SkinBioTherapeutics plc (5KW.F) Earnings Call Transcript & Summary

Good morning, and welcome to the SkinBioTherapeutics plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. And I'd now like to hand over to Stuart Ashman, CEO. Good morning, sir.

Good morning. Thank you, Elly. Thank you all for your time this morning. This is our second investor meeting in less than a couple of weeks. So yes, we're breaking the mold a little bit here. This is our presentation where we will go through the full year results that ended 30th of June 2024. We'll obviously talk in reference to some of the things that happened post year-end and we'll try to get this done in an orderly manner. I have seen a number of questions submitted, and we will do, as always, our utmost to get through as many of those as is humanly possible. So on the agenda today, we have operational and financial highlights. We will go through the strategy for the past year and the coming year. We will do an operational review of our organic businesses, the pillars that we've talked about on multiple occasions before, and the new inorganic business, the acquisition of Dermatonics and post year end Bio-Tech Solutions. Manprit will then walk you through a detailed financial review, and then we'll look at a little bit of what's going to happen in the current financial year right through till the end of summer next year in 2025 and then I'll finish off with a short conclusion. So in summary, our business model, if you remember, our proprietary SkinBiotix technology for the barrier enhancement and repair originated from Manchester University. That was then IPOed and backed by a team -- Board members and the management team with very deep medtech, skincare, financial and business experience. So we've enhanced that team this year, and I will come on to that later. With that technology, we target multibillion pound organizations, multibillion pound markets and opportunities in skin care, very specific to skin care, psoriasis, acne, footcare, cosmetics, and we do that through in-house and academic collaborations and also bolt-on acquisitions, which we can now claim having done two this year. The development commercialization of that goes with partners that include Croda plc, who are FTSE 100 multibillion pound organization, where we've successfully partnered with SkinBiotix, which is now in commercialization. Winclove in the Netherlands who manufacture our AxisBiotix products. We distribute those AxisBiotix products through Amazon as well as the Dermatonics products through Amazon. And we also have a tie-up though Dermatonics with the Umesh Modi Group. That gives us the claim to have international sales operations through Asia, Europe, the Middle East, the U.S., Canada and South America, with the Dermatonics products and also distribution to back that up. We have continue to have R&D programs. We've got live programs in oral cavity, in wound care and in inflammation, and I will detail them later. The intention there is to go for external licensing opportunities with multinationals. And from a couple of years ago with the launch of AxisBiotix-Ps, we executed dual-track strategy to accelerate and reach profitability more quickly. And we did that through internal product development. AxisBiotix-Ps being the first that's being followed by the acne product and commercialization there. And there's some external consolidation as well through acquisitions. So the combination of all of that from a pro forma perspective, it's really important that I make this quite clear. So on an annualized basis, were we to have acquired Bio-Tech Solutions before year-end, we didn't; but before year-end, that would equate to consolidated revenues of GBP 6.3 million and consolidated EBITDA of GBP 2.2 million which after group cost puts us past EBITDA breakeven. Now obviously, we didn't acquire Bio-Tech Solutions until October of this year, which is past year-end, so the projections for next year leave 1/4 of earnings out 1 quarter because of the closing of the year in June and the acquisition being made in October. So just so that you're all aware of that, so the analyst guidelines there, the consolidated revenues are actually GBP 5.3 million, and consolidated EBITDA is a loss of [ GBP 800,000 ] pre-synergies. So overview of the year, good progress and priority in the Biotix pillars. SkinBiotix, as we all know, Croda scaled up the manufacturing, and then they had a 12-month extension for additional clinical studies. Those clinical studies were completed very successfully. And post year-end, we signed a commercial agreement, and I'll talk about that a little later. AxisBiotix, we expanded our sales in psoriasis. Those sales continue to grow. They were almost double in the year in comparison to the prior year, and they continue to gain traction. We successfully completed the acne study and moved towards a launch there and the R&D pipeline in all those pillars is progressing very well indeed. As well as that, we introduced our first inorganic acquisition and within that calendar year, Dermatonics in January of 2024, that integration is now fully complete. And post integration, we announced -- sorry, post closure, we announced a commercial agreement and tie with the Umesh Modi Group in Asia. Post year-end, we acquired Bio-Tech Solutions. That was our second acquisition and that provided not only product and direct routes to market, but also manufacturing capabilities that are very, very appropriate and synergistic to the Dermatonics acquisition, and I will talk about that in more detail in just a moment. We also strengthened our core team with the addition of Dr. Surinder Chahal, Dass is he's better known, as you all know, he is a very senior VP of Croda plc and is now advising us directly on all things Croda and additional tie-ups with multinationals. We also brought in with the acquisition of Dermatonics, Tom Waughman, who's the operations manager. He's stepping into the shoes of the exiting founder, Greg Andrell, who is still with us and is for another couple of years as he goes through his earnout, but Tom Waughman is his natural replacement. Likewise, in Bio-Tech Solutions, as Ian Moulds, the founder and owner, steps away. He's with us part time for a couple of years. Andrew Tindall has stepped up to take the reins there and they're both extremely competent managers who know the businesses very well indeed. From a group level, we added Vicky Turner, who is a very experienced marketing manager and those of you who follow us on social media will have seen a significant increase in our activity across all of the social media platforms. In terms of financial highlights, our revenue for the year '23 through '24 is GBP 1.2 million. As you can see, that is a massive increase on the prior year. Most of that is down to the acquisition of Dermatonics but let's not underestimate the growth in AxisBiotix-Ps as well. So we did GBP 100,000 in the prior year, and now we're doing GBP 1.2 million. And as you can see, we're projecting on a full year basis to do GBP 5.3 million on analyst guidance and in a full year on pro forma, that would be GBP 6.3 million. So the change is night and day. The EBITDA, GBP 2.7 million versus GBP 3 million. So slightly down there. And then the net loss is pretty much the same as the prior year. Please remember, there's a lot of integration costs. There's a lot of acquisition costs in there as well. The uplift in sales is pretty much from AxisBiotix-Ps, as I said, and the inclusion of Dermatonics revenue. The cash balance of GBP 800,000. Remember, please remember this is the end of June cash balance. That reflects the GBP 0.5 million earn-out on the Dermatonics acquisition. You remember we did have quite an unexpected fund raise in August, which is significantly short of our cash reserves. And as I've said before, in a full year from both acquisitions included on a pro forma basis, we would be expecting to reach north of GBP 6.3 million and that EBITDA breakeven. And that cash runway, excluding any benefit from Croda is anticipated to last through the summer '26. This has no Croda numbers in it whatsoever. We made that announcement in an RNS that we added cash flow runway through the summer '26. It has no income from Croda. It has no income from any launch of the acne products or any other joint development agreements that we would execute between now and that period. So in terms of group operations, this year has genuinely been a transformational year. And I know I came under a great deal of criticism for using that word. This time last year, in an interview, I said that in this calendar year, we would transform this group. And I'm sitting here right now, I'm quite happy to stand behind that statement. We have transformed this. This is no longer a company, this is a group of companies from the pillars that we had before, which were very much R&D and very much pilot launches of advanced technology products and the tie-up with Croda. We've now added to that the addition of Dermatonics in the podiatry sector in January and then in October, Bio-Tech Solutions, which gives us the manufacturing capability to manufacture all of the Dermatonics products. So this truly has been a transformational year. We've gone from a company to a real standalone group. In our organic business, let's focus on Croda now. You remember what this is. It's the cosmetic application, enhancement of the skin barrier. We signed this agreement in 2019. It was extended in November of last year for 12 months in order to do that clinical work, which was completed in the summer. Those results were incredibly positive indeed post year-end. We've got the green lights ahead, all green lights ahead statement. The project time line is faster than Croda had anticipated for a brand-new strain of bacteria. I know that some people think that the cans being kicked down the road. Samples -- I mean, quite frankly, it hasn't been kicked down the road. They've hit every milestone. They said they were going to hit. And when I show the stage gates now, you'll see how precarious a journey this was. There was an awful lot of go/no-go stage gates, and we came through every single one of them with flying colors. So I'm delighted to say that, that is now behind us. This project is now in full commercialization. We are still expecting revenues before the end of this calendar year from Croda, and I have confirmation from them that, that is still going to happen. We are expecting revenues to continue right through to the launch and then the official launch is in April 2025. We do this on a global stage. They are very, very guarded indeed about the mode of action claims, about the results of the clinicals, but also about the rollout plan. I am privy to it. I have seen it. We have reached commercial terms. I'd like to now underpin and put some doubts to rest. The revenues on this are double-digit percentage revenues on global sales. The tiered element of this is neither here or there. It doesn't move the dial hardly at all. It is not even worth mentioning. It is based on global pricing based on price sensitivities in market. There are some volume numbers in there. The agreement, as we've said all along, we announced in 2019, we were looking for an agreement in perpetuity. This is not a 5-year agreement or a 10-year agreement. There are jump out clauses. I can't go into them. I am literally locked in to a confidentiality agreement, so I need to be very careful what questions I answer on that and what information I evade to the market or convey to the market. Needless to say, we would be absolute fools to try and push information out of Croda. They are world experts in launching products of this nature. They are the architects behind Matrixyl 3000, which is at circa EUR 400 million a year product range. This is seen as a very big potential product. The aspirations of everyone involved in the project are very, very high. Everyone is very, very pleased and delighted with the progress that we've made thus far. Unfortunately, we're all going to have to wait. As I say, the launch plan that we've seen has allowed us to make the statement that we believe that with that income coming in, we will no longer need to go to the market to raise money for working capital. Let me just put another rumor to bed. There's been a lot of focus on the word gradual that was used in the last RNS that income would be gradual. I think people are focusing on single words and trying to see shadows in the dark where they are all wrong. We use that word because we are not expecting to receive GBP 25 million worth of passive income in year 1. It's obviously going to build up and build up. We are certainly not expecting to receive GBP 25,000 worth of revenue in year 1. I cannot talk about specific numbers, but I think people need to stop focusing on the word gradual. It does not mean it will trickle and trickle and trickle. These people know what they're doing. Croda are professionals at this, and we have to trust their professionalism and knowing what they're doing. But please don't focus on the word gradual. It's not necessary. Moving on to that time line. Each one of these boxes pretty much represents a go/no-go stage gate, which we have to get through in order to move to the next junction. We've come through every single one of them. And we've -- as I said, we've done it with flying colors. This is not binary. This is happening, and it's happening now. This is launching. We have got -- we've seen the rollout plan. It is impressive. It is exactly as you would expect of a multibillion pound FTSE 100 organization. All I can say is, in Croda, we trust. I am particularly very happy indeed with the progress we've made. I know it's been a tedious. I know it's been drawn out. It has not been within our control but I think the destination is well worth the journey. Moving on to AxisBiotix. If you remember, this is the treatment of skin irritations and skin conditions -- irritable skin conditions from the inside out via the gut-skin axis. We started with AxisBiotix-Ps for the alleviation of psoriasis. We've now got those direct-to-consumer operations in the U.K. and Spain. We've launched in France and Italy and are gaining traction there. We now distribute this through the Amazon platform, which has seen an uplift in sales. If you look at where we were last year, we did GBP 250,000. And effectively -- sorry, we've basically doubled sales year-on-year, and it looks like we'll double sales again year-on-year. This continues to grow. We continue to attract the attention of the multinationals. To that end, we have had discussions with 2 U.K. High Street chains. I can't go into details on them, but the acquisition of Dermatonics has given us access to customers that they have that are already stocking these products. So we're in discussions with them about the Ps product and also the acne product. You remember, we created two stabilized blend. We commenced a consumer study with 300 U.K. participants, the results of which were absolutely staggering, considerably better than we had anticipated and better than the psoriasis study. We've always dreamed of launching this product in a gum. We are actively working on looking at that now. It is a very complex process. The manufacturing process for gum involves a big boiling bat of gum with flavoring in it, which is then pulled into molds and then cut into strips. And if you put live bacteria into that environment, it simply kills the bacteria. So what we have to do is preform gum molds that have a cavity in, drop the probiotics into it and seal it with a hot knife and that step in itself is causing us some problems. That hot knife element is killing elements of the bacteria. Not all of it, but some of it, and that's not good enough. We need all of the bacteria alive. So we are working with manufacturing consultants to get around that problem. Worst-case scenario through our acquisition of Bio-Tech Solutions, we'll put this into a capsule. It is critical that we get the right carrier for this particular product. The psoriasis community have taken moderately well to the sachet powder. Again, we think we would do better if we put that in a capsule, and we now have that capability. We think that the right mode of -- the right carrier for this in acne would be a gum. If we can't do that, we'll put it into a capsule, but I remain supremely confident that consultants that we've got that are looking at this will find a way around this. Again, on our organic business, our research and development programs continue. This is the backbone of what we do. We have a medical device program that's ongoing with the University of Manchester, with Professor Cruikshank and Professor Andrew McBain, who you will remember was one of the SkinBio co-founders. The aim here is to produce accelerated wound closure and enhanced barrier claims in the MediBiotix area that we can take out and license with an experienced multinational partner. That project will continue on through to the summer of next year before we get the first readout. In oral health, with the Professor of the McBain project, the first phase was complete. The second phase will cost us an additional GBP 250,000. We put a pause button on that now, and we will await Croda income before we go ahead and deploy more cash to finish that project, but we would anticipate getting that done sometime in the summer of this year. We also have the inflammation project, which is led by Professor Cath O'Neill. This is about how the microbiome can influence and balance the body's response to sunlight and harmful UV light and that project is ongoing and will run through the remainder of next year. I talked a little while ago about inorganic opportunities. And again, people say, Stuart, why are you doing this? Why do you not wait for Croda income? And the truth of that is nobody knew, including Croda what the outcome of those clinical trials was going to be. So when they asked for an extension last year and as the project was lengthening, we decided internally that we needed to look for some strategic inorganic opportunities that would bring either revenue generation would bring either additional science that was microbiome driven that we didn't have and it would accelerate some of our systems or would validate some of the opportunities that we already had. To that end, I stated in December last year, a year ago, if we can believe it or not, I can't believe times move that quickly that we were hoping to close an acquisition. Before that year-end, this time last year, I thought we might get it over the line by Christmas. I did say that it depends on how fast the lawyers could move their pens and I meant just that. As always, there was hiccups, and that's always the case in mergers and acquisition. It never follows the path of least resistance. It always finds the most difficult way through to closure. It took -- I made that bold statement, I got to try to get it done by year-end. I did say try, and I did say it was very much in the hands of the lawyers. That slipped by 4 weeks, and we closed this at the end of January, quite a lot of flack foreseeing that I was going to close it as a result of which I will no longer give time lines and then that specific ever again. But we closed this, and we closed it 4 weeks late. This business is going to prove to be one of the stars of the show, and there's a lot more to this business that meets the eye. The revenue for the full year '24 is GBP 1.9 million, we'll put another GBP 1 million on top of that. That's a 52% growth year-on-year, which is pretty staggering. And we'll also add another 40% in EBITDA. A lot of this is down to the Umesh Modi Group, and we think we'll outperform those numbers on top of that. Let me be quite clear about this, had we delayed in acquiring this business, we would have paid considerably more for it than we did because of the Umesh Modi Group. We got involved with the negotiations. We got involved very, very closely with the Umesh Modi team. And as a result of which we closed this thing considerably faster than we could have and maybe some people will say should have, but I can be quite clear about this. This would have cost us at least GBP 1 million, if not GBP 2 million more had we waited for the Umesh Modi Group deal to be signed. Controversially, we did this. The initial consideration was GBP 1.68 million plus an earn out over 3 years, GBP 0.5 million of that's already been hit, the remainder GBP 750,000 is yet to be achieved. The acquisition was funded by the drawdown on a convertible loan note. Now we came under very, very significant criticism for the use of that instrument. It was a necessary evil in order to get this deal done. Yes, it was dilutive. Yes, it was aggressive. It was a 2-year program. We exited that program in less than 6 months. We should have closed Bio-Tech Solutions first. That was the target that we were after. First of all, it was a smaller purchase price. It has fixed assets that we could leverage in order to basically acquire it. But the Bio-Tech Solutions diligence took a lot longer than we had thought. And the Dermatonics team moved a lot faster than we had thought. And we also had the looming specter of Umesh Modi hanging over. We needed to get this deal done and we needed to get it done quickly. I make no apologies for the acquisition of Dermatonics. I do apologize for the use of the convertible loan note. But let me assure you, as a small cap listed company, as a penny stock, it is extremely difficult when you are loss generating -- loss making to find funding for that. Could I have gone to the market and raised it on a fundraise, the market wasn't being so kind at that time of year towards people raising funds for acquisition. We knew how strategically valuable this would be. And I also knew at the time that Bio-Tech Solutions was right behind it. So the combination of the two brings us to GBP 6.3 million. I now hope that people can see the pieces of the jigsaw put together form a solid foundation for this company. We are past that now. It's in our rearview mirror. We've exited the convertible loan note. Manprit and I made a statement to the market that we would never use a facility of that nature again, and we stand by that today. We will never use a convertible loan note of that aggressive nature of that sort of structure ever again. This acquisition has provided immediate synergies. It's expanded our product range and our customer base and allowed us access to multinationals in the U.K. that we didn't have previously. It's given us an international platform. Manprit just come back from India at the sales awards for Umesh Modi, where he was one of the key speakers to the sales team. And Manprit, a couple of words on that, an impressive organization.

Yes. It's impressive, a very large organization. I presented to their entire sales team and the enthusiasm in the room was spectacular. Everyone was very excited about the launch of the Dermatonics products through the Umesh Modi Group, and they see a big future for these products out in that part of the world. So yes, really exciting.

Thank you. Just to be clear, the product has launched, and it continues to launch. They've got 1,200 salespeople that get out there that Manprit was actually presenting awards to the best salespeople that are already shifting products out there. So we've got solid revenue that's already coming in, second fast from Umesh Modi. So just to put that one a bit before any rumors start there. Moving on to post year-end Bio-Tech Solutions. This is another jewel of an acquisition. This is the one that we wanted to get first purely and simply because I thought the narrative would fit better if we acquired this one first and then Dermatonics. The real prize here is that this company can manufacture all of the Dermatonics product range. We announced this when we acquired the business, we talked about the upside there. There is a GBP 600,000 price to be had here once fully integrated, and that integration is well underway at the moment. This company is capable of manufacturing liquids, topical creams, lotions and on top of that, tablets and capsules, which plays right into the AxisBiotix play. It is a full-blown manufacturing plant with excellent warehousing facilities. It's ISO certified and manufacturers to GMP standards. The acquisition cost us GBP 1.25 million effectively, we stole this business. This was a perfect timing of business. It's probably going to rank as one of the best deals I've ever done in my life, and Manprit and I both agree on this. It's a hell of a deal. In '24, it did GBP 2.1 million. So we paid less than 1 year's revenue for this. We're forecasting that it will do GBP 3 million in the full year. That's annualized, obviously. And that, that will generate GBP 900,000 worth of EBITDA, which is an 80% increase on the GBP 0.5 million that it did in its previous year. So this group has got nothing but positive news ahead. It runs one 8-hour shift, 4.5 days a week. So by the time we have the Dermatonics product in, we're going to start to swap these assets. And we are looking at putting more and more capacity in there. I will talk about additional acquisitions because I know it's in a mold of theme. I'll talk about them in a little while. But again, another excellent acquisition that does nothing more than strengthen the group. Manprit, over to you.

Thank you, Stuart. Stuart obviously gone through the macro financial highlights for FY '24, but I'll go through them in a bit more detail now. So out of the total revenue, organic revenue of GBP 250,000 versus GBP 130,000 in the prior year. That was all AxisBiotix-Ps, the psoriasis product. Obviously, nothing through acne yet because that's only been -- the consumer study was only done this year and the results announced in the summer. And obviously, we're looking to sort of finalize our sales plan for that product. The inorganic revenue, that all is related to Dermatonics in the period post acquisition. So we acquired Dermatonics on the 25th of January, so the GBP 950,000 of revenues related to the period from then on and to the 30th of June 2024. So overall, an 82% growth in the revenue from just GBP 130,000 in the prior year to GBP 1.2 million. In terms of gross profit, that all relates largely to the Dermatonics acquisition falling through. From a gross margin perspective, we do start to see -- what we have seen a decline in the gross margin, that's all due to the mix of the Dermatonics products within the group. Now the Dermatonics products, the margins do range by product, but also by geography as well. So -- and through channel as well. So with some of our distributors achieving higher margins, for example, in the U.S.A., where we're currently seeing about 70% to 75% gross margins whereas in some of the European countries through distributors, we're seeing lower margins around 50%, 55%. So the gross margins will fluctuate by product and geography. But we expect a sort of blended margin roughly about 60% in FY '25. There's been a growth in overheads. Unsurprisingly, adding in the Dermatonics acquisition, we brought on 6 members of staff, which includes the founder of the business. We brought on an office as well. So all the various expenses that go with that, including insurance, professional fees, systems, et cetera. So we have seen growth in overheads. The overhead base in SkinBio, that has remained fairly flat, if not actually decreased. Some of the costs that we had in prior years, for example, R&D, we're doing a little bit less R&D than we have done in prior years. And obviously, that's offset some of the inflationary increases we saw in the last 12 to 18 months. EBITDA, we've seen an improvement, and that's largely due to the contribution of Dermatonics flowing through into the group. The net losses remained fairly flat, although the EBITDA to net loss for FY '24, that's largely the amortization of the acquired intangibles on the Dermatonics acquisition. On to the balance sheet. The total assets or the total noncurrent assets, you can see a large increase from prior year. So goodwill of GBP 2.04 million and then an increase in intangible assets from GBP 700,000 to GBP 1.4 million. That all reflects the acquisition of Dermatonics. We have split out the goodwill from some of the acquired intangible assets, and that's detailed in the annual report, as was outlined in the RNS last week. The annual report is on our website as well for you to download. In terms of inventories, that's all Dermatonics related. They do hold a significant stockpile of stock. And we have 2 locations of the inventories for Dermatonics stock. Receivables in line with prior year. The cash balance, now Stuart mentioned the cash balance was GBP 800,000 at the end of June '24. We have done a placing since in August '24. I'll come onto that in a couple of slides time. GBP 800,000 was slightly lower than what the analysts expected, and that's largely due to that GBP 0.5 million deferred consideration earnouts that we made to the founder of Dermatonics. There is another GBP 750,000 of deferred consideration. So that's split between current liabilities and noncurrent liabilities. So there's GBP 0.5 million payment due, subject to Dermatonics taking that targeted earnout to the end of January, which will be payable at the end of April, early May next year. As at the end of June '24, we had the convertible loan on our balance sheet of GBP 740,000. We have subsequently RNS and informed the market that convertible loan is now cleared. So when we present our half year report by the end of March, that convertible loan will disappear from our balance sheet. Overall, total assets are GBP 2.97 million versus GBP 1.99 million in the prior year and that's reflective of the Dermatonics acquisition and a largely stronger balance sheet, putting us in a much better position going forward. That will also be enhanced again in our half year results when we add in the acquisition of Bio-Tech Solutions as well. The cash flow runway has now extended with additional revenue from Croda. There's no need to raise any more for working capital purposes in FY '25, '26 or beyond once those Croda revenue start rolling in. From a cash flow perspective, I just want to outline the large movements in cash. So we opened the year with GBP 1.3 million, the net loss GBP 2.74 million. Various working capital movements offsetting each other with a small amount of CapEx, the GBP 2.1 million that relates to the acquisition of Dermatonics plus the deferred consideration. We did raise GBP 3.12 million in net proceeds from 2 fundraises that we did outlined on the next slide. And then there was a GBP 1.47 million net raise from the convertible loan in January 2024. This all results in the closing cash position of about GBP 800,000 at the end of June 2024. So in terms of fundraising and the capital structure. So we did raise funds to support the business and acquisition strategy. In November 2023, we raised GBP 3.3 million in our placing and retail offer, which was significantly oversubscribed where we placed just under 16 million shares from the placing GBP 1.3 million through a retail offer. In January 2024, we raised GBP 5 million from a convertible bond facility, of which we only grew down GBP 1.6 million to fund the acquisition of Dermatonics as we've outlined previously that this facility is now being closed. Post year-end, we raised GBP 1.6 million in August. This was through a placing of just under 15 million shares at price of 10.5p per share. And this was with 2 new investors, Premier Miton and Cynosure from Canada. The most recent funding was for the acquisition of Bio-Tech Solutions in October 2024, where we received a loan of GBP 950,000 and the subscription of 2.3 million shares raising GBP 250,000 through a long-term shareholder, David Brierwood. The structure of this debt is that it is a 3-year term of 13% interest annually. For the first 2 years, we paid quarterly interest payments in arrears. The final year, we paid quarterly interest payments as well as the capital payments. As part of the structure, we issued GBP 3.3 million of warrants excisable at 10.64p per share. Once these warrants are executed this will then reduce the debt pile from GBP 950,000 to GBP 600,000.

Thanks, Manprit. Just a word now on our trading outlook for the future. This is pro forma, obviously. And I must stress, I said this earlier the GBP 6.3 million annual -- north of GBP 6.3 million turnover is a full year-on-year projection. So that would be only if we had the benefit of Bio-Tech Solutions from June onwards. So that GBP 6.3 million is actually GBP 5.3 million. But I wanted you to see -- visually see what the impact of these acquisitions is on an annualized basis. So you can see there how that synergies are GBP 600,000, how that brings the group to past EBITDA breakeven. So it's important that you realize these acquisitions are truly valuable indeed. So in summary, it has been one hell of a year for the company, it really has. It has become probably the foundation year for everything that we'll do from here on in. The Croda project is in commercialization now. Samples are around to the keys, all green lights here. The commercialization agreement was finalized. My apologies that are bound by a confidentiality agreement. It is not my desire for that to be so. They are very, very adamant indeed that we lock this down. They've done this before. They've worked with small caps, they are very reluctant to work with small caps because obviously, news flow is lifeblood to us. The minute they tell us something we are an asset, straight away the minute they make a quote, we put it into an RNS. They have got to the point now where they're saying the shutters are down. You've got to let us do our job now. Needless to say, as I've said before, the journey is well worth -- the destination is well worth the journey. And I think everyone will be very, very satisfied indeed with the outcome of this project. Croda don't spend millions of pounds in 5 years to have some product trickle out the door. Croda don't spend millions of pounds on a production facility on 20,000-liter vessels on all of that scaling up on what Manprit and I have seen on a number of occasions, a small army of people that have worked on this for a year after year after year. They want to get this right, they're perfectionists, the track record speaks for itself. They are the kings of the cosmetic ingredient world. And as I said before, in Croda, we trust. Please, please do not focus on the word gradual. It is effectively gradual, but it's not trickle. We're not expecting GBP 25 million in year 1 or in year 2, but we're not expecting GBP 25,000 either. This is going to be in line with expectations. And as soon as I am capable of releasing those numbers, I will. On that, I'll come on to being [ inside ] and insight of that later because I've noticed as a question. So all things with Croda, very much green light. Everyone should be very happy with the progress there. The pain is behind us. We're there now. This is in commercialization. AxisBiotix, another good year for AxisBiotix. As I've said, sales continued to grow month-on-month, year-on-year, we've doubled it from the previous year to this year, and we'll double it again. I'd like to think we're pursuing the National Psoriasis Foundation as we have been for years, we've talked about these guys that they are sort of governing body, they're actually a charity, not a governing body. That are the head of the psoriasis community in the United States. We've talked to them for years. We've had a number of sample sent over there. We're now pursuing their formal accreditation, which would allow us to put the NPF rosette on our box. As soon as we've got that, we'll announce that. And then the acne launch, we said we'd do that this year, but we've said we will only launch this with the correct carrier. This is -- we're appealing to the teenage community here and any one of you who knows teenagers knows that they are the least compliant segment of society. So we need to make this as simple as possible for them to take. They're not going to stir a sachet of powder into a glass of room temperature water every morning, they are more likely to take a piece of chewing gum. And if we could do that, we think this will go viral. If not, we'll do it with a capsule and at least that will be a hell of a lot easier to take. In terms of projects, R&D projects, which is the backbone of the company, we've still got an inflammation project running with Professor Garth, the program with Andrew McBain, Professor McBain in the oral cavity. And then we've got the Epiderm project that runs alongside MediBiotix. The MediBiotix project, we very nearly had a deal this year with a multinational that didn't happen for a number of reasons on their side of the table, not ours. So they need to get the house in order, which I'm assured they're doing, and we'll revisit that as early in the new year as we are able. In terms of mergers and acquisitions, we've completed two acquisitions now that offer not just routes to market through those high street giants, but also manufacturing capabilities as well. And we do have a pipeline of further acquisitions, accretive acquisitions, let's be honest about this. We didn't just pick Dermatonics and Bio-Tech Solutions out of a hat. We run a process. We've got a list of companies that are all very attractive. We've got a list of priorities within those companies. Let me be really clear about this. We are not rushing out to buy another company tomorrow morning, nor are we buying one in quarter 1, nor are we buying one probably in quarter 2. Probably in quarter 3, we might even consider it. We are looking towards Croda revenues. I am not rushing out to dilute everyone any further. So let's just put that to bed once and for all. We've done what we needed to do. I think we've demonstrated that we had a solid strategic plan. I know it's been painful for many people, and I apologize for that. I truly do. But it's been painful for the management team also. We've come under significant criticism, some of it extremely harsh and extremely undeserved. We are now at a point where this company should be changing direction. There's some bulk selling going on in the market at the moment. That's beyond my control. What I can tell you is from an operational, from a financial perspective, this company is more solid than it has ever been. And I think in years to come, we'll look back on this year is the year that it all changed, and it's because of the mergers and acquisitions. So from a financial perspective, that outlook that's there that pro forma turnover on an annualized basis is GBP 6.3 million. If we were to do that in a full year, that will be a 2,525% increase in revenue year-on-year. Show me the listed -- in fact, show me another company that's done that in a calendar year, and I'll eat my hat. We've had a phenomenal year. I am immensely proud of the team that I work with, the hard work that Manprit puts in. I can't thank the likes of the investors enough for the patience and tolerance. We've got some very loyal long-term customers out there, in particular, Mr. David Brierwood, who saw the vision, bought into it, understood it and backed us on the second acquisition, which allowed us to bring Bio-Tech Solutions into the table. So we do expect to be cash positive. Once we get this whole thing bedded in from a full year perspective so that's from the full year '25 onwards. We closed this year off not just as 5 pillars with some potential and some ambition with a deal with Croda and Pillar 1 with some wonderful products in Pillar 2 that we're pushing out in multinationals. We've got a potential -- lots of potential in Pillar 3. We haven't touched the surface of Pillar 4, and we don't talk about Pillar 5, but we now stand on the foundations of two solid operating companies, Dermatonics and Bio-Tech Solutions. And that concludes my presentation. So...

[Operator Instructions] As you can see, we received a number of questions about today's presentation. Can I please ask you to read out the questions and give response to where appropriate to do so, and I'll pick up for you at the end.

We'll do it, Elly. Thank you. There's a lot of questions. Okay. Question 1 is, as we have tiered royalties for our Lysate, can you tell us roughly what the tiered royalties in Croda are for high volumes of product? And are you in a position to give any rough client feedback from Croda? Whether the clients like or dislike [indiscernible] love our Lysate. Unfortunately, I've signed the most onerous confidentiality agreement I've ever seen in my life. Not only would I be in trouble, but the company would be sued if we were to start divulging that information. So I cannot go into the details. What I can say is people are focusing on the word tiered. People are focusing on the word gradual. You need to forget them. The tiered royalties, as I said earlier, it is -- the nudge is so insignificant in one direction to another. It's not really worth mentioning. From a legal perspective, we have to mention because they are tiered royalties. But I've stated and I will state again, they are double-digit percentage royalties based on global sales. That's as much as I can say because we've said that previously. Following the EU directive on retinol reduction, do you know approximately what percentage of clients may be forced to reformulate products. That's a wonderful question in detail, and I wish I could answer it, but I can't because I don't know the mindset behind the customers. You are absolutely correct. There is an EU directive on retinol reduction and on going to more greener products. We are the solution, and we are the only solution right now which is why Croda are very, very determined to protect the IP. That's why there's a veil of secrecy over everything. They don't want to give anyone a head start on what they're doing. They want to be the only natural solution. So I'd like to think that, that will be a tidal wave of customers, but I simply don't know. Noting the statement from the end of year results that management has been able to update expectations further to be cash positive from full year 2025 and not require any fundraisers for working capital in the foreseeable future, does that mean that you are currently forecasting that the interim results will show the company to be cash flow positive. Manprit?

Yes. So we're talking about FY '25 onwards. When we expect the company to be cash flow positive is from FY '25 onwards, so at the end of this financial year. So when we get to the end of June '24, we expect the company to be in a much stronger position cash-wise and cash generating from there on in. So this won't be an impel. We don't expect this to be impacting the interim results.