Physitrack PLC (PTRK) Earnings Call Transcript & Summary

Hello, and welcome to Physitrack's Q4 2022 Results Webcast. I am Henrik Molin, the CEO and Co-Founder of Physitrack, and I'm joined by Charlotte Goodwin, Physitrack's CFO. So let's get going. We will give you a quick summary of Q4, and I will walk you through some of the more details there of the business in the quarter and also for the full year. Charlotte will walk you through the financial results. We'll revisit the strategy and outlook, and then you can ask questions using the Q&A function on your Zoom screen. The chat function has been disabled. So it's the Q&A function that's your role to pleasure there for asking us questions. So let's get going here, looking at the quarter as a summary, so 57% of combined growth, organic -- organic and the -- looking at the proforma growth lodging in line with our medium-term financial goals, 27% proforma growth during the quarter compared to prior comparatives, EUR 3.4 million of EBITDA increased by 31%, so a stellar quarter. It's the biggest quarter so far in history, and we keep being on a very, very nice trajectory here for both business lines. Some highlights on those on the left side there, Wellness, absolute record proforma growth and performance in the division as a whole. These are home run performances by everybody in that division just some -- just one exception to that, which you know I'll speak some more about that in a moment. But looking at the German division Wellnow 386% and top line revenue growth on an organic basis, Champion Health 224%, Champion Health Plus 139%. This is really nice explosive growth that these fantastic entrepreneurs are achieving. It's a great market for us, and we keep delivering into that which is fantastic. Speaking on something that hasn't worked according to expectations this year, Fysiotest hasn't performed the way that we expected it to. But we have some great firepower there in terms of management that has now stepped in to lead that business. Kristoffer Svensson, our previous Nordic Sales Director of Fysiotest, is now the Managing Director of Fysiotest. And we have high hopes that we'll see a return to growth there after a very, very challenging start of the relationship with us. Some interesting things in their pipeline, and we have full confidence in Kristoffer and Alex [indiscernible] has the dream team that's going to accelerate this going forward. And of course, as you saw, I was very, very proud to play the video for you when you look at the self-service and the SME launch of Champion Health as we opens up a product-led growth for Champion Health, which is previously only enterprise sales focus for companies 500 employees and up a little bit more on that later on. But I feel really great pressing play on that video because it's really about what we want to do to bring wellbeing widely across the world, not just to big companies. On the right side here, Lifecare, some interesting steady heavy performance there from that division, nice growth, really, really high margins, but looking at some of the drivers there and what's going on under the hood. We are very, very happy about the PT Courses rejuvenation with, I think if they're coming in and delivering new platform there, and that sets us start for some nice bundle offerings, and continued nice user base growth. And we've already added a couple of thousand new customers there with the subscription model, and there's more to come. But the new digital content and the platform -- the new platform will launch in the next couple of weeks, this is really giving some interesting tools for growth notably in the U.S. market, and also something that's been very promising Mobilus -- the GoMobilus platform, we have now incorporated those users into the Physitrack platform to a great success almost 90% of Mobilus users [indiscernible] over to Physitrack, which gives us high hopes that for future of things that we just to simplify the product range and to simplify this business will have some great results coming out of that in the future. So digging in into this a little bit more deeply just on a high level view, the Wellness division is now 31% of the business. And I can tell you 2 years ago, almost exactly, it was 0% of this company and the way that has been built and under the leadership of Ryan Ebert and the way that the things that progress there makes me incredibly happy. It's been a great way to rest of the business and also to cater the needs of individuals around the world and not just care providers and being a secondary provider into and individuals, that what -- that makes us immensely proud and more there's more to come there, but very, very explosive growth that has a margin expansion in progress there. So we started again from absolutely zero 2 years ago where we are now -- gives us very, very high hopes of where the Wellness is going to sit when Physitrack going forward. And just a snapshot here where we are size wise EUR 13.7 million run rate, Lifecare is about EUR 9.4 million, Wellness is EUR 4.3 million of that, it's been a very nice journey, and there's more to come on that journey as well going forward. Just looking quickly at the Lifecare side of things and I'll give you some of the business highlights of the quarter, but just to remind you, it is a holistic product ecosystem that we put into the hands of healthcare providers around the world. From small guys, can be the 1 person high street Physio guy in Tasmania, Australia, it can be the mega clinic with thousands of practitioners in Canada and everything in between 15 languages. Some of the relationship starts very small with excise prescription technology. The second part from the left, some big and more advanced customers look at analysis, they look at statistical tools and all white labeling, which is the customer app right there on the left. And of course, PT courses which is the e-learning component of that strategy so that we can make sure that the people can keep and renew their physiotherapy licenses, occupational therapy licenses in the market notably. In terms of development looking on the right side there, continued growth in the user base and that ecosystem. So that's very nice to see. But below that graph, you see that the churn now to 1.2% and we have done a lot of interesting things on the platform with our customer value task force and other initiatives that mainly use data and user patterns to draw conclusions about things that we need to do to make the journey better and onboarding better results as we paying off. And a reminder about a year ago that churn number was about twice that. And so it's been a really nice journey there. On the left side there, a couple of things there, that simplification of the division so just things like having that holding company overlay to Physiotools with Tanila Holdings that's now gone. We've merged those 2 to simplify. We mentioned the Mobilus integration with Physitrack, that's also been taken care of. Mobilus came along for the ride when we acquired Physiotools and that's been -- was a great participant in that, but we are better off as a more simple product range in terms of cost base and also the experience and innovation, et cetera. So very, very nice. That's all been made possible by a very, very strong development team. That's now in-house. It's been a great journey with that engineering team and a lot of them came from a multibillion dollar company called Zendesk, there was very humbling to see these guys come aboard with us, and to see us as a safe haven, see us as a great place for growth and to achieve your dreams of really contributing to elevating the world's wellbeing, even though you come from a big, big company like Zendesk, while it's a nice place to come to Physitrack as well. So that's been very, very good. And a lot of these boosts that we've seen to product-led growth, a lot of the methodology that underpins enterprise sales now that wouldn't have been possible if we hadn't had that team onboard. So very happy about that. PT Courses, we spoke about, and there'll be more to come with that platform going forward. Just moving onto Wellness now. You see an echo here of that strategy on the Lifecare side of things, holistic, everything that you need in one place, make sure that you don't need to go to a separate provider if you have a specific need. We try to cater to all of that in the same beautifully ecosystem powered by Champion Health. So that's really the strategy. And looking at the development of that division, nice strong growth, 54% year-on-year. Looking at the right side of things, just filtering for the Fysiotest challenges that we have had with that performance, actually, the underlying growth of those other companies on an aggregate basis, 202% and that's organic over the last 12 months. This is really, really a high momentum, let's say, rocket chip of a division in terms of execution, and we really see those in the numbers. There's more of that to come. And it's been really, really nice seeing the emergence of that division, and the organic growth these entrepreneurs working together, achieving those kind of numbers for us. And so we've had some nice, nice wins over the year, the Wellnow or German subsidiary which soon to be renamed Champion of Germany operating with -- also the Wellnow trading name in parallel to that, but they passed a EUR 100,000 monthly run rates in Q4, which is very, very nice when you see that several 100% up from where there were a year ago. And we mentioned the Fysiotest restructuring and its been a challenge to have one company inside of this rocket chip that hasn't done well, but I feel that these entrepreneurs are so strong and they have some great ideas and great energy, and its been very, very good to inject that into Fysiotest as we reboot that under the leader of Kristoffer Svensson and [ Alex Heloi ], his right-hand guy, they are on sales, they renamed into Champion Health Nordic, was put into motion a couple weeks ago, so it's with the Swedish company's house. So we'll see that reboot with existing customers and also with some exciting new customers in the pipeline there as well. In terms of Champion Health Plus, firmly we have plus they have grown significantly size-wise also in terms of their clinical footprint in terms of their staffing and their network and their partners, it's qualify them to participate in much bigger tenders, which means that we see faster growth which is illustrated by that triple-digit percent growth that you saw, now you've seen year-on-year. So that sophistication of the science is really helping them to push revenue and -- in order to expand margins in a very, very nice way. Last point there, top talent joining the division, Ryan Ebert from Bupa, knocking in out of the park in terms of leadership over the Wellness division of working alongside with superheroes that we have that are great entrepreneurs that built great companies. They got to join the group and to work together. Ryan has been very key from that. He came from Bupa, which is one of the world's biggest insurance companies. And this is to have access to talent like that, its really key, humbling to get people from such big established companies and brands to join us. Similar story with Nick McClellan from Mercer has come in to run sales for the Wellness division with the book of business that he's built up over the last couple of decades being in Wellness with some great results, and also the profile and the way that he can work with our rather quantitative sales model, which is [ STR AE ] based sales development representative account executive base is really key for that growth that we will continue to see in that division. So very, very nice. A couple of points there, of course, super proud to press play on that clip in the beginning, announcing the move into SMEs for Champion Health, and this is done via a self-service pay with your credit card type things similar to what you have underpinning 50% of the revenue base of Lifecare, which is fully or very highly automated. So it's a great way to diversify your business. And it's also a great way to provide these tools to smaller businesses that have the same needs to take care of their employees like the bigger guys. And so 99% of the world's companies are actually small to midsize and there's no reason for us not to help those guys as well with whatever they need and what is probably the most challenging well-being climate to corporates that have seen since the pandemic. Workplace Health Report, it's a great thought leadership piece that's published on a regular basis by Champion Health by using a million data points from different corporates in the U.K. ecosystem. The last report was launched on the 24th of January. We had some really, really significant business leaders and potential customers in that room as it was launched in London, of course, the download situation, which is gone ever further since we do this -- [indiscernible] from them at 1300 downloads in a few weeks. This created hundreds of prospects and adding to the thousands of prospects that have come in over time through champions genius social health -- sorry, social media presence in the way that they really help companies around the world think about the wellness of their employees. And very, very proud to see that it's a great report, it can really help you with your business and sort of make sure you download it and take a look. So beautiful place to go, Champion Health, everything that you need in one beautiful design app. And this is exactly what our companies and what our employees need in 2023, I don't want to think about 4 or 5 providers to just cater to those easy one -- one easy beautiful place to go and that is Champion Health. We have a little case study in this presentation. So feel free to download [indiscernible] I wanted to point that -- here is that data is a very important part of that commercialization process and so gather a lot of information from our partners, customers when we see how we help them get the terms with work related stress, injuries and absences, and employee attrition, et cetera. So that's a very important part of what we do. But read us as an illustration of the real impact for work that we are actually doing across that user base and much, much more the stuff to come. And with that, I'm going to pass the button over to Charlotte to walk us through some more details on the financial results. Charlotte, over to you.

Thank you very much, Henrik. So I'll start off here with a brief overview of the key financials for the year ending December 2022. In the year, we delivered revenue of EUR 12.5 million, up 57% from EUR 8 million in the prior year. On a proforma basis, adjusted for acquisitions, revenue increased 27%. Although dampened by Fysiotest performance which was still broadly in line with our medium-term targets. In the year, the Physitrack Group delivered adjusted EBITDA of EUR 3.4 million, up 31% from the prior. And this resulted in adjusted EBITDA margins of 28% compared to 33% in the prior year. This fall represents the relatively stronger growth in the Wellness businesses, which currently operates at a lower margin. Total EBITDA has increased 186% from the prior period to EUR 2.5 million as we incur less costs relating to M&A and integration work as well as EUR 0.5 million credit to adjusting items on the revaluation of deferred consideration. Operating cash flow has more than doubled to EUR 1.5 million. Now through to the next slide. So on to a closer look at revenue. On the left here, you can see group revenue by quarter, both on an absolute and a proforma basis. Total revenue in the quarter has grown by 38% on a proforma basis by 20%. On the right-hand side here, we can see the split by Lifecare and Wellness. In Lifecare, growth in the quarter versus the prior year was 5% against a strong prior year comparator. Growth in the ecosystem was offset by a fall in revenue driven by a move to a subscription revenue model in PT Courses and a fall in one-off setup costs for customer apps. Additionally, in the period, we migrated our small Swedish exercise prescription platform Mobilus to Physitrack. Although this generated efficiencies for the group, there was a small drop in revenue associated with it. In virtue of Wellness division has experienced another quarter of strong proforma revenue growth of 55%. It's also pleasing to note that an increasingly large portion of this division is now made up of subscription revenue, currently half offering a more stable revenue growth profile and a move towards increasing margins. Go to the next slide. Moving on to profit. On the left-hand side here, we see the prior year figures. Last year, EBITDA was EUR 0.9 million with adjusting items of EUR 1.7 million stripped out, adjusted EBITDA was EUR 2.6 million. In the current year, EBITDA has risen to EUR 2.5 million. Within this, EUR 0.9 million of nonrecurring adjusting items, primarily relating to acquisitions and associated integration costs and offset by EUR 0.5 million credit relating to the revaluation of deferred consideration. With these amounts stripped out, adjusted EBITDA has increased by 31% to EUR 3.4 million. Adjusted EBITDA margins are fallen slightly from 33% to last year to [ 28% ] in the current year due to the shift of the group towards Wellness revenues, which currently operate at lower margin plus investments into future growth. Over the medium term, we expect this to rebound to our target EBITDA margins of 40% to 45%. Moving to the next slide. On the left here, we have adjusted EBITDA shown by quarter for the prior year and the current year. On the right, we have EBITDA by division. In Lifecare, which is the longest established division, EBITDA margins are at 49%, broadly in line with the prior year of 48%. In the wellness division margins are currently at 2%. Where we're starting to see expansion on businesses, which have been part of the group for a long ago. We're also investing in this business in short term to drive future growth. The gray bar represents group costs such as board fees, listing fees and associated advisory fees. Is in the next slide. Now looking at cash, we opened the year with a cash position of EUR 13.3 million, adjusted EBITDA in the period generated EUR 3.4 million almost offset by working capital movement of EUR 0.6 million and interest payments of EUR 0.1 million. Intangible assets and fixed assets additions were EUR 4.5 million and consists of the development of the Lifecare tech platform and investment into the virtual wellness ecosystem plus the previously signaled spend of build fees for internal systems such as Charge [indiscernible] and NetSuite. There was an acquisition spend in the period of EUR 6.9 million relating to PT Courses well known Champion Health Plus deferred consideration payments of EUR 3.4 million and related M&A and integration costs of EUR 1.4 million. In July 2022, we entered into a EUR 5 million sterling revolving credit facility for a 3-year term. In the year, we drew down EUR 0.9 million sterling in this facility to fund part of a deferred consideration payment. Net of arrangement fees, this resulted in a cash inflow of EUR 0.8 million. There was also a EUR 0.2 million movement on foreign exchange and our cash balances. This leaves the group exiting the year with cash of EUR 0.6 million plus remaining undrawn facility of EUR 4.6 million, giving total available liquidity at the end of the year, just over EUR 5 million. On to the next slide. This slide shows the total net cash from operations less the investments in intangible assets and PPE. Due to spend on M&A and integration costs recognize as adjusting items in the P&L and investment in both Lifecare and Wellness divisions, we've had a net cash burn in the year of 2022. As these investments are completed and operating cash improves, we have seen this cash burn decrease through the quarters. In 2023, we expect EBITDA to continue to increase and our investments in intangible assets to keep decrease now that planned one-off investments have been carried out, resulting in improvements in our cash generation. Although there will be quarterly variances on working capital, overall, we expect this cash burn to continue to decrease and result in a net cash generation before the end of 2023. In Q1 2023 deferred consideration payments of EUR 1.6 million will be incurred. And depending on the results of our subsidiaries, up to 1/3 the deferred consideration payment can be expected in the year. Move to the next slide. Now moving to the group's balance sheet. The first line here includes the internally developed technology platform as well as intangible assets and goodwill arising on acquisition. Cash on borrowers, we've covered in the previous slides, and trading on the receivables have increased due to the recent acquisitions, particularly Champion Health, which builds up front the 1- to 3-year contracts and is expanding rapidly, as well as the relative increase of our enterprise customer base in the Lifecare division and sales of customers apps. Additionally, accrued revenue related to Champion Health Plus has increases, this business grows rapidly. We're pleased to have seen the trade receivables balance reducing Q4 as these impacts equalize. Deferred revenue is primarily generated by Physiotools and Champion Healthy bill upfront for 12 months or longer contracts. Deferred tax arises on the intangible asset balances recognized on acquisition and will unwind over the period of the amortization of these assets. Deferred consideration relates to the Champion Health Plus formerly Rehab Plus, Fysiotest, Wellnow and Champion Health acquisitions. That's all from me. So I'll pass you back to Henrik. And feel free to ask any questions during the Q&A session. Thank you.

Thank you, Charlotte. We have an strategy and financial goals. We are reiterating medium-term top line revenue goals organically are 30% and looking at profit margins over time, we will see them in the 40% to 45% range. And -- this is something that's very well illustrated by what we see on the Lifecare side of things. There is margin expansion and we're going in the Wellness divisions, we will see the aggregate come in line with that in the medium term. Value creation/distribution, we know that this is a cash-generative business. Over time, we think that dividend should be part of the playbook of such a business, and this remains a goal for us in the medium term, of course. In the short term, we are plenty busy with what we have there in our M&A portfolio with respect of not to be compensating our great Wellness leaders for great performance and paying on out as they reach their performance goals in terms of top line revenue growth and margins. But over time, this is not unlikely that [indiscernible] in play. Just looking at the business model and the -- why our company is set up the way it is -- it is a the portfolio, both in terms of product, in terms of the customer base and in terms of that dual focus on product-led goals and enterprise sales growth, profitability and running this business in a cash gentle way, it is part of DNA of the business, and of course, you have some of the other things there having us, there's an old weather type play and something that is stable is attracting a lot of interesting talent that is really pushing us to new heights in terms of innovation and where this business can go. So it is a very, very interesting business that can withstand some interesting headwinds there in the macro environment. And in fact, some of the macro environment is quite favorable to us. And the way the business set up. My last slide there, nothing has changed here, some great market growth dynamics this market environment is very favorable to what we do. Do you see that with that 202% excluding Fysiotest growth in the Wellness division companies, and this is certainly something that we are capturing with that business in a very good way with those work stores that are running that business. There's some nice organic growth levers all across the group. On the M&A side of things. We look at the interesting opportunities. We speak to interesting entrepreneurs all the time. This is not something that we're executing on in this type of environment. But historically, this has been a home run play for us, establishing that wellness division from 0, 2 years ago to EUR 4.3 million today by M&A and some great organic growth with smart people coming together. That is a great strategy and something that we will continue to revisit over time. And that was it in terms of the presentation. We will now move over to taking some questions. And we will look at the -- just kind of spotlight as we're on the screen at the same time. The is going to pick up the Q&A here and see what we have.

So first off, [ Joachim ] from DNB. And so Charlotte, this will be a question for you here. How do you envision your ambitions of 30% plus EBITDA margin in 2023 to play out? Given that it will require either one, a true acceleration of the higher-margin Lifecare tech business from current 5% year-on-year or 2, a strong step-up of profitability in wellness, which is clearly outpacing on growth and what levers can you pull for either scenario?

Yes. no problem. So the answer to that is that it will be a combination of both of those factors. So the 5% in Lifecare tech for Q4 was a bit of a one-off with certain factors that I'd outlined and the more normal growth profile we see in that is the sort of 15% to 20% year-on-year growth. We'd expect to continue to see that in 2023, and that will drive part of the margin expansion. And we also expect to see a step-up in profitability in the Wellness and some of the things that we put into place come in, we'll see margins expand every quarter in that division. So a combination of those 2 we'll see as exiting 2023 at those higher margins than what we're seeing currently.

Next question is also going to be for you, Charlotte. What do you expect to pay in earnouts for 2023 split by each acquired subsidiary beyond Q1 2023? And I should point out to [ Joachim ] that there are some trade secrets around M&A. So you don't want to spill the beans on exactly how all of these things come together. It makes it really hard when you do negotiate with future potential acquisition targets and also with your existing ones. But yes, and also before Charlotte in, the earn out payments are based on top line revenue growth and margin expansion for all of these subsidiaries in the Wellness division. And it's a very much not linear, it's not something that guarantee in any source of way, performance really underpins that both. So everything needs to come in line when it comes to profitability and earnings with the rest of the group. Over to you, Charlotte for -- with some potential granularity on that side.

No problem. I think I've probably given a little bit more detail, [ Joachim ], posted this at the beginning of the call. But in Q1, 2023, Wellnow have met a target for earn outs that will be paid in Q1 2023, and there will be a small earn out EUR 100,000 related to Champion Health Plus as well, and then later in the year, we expect there could be one further earn out payment depending on exactly the results, that's a little bit harder to tell whether that will fall into 2023 or 2024.

Okay. I think next for you as well, Charlotte. Trade and other receivables are increasing at a heavy pace, although a slight quarter-on-quarter decline in Q4. What is driving this increase? And what implications do you see on net working capital profile going forward with virtual wellness becoming a larger share? That is fair to assume that working capital will boost cash flows going forward or become a larger headwind as virtual wellness is the key growth driver.

Yes. So the thing I should say is because we bill upfront receivables go in, but they mainly relate to deferred revenue, and you also, therefore, get an increase in deferred revenue. So when looking at our working capital, we should look at the net of receivables and payables, which has had less of a negative impact than just if you look at receivables stand-alone. But there has been negative impact like you say, that has unwound in Q4. And going forward, there'll be a sort of push and pull 2 factors, the Champions Health [Audio Gap] when net cash comes in is upfront for the full year. So there's also a deferred revenue element, which is helpful from a working capital point of view. In 2023 net, I would expect it to have a neutral impacts and no positive or negative impact, particularly from working capital whether there'll always be timing differences when particularly on the payable side, big bills, insurance and audit hit a certain quarter. Overall, across the year expected to not drive cash either up or down.

Next question also from [ Joachim ]. To what extent do you see it as more of a hurdle to sell into HR departments and employee well-being admit cost control initiatives amid a more volatile macro backdrop. Well, financial stress is something that is also a challenge to business leaders. And so there's nothing worse than looking at your company and seeing that macro factors are affecting top line growth and profitability and things like that. Now what a lot of business leaders do realize is that the people that are -- with your company, those are the people that will help you get through that, also the people that will make sure you can accelerate through the macro environment that is choppy and not accelerating the ability to focus on nurturing and building talent, protecting those key performers in your business. Those arguments make financial investments into technology like Champion Health, quite irrelevant for them. It's also something that's very cheap compared to losing key staff, which is what people are really faced with in this type of environment, losing people to stress emotional well-being problems, et cetera. And the -- I believe that we have some of the greatest tools in the world around this. And in this macro environment this arguments are easy to make. Plus, we come in, in sales processes are with great data, great data that shows using this type of technology will help people with that -- the holding on to your revenue base or your margins or whatever it is, by making sure that you could keep your people onboard. You don't lose them to stress and they don't leave you or that you have turned over. And of course, initiatives like working with leaders in understanding this stuff. It's a core part of the Champion platforms. We just don't work with employees. We do work with the leaders as well, so that some of these arguments are not lost on them. But overall no -- the -- we don't really see it as a hurdle. It's more like the macro environment is creating stress to actually do something and to actually execute on well-being strategies to make sure that the key people that deliver these results stay with you. Next question here. Can you talk about the different growth profiles in the geographical mix for Lifecare year-on-year? It appears Europe and North America are roughly flat year-on-year. And what is driving this. Charlotte, do you have a breakdown there of those numbers? And I can talk about the prime.

So some of those one-off things that have hit us in Q4. So the PT Course has moved to a subscription model. And that particularly impacts Q4 because the PT Courses the way they continued professional education [ EA ] works in America is often positive calendar year. So a lot of people buy courses just towards the end of the year to compete their CPT. So whereas largely, all of that would have hit in Q4. So we had a big uptick in -- of course, this year, we're still seeing that same uptick, but most of that has been deferred into next year because it's on a subscription basis. So that impact is particularly large in Q4. So that obviously hits the North America, sort of dampens that and disguised the growth in the Physitrack video tool side, again Europe is a big part of our customer sales, so there's one off customer sales drop off hits the Europe. So there is one factor that mainly hitting those 2 areas, which sort of dampens, there also -- obviously, on more mature markets. So the growth is -- although they're bigger, the growth is a little bit slower there on the underlying piece as well. So and -- the mechanics and obviously Henrik you want to expand on the commercials then, go ahead.

I mean when we're looking at PT Courses, we saw a lot of potential in that product to create a bundle with our U.S. customers, so that you have one place to go. You remember the holistic thinking to allow one place on the same platform. So you don't have to look for other providers, that's a great competitive advantage. PT Courses needed to be restructured for million à la carte business into a subscription business, which is well underway with almost a couple of thousand new customers there in that subscription model. So it's kind of almost like you need to do a reboot from a revenue standpoint in terms of [indiscernible] from immediate [indiscernible] to the subscription base [indiscernible]. So this is something that's correcting itself over time, but that investment is exactly what we needed and this is doing exactly what we wanted to do. So stay tuned for the launch of the Thinkific powered platform in the next couple of weeks with that great new digital content that we have there. Question here from [indiscernible] can you talk a little bit more about the profitability focus that you mentioned in the report. You have thus far been quite opportunistic regarding taking on further OpEx to fuel growth, are there any changes here Champion Health and the entire Wellness division, margin development and go? So this is the big challenge as an entrepreneur. You see something works really well. You see that you have great product market fit. You see you have great products. There is always a temptation to front load costs to accelerate that growth opportunity and just try to capture as much as you can. And that's why venture capitalism is something that's been a favorable strategy for the growth of oil price. So of course, it's a challenge when you're faced with that opportunity set. So we are pacing ourselves into that as well as we can. You see with press releases where we hire more high-profile people. You saw that with Nick McLellan, you saw it with Ryan Ebert, for example. So they represent taking a bit of a front load risk or front-load cost just to accelerate an opportunity. But generally, we are very, very careful with pacing the size of the cost base with the top line revenue growth. So they go and lock step with that. So there's a lot of prudence there in a model for it. And in terms of the Champion Health and the entire Wellness division, well, we're already seeing the margin expansion. This is more something that will be more visible, I think, from Q1 going forward in terms of the impact that hasn't reporting, because step-by-step division by division, they are mature enough to get into acquisition where they can accelerate the revenue without adding to the cost side of thing. So business maturity is part of it. And also it's pricing power in local markets where you see that you have a more important footprint and you have a loyal customer base, we're able to start measuring things like that more closely than you can make price adjustments as well, which we are seeing for some of our -- for some of our subsidiaries over time as well. And lastly, as we saw with Champion Health Plus the opportunity to be part of bigger transactions. These releases more economies of scale as a business where you can cater to those with a -- cost base that's actually quite attractive, and that also releases higher margins, so step by step that's what we get. There is no reason why the Wellness division as a whole. Just looking at Champion Health with top -- with gross margins of 85% and up and a very, very healthy EBITDA margin. That's not too far from where we are on the Lifecare side of things. There's no reason to not have confidence that, that division will clock in at -- maybe not exactly the numbers we have on Lifecare, but not too far from it and ending up with 30%, 35% on a division I think is a very, very realistic scenario. I'm not going to put a time line on that, but we are definitely coming into as Charlotte said, the cash flow positivity territory. And actually, from a month to month, it actually varies it hovers around that cash breakeven point. So we are already doubling in cash flow and positivity on an operational level. But to have a bigger sort of impact on that group, it's followed for the whole group, its -- yes, probably in the next couple of quarters. That's a good answer. There's the last question there from [ Oscar ] from ABG. Do you believe the current cash position, including the revolving credit facility, it will be enough to turn cash flow positive? Yes, [ Oscar ], it is -- some very strong mathematics underpinning that. And we have no reason whatsoever to be that we will be in the space where we will need to raise additional capital by issuing shares brought to expand that rolling credit facility if we don't want to do that because of an M&A situation, for example, -- and as Just to clarify Charlotte to be great, did ABG intraoperative, right. Free cash flow should turn positive by the end of 2023, all right. So those were the final questions there in the Q&A, I'll just going to double check, no that was it. On behalf of the Physitrack group and all the people -- wishing you a healthy and happy and productive continuation of the first quarter, and we will speak to you soon, take care and [indiscernible] for us.