second half. Acquired businesses contributed $13 million of net working capital. And also just a reminder that our -- that Infinity debt has been fully provided for and sits on our balance sheet at nil value, with our net debt slightly elevated. It'd be nice to have had the $48.5 million of cash from Infinity that would have helped that number. But as Carmen said, we remain hopeful that there will be a substantial recovery of that in the second half, but that process needs to run its course. As I move on to the next slide, which is an overview of our cash flow for the period, pleasing result in improvement in working cash flow from operations with our working capital management in the period. Investment in net capital expenditure is largely in our Willawong DC, which is now open. And the businesses acquired, those cash outflows were in relation to AHP Dental and Somnotec. And you'll see the use of our financing facilities to just to assist with our working capital build in the -- towards that peak sales period. So with that, I will hand now back to Carmen to take us through the outlook.

Okay. Great. Thanks, Brendon. So just reconfirming our guidance for the year. So, we are confident around achieving the $3.6 billion or thereabouts billion in revenue. EBITDA, we're remaining at the $97 million to $107 million underlying guidance. And our net debt underlying, we're aiming for approximately about 2x by the end of June. So, that should be a good solid outcome for Paragon Care. And hopefully, the shareholders and investors on the call think the same. Again, I know we've covered this a number of times on the call, but I want to be very clear about Infinity. We won't take our foot off the gas around recovering that debt. It's unfortunate that it is in the hands of administrators. But at the same time, I like that it's out of the control of the Infinity Group as well. So, I think it will speed things up for us and hopefully get an outcome sooner rather than later. On strategic acquisitions, we'll continue down that path. You would have seen in the notes that David is going to have a focus on M&A. This will be about the right acquisitions. We do want to continue the growth in Asia. We've had a really good news story in the first 6 months, and we see a lot of opportunity around the Asian countries, and we'll continue to focus on what we can build on there. But again, it will be the right acquisitions that we know that we can bring into the business and that we can expand on them. They won't be just a set and forget. So, we've got a strong pipeline, but we actually want to make sure that we do something with them. So, we are growing. We're in 9 Asian countries now, which is hard to believe in a short period of time. We would like to cover off getting up into 1 or 2 other regions. But at the moment, we're focused on just those 9. We are looking towards finalizing our 3-2-1 strategy by the end of June. The team at Paragon Care are very clear from myself that once we get to the end of June, integration is done and it's business as usual. So, we're mostly of the way through. We are on track. There are some things that we do need to cover off by the end of June as well. So, we'll work hard at getting that done. I did announce around the Ramsay business. It was important that I shared that as soon as I could with our shareholders, more so because it is a big top line number. It is a large private hospital group. But from a profitability perspective, we were confident in taking all those costs out because it was such a low-margin business and we're well progressed down the track on doing that as well. So, you can have confidence around that. And also, hopefully, to make sure that our shareholders do have confidence in what we can achieve is that we have been awarded the Australian Defense Force contract for the pharmacy, medical and dental. It's a 5-year contract with some options there. And we certainly won that contract on capability. It wasn't a price-driven contract. It was about capability. So, really proud of what the team did there to achieve that. So from a dividend perspective, no dividend was declared in the period, but we will review the dividend at the end of June, and we are committed to reviewing that for shareholders each half as well. And just to wrap up, you would have got the news this morning, but I'll be transitioning a little bit earlier, not that much earlier, but over to Managing Director role from the 1st of March. David is still in the business. As I said, he'll focus on M&A and making sure that those businesses that we do acquire are bedded down into our network and that we leverage the opportunity that they bring. Okay. And that's about all. I'll hand back to Harmony and she can see if anyone would like to ask any questions.

[Operator Instructions] Your first question comes from Tom Godfrey from Ord Minnett.

Great. Maybe if I can just sort of start with the guidance, noting we're in the sort of $10 million range there. Yes, I'm just sort of interested in your thoughts around what the key drivers of the bottom end of the range outcome versus top end of the range outcome would be? Or what are the key puts and takes in the second half?

Probably the biggest factor is making sure we clear out and finish off the end of that 3-2-1 transition piece. As I said, we're 3/4 of the way through it. There's some complicated pieces in that. I just want to make sure that, that's bedded down. I need to make sure that the transition into the new Willawong site is completed because I've had some pressure around that freight cost there as well. They're probably my 2 biggest risk areas between the top and the bottom end of that.

Great. No, that's really helpful. And maybe just on the net debt guidance. I just wanted to confirm that's pre-AASB 16 EBITDA, so it's got the leases in there. If that is the case, it sort of has you coming down towards $200 million of net debt from $287 million this half. Are there any assumptions around the Infinity outcome in that?

No, Infinity is not in it. That excludes Infinity.

Yes. So, Tom, just to reiterate, that is a post-AASB 16 EBITDA calc.

Your next question comes from John Hester from Bell Potter.

Carmen, just in relation to the Medical Technology business, it looks like FY '25 revenues were $196 million and you had a big second half, $114 million, and it's dropped down to $86 million in the current period. What happened there?

In comparison to last year? Sorry, John, you broke up there.

Yes. First half '26 versus second half '25. Sorry, just to reiterate.

They can be lumpy, John. It depends on where they fall. Yes. Are you talking MedTech because MedTech on the first half was $86 million and half year '25 was $82.7 million.

Correct. But what I'm saying is that the second half of '25 was $114 million and it's come back to $86 million. So hence, the question why is it so dramatic?

It's just lumpy, John, on what we bring forward. So, I'm not concerned about that.

Right. Okay. It seems extraordinary decrease. So, what do we expet...

The only area that we have had being problematic in MedTech would be the division. So, we've definitely had a decline there. With OEM, we've had a really strong growth in that space. We have invested into robotics there in MedTech as well. So the rest of them are not too bad. So, I'm just thinking that through as you asked that question.

So projecting forward, is it more likely to be $114 million second half or an $86 million second half?

Well, the second half should be stronger based on what we've got in the pipeline.

Okay. In your contract logistics business, what was the big contract you won and how much is it worth?

Well, we can't say how much it's worth because we're under commercial agreements there. But the biggest contract that we've won most recently was Owens & Minor. So, we do all of their distribution across Australia. But we've also had underlying -- we've had some smaller contract wins as well, but that was the bigger one. And we've also had organic growth in that space as well from existing principles.

So is it reasonable to expect that there will be a long-term sustainable sort of revenue number? Or is this going to sort of fluctuate around short-term wins and losses?

Well, I'm not expecting any losses in contract logistics, but I certainly -- I'm expecting a few more wins. That business unit itself has a long runway. Look, I think -- I don't think I know we are subscale of where we could be on that division.

Okay. Just moving on. In relation to other income, it was material in your EBITDA result. It's consistent with how you traded in prior periods. But what was the $2.9 million of other income?

Yes. Some of that's the GST that's recoverable on the Infinity. So, only part of it in this reporting period is recoverable, John. So, we recognized that. There's a -- due to the, I guess, tax office laws, we can only claim the GST back when the debt is older than 12 months old. So, we could only claim back part of it in this period. But once we get past March, when we cease trading with Infinity, there will be a further, I think, $2.7 million of GST recoverable that will also come back through our P&L, but that's just a quirk of the tax and accounting. But it also does include interest income, which we recognize under our contractual terms with our customers. So, that is recorded in that line as well.

So, that $2.9 million is not bank interest, that's interest recoverable from...

That's partly from customers and also, yes, that GST amount.

Okay. So is it reasonable to expect that -- I mean, not the GST, but the other income, the revenue income will be repeated in the second half?

No, I wouldn't bank it on it at that same number.

Okay. Okay. And finally, just in relation to your operating cash flow number. I'm just on the slide deck. It was -- cash flow from operations is $4.8 million -- negative minus $4.8 million, and that improved from a loss or a net cash outflow of $19.5 million in the prior period. So if you take out the impact of Infinity, and I don't think that was impacting this particular result. But why is the business sort of so capital heavy in that -- in the first half and you seem to get a much stronger cash flow operation -- cash flow result from operations in the second half?

I'll answer part of it, John. There would have been some impact in the PCP because of Infinity, that would have contributed to the $19.5 million. But also, there would be some benefit in the first half of this year because we didn't have any sales of Infinity, but there were some -- there were continuing cash payments that we did receive. So, there would be some swing factors because of that. So, that gives some perspective. The second part, the capital intensity, well, as Carmen articulated before, it is that end of calendar year build and our suppliers going into shutdown. So, we do need to order big leading into Christmas and that December period and have the stock on hand. We've got strict SLAs with our customers around delivery. So, we've got to have it in our warehouses and be able to deliver within those strict guidelines. So, that's a major part of it.

Peaks out in December, John. You don't have the same thing in June.

Your next question comes from James Tracey from Blue Ocean.

Would you -- just -- I'm sorry to labor the point on the cash flows, but would you be able to provide a bit more of a bridge between the $49 million of underlying EBITDA and the minus $5 million of cash flow from operations? Yes, because I guess it's a $55 million delta and looking at the balance sheet slide, it doesn't look like the working capital has gone up that much. So, maybe it would be helpful in understanding how you get from the $288 million of net debt you've got now to sort of $200 million guidance, which is implied by the 2x underlying EBITDA guidance you've given on the net debt.

Yes. Look, I might need to take that one on notice, James. It might be a little bit hard to step that through here. So if you wouldn't mind, I might just come back to you on that one.

James, there's a number of things that are in there. There is -- we're getting a tax refund. We've got the working capital benefit of Ramsay going out. We've got a few other things like that. Even though you've got some of the acquisition costs out there, you've also got the benefit of those incoming. So, there's a number of things that build up that bridge. Yes.

And there are -- in that underlying number, there are obviously cash components in that underlying EBITDA number, James. So look, we'll -- I think, yes, there'll be a number of layers to it. And for that reason, I think I'll just need to come back to you and be able to step that through.

Yes. I guess people would -- over -- through the cycle, I guess people would hope to see the operating cash flow, excluding interest and tax closer to the underlying EBITDA. But I guess on a full-year basis, that should be more of the case given you don't have the issue of customers being in shutdown over Christmas. So...

Yes. We'd expect that to unwind somewhat in the second half.

Yes. I mean, you build that -- release that stock, James, it makes a substantial difference. I mean, we never build stock to that extent during the rest of the year. You take that pressure off. You've got your short month basically in February as well. So it's just a cycle thing the way that our cash flow works. Now we have our -- the way our debt collection works anyway. So it's like a -- peaks at about the 25th of the month and then it goes right back down, which we've gone through with you before. I can take you through it when we're one-on-one together. But it's just cyclical on the way that it works. But that buildup of inventory in December is material.

Okay. That makes sense. And just a quick follow-up question just around this Australian Defense contract that you've mentioned in the release to kick in, in the fourth quarter or fiscal quarter of the year. The Aus tender website is saying that contract is worth $351 million over 5 years, I think. So, could you just comment on, I guess, the incremental profitability of that because it seems like it's a very big revenue number and maybe how it compares to the Ramsay contract, which you lost?

Sure. So, look, I expect revenue is probably -- I mean, you never know until it kind of -- once it's in progress, but I'm expecting revenue around the $40-odd million for that contract. I can't go into the details of it because, obviously, some of that is confidential as well. But the Ramsay contract, as I said, was a very low-margin contract, probably too low, even if I'm completely transparent, even probably the last time we tendered for that business, we went a bit too tight on what the margins were. We always knew that if it tendered again, that it would be risk, kind of no surprise where it went to. It wasn't a surprise at all actually to us where it went to. They've got a big network that they've got to fill, and I understand the reasons for it. But you've got to get to a point that you don't want to keep giving money away for just the prestige of a contract. However, with the defense contract, as I said, that was one on capability. So, I expect -- and we know that, that will deliver a better gross margin dollar than what the Ramsay contract.

Your next question comes from Josephine De Martino from [ BT ].

This is Josephine De Martino. A question for you, Carmen. The share price has come down considerably. And to date, it's now sitting at $0.185. So, that's dropped from when, nearly 18 months ago, it's dropped $0.525. What's your feeling about that, given the fact that the dividend hasn't been paid? Interest rates have gone up, and they're potentially going to go up. And I've heard, watch the brokers have been asking and all their questions are very fair. So, where is your sentiment around the share price and the value of the organization?

A tricky question for me to answer. It's a good question. Clearly, I'm going to answer the, I guess, the political response to say, I don't worry about the share price every day. But of course, we've got shareholders that I actually worry about because I want to make sure that Paragon provides a return to our shareholders. So if you worry about it every single day, then that's problematic for anyone who's an investor. Do I think that it got overcooked and went too high at one point in time for where we were at? Yes, I did. Do I think it's too low now? Absolutely. If you look at us compared to where we sit against our peers in the market and our multiple, we're pretty low. So, I'm surprised at that. I do think we were so early on in a massive integration, and you cannot flick the switch on these things overnight to get that result better, the work that we're doing and what we've done and the result we're delivering on, If we end up at $100 million of EBITDA to $107 million this year, I'll be absolutely over the moon on that result, I mean, compared to where we were even last year. So it's a good growth. What I'm not -- I'm absolutely not happy about is the position that we've ended up in with Infinity, and I've tried to be as transparent whole way through that process. And that, to me, is our only black mark on us. It's a big black mark. I'm not trying to deflect that. But I do think we're being punished a bit too hard if we look at that underlying result and where we're sitting around that. I do think we will -- the administration process, if you look where the administrators think they're going to pitch that and what they're looking at recovering, I think it will be a good outcome for us. I know it's out of my control. So, I can't hang my hat on that, but I do think it will be a decent outcome from us. And even outside of that, we've got personal guarantees against all of those directors. So, we won't be stopping there. And then outside of that, as I said, if we get to $100 million to $107-odd million in EBITDA, it will be an excellent result for the PGC business. And we've merged 3 very complicated businesses together in just over 18 months. And when I look at the pipeline of opportunity, once we're together because I think if we can do this now with what we've been through, once we've finished this 3-2-1, it's all around sales execution. And that's why we've got such a big focus up in growing that Asian market because we think it's subscale and the opportunities there are just mind boggling actually and then also overlapping our opportunities in building the Australian and New Zealand business as well. So, we have been focused on that integration. But next year, we hit FY '27 with our sales strategy. So, I went and bought some more shares when I could, and I'll be looking at it again. I believe in the company. I wouldn't be doing what I'm doing every day if I didn't.

And just one last question. If the share price continues to slide as it has, is Paragon Care at risk of a takeover?

No. It wouldn't be anyway because you've got -- whether it's a good thing or a bad thing, you've got to get a couple of major shareholders across the line. I know, unequivocally, they are not sellers.

Your next question comes from Tom Godfrey from Ord Minnett.

Just had a quick one on the Ramsay contract. Sorry to flog a dead horse. I think when you sort of announced that, it was a circa $6 million gross profit for FY '25. Can you sort of confirm how much OpEx sits directly against that and how much you can pull out? And what's the timing of the working capital release?

Well, the working capital release starts to kick in, in about February. Yes. So in about February. And the OpEx against the gross margin was basically line-ball.

Got you. And you mentioned earlier, you're pretty well progressed in terms of executing the cost out?

Yes, yes. That wasn't started until January because the contract exited at the end of January. You have a little bit of layover with that. We're still second line with Ramsay. And yes, so the working capital releases by the end of Feb.

Understood. And last one for me. Just sort of a broader question around how the sector is going. We've obviously seen the API and Symbion results. They're sort of talking to pretty strong like-for-like sales growth across their networks. Just any comments around what you're seeing across your pharmacies and just competitive dynamics?

Yes. In the wholesale channel, I agree with the positions that they're taking. The wholesale channel looks pretty solid, and we've got some new opportunities in that space as well. MedTech, as I said to John before, can be a bit lumpy. You've got to get hospitals, obviously, which is the biggest space to buy. They've been okay on the smaller end of equipment, still a bit slow on the larger pieces. But we've definitely seen green shoots over the last 3 or 4 months around that. And we've had some good opportunity in MedTech up in Asia as well. And you know that we've invested into aesthetics in Australia and New Zealand. So, that's also starting to take flight.

[Operator Instructions] Your next question comes from Stewart Oldfield from Field Research.

Carmen, congratulations on the promotion. Just on -- I remember back at the full year, you sort of flagged a couple of acquisitions by AGM time saying that there's a pipeline in Asia. Can you just give some indication of whether any of those might close before the full-year results?

Yes. Sure. So, Haju, which we did announce, we just haven't completed yet. That should close by full year. Hopefully, over the next month or so, that should close. We closed Somnotec on the 15th of December, and we did buy that AHP Dental one earlier in the year as well. So, we've got another one that we're closing at the moment as well up in Hong Kong. It's a smaller acquisition. And yes, that's probably about all I can say at the moment.

Yes. Just in our subsequent events notes, we do detail.

Mostly in that, yes.

Yes. So, there's been 3 subsequent that we've completed to year-end, Fisher Biotec, small tiny one in WA, Pacific Medical, Hong Kong and Presidental. So yes, M&A is continuing with some good cadence.

Well said. That's all funded by that Asia-based facility. Brendon, you inherited that local Scottish Pacific facility. Is that behaving as expected?

Absolutely. Yes, yes. Good.

ScotPac have been really good.

Good support from ScotPac. It's a good facility, works for us.

There are no further questions at this time. I'll now hand the call back to Carmen for any closing remarks.

Okay. Well, thank you very much for your time, everyone. Some good questions there. So hopefully, we answered them to everyone's satisfaction. And Brendon and I will be available to take calls, obviously, but we're also doing a roadshow mid-month. So hopefully, we'll see you all in-person then. Thanks very much.

Yes. Thanks, everyone.

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