Good afternoon everyone and welcome to the Atomo Diagnostics Half-Year FY24 Results Presentation. We, as you will have seen, put out our results early this morning and we wanted to obviously take this opportunity to run through the supporting presentation and give investors a sense of not only the half-year results but our plans moving forward as well as an opportunity to ask questions. I will just share a screen to get the presentation started. I'm joined here today by Suzy Elhlou, who's our Finance Manager, and she'll be running through the numbers. I'm going to share the screen and we'll get started. Thank you. Okay. So for anyone new to Atomo, a bit of background: we're Headquartered in Australia but have operations overseas. And as well as our operations being based overseas, the bulk of our customer base and revenue is also generated in international markets.
Our solutions are best-in-class diagnostic platforms and finished products that really improve usability but also precision in the hands of untrained users. The proven performance has been increasingly recognized now with U.S. regulatory approval and our ability to enter into and secure contracts in mainstream retail channels. We'll talk a little bit about that market and where we see that market going later in this presentation. We believe that our products offer significant growth opportunity in the market, and that's in part because of the success of the platforms in recent months but also, I think more broadly, a reflection on the landscape that's changed in diagnostics now post-COVID with a transition into increased levels of decentralized and retail-based Diagnostic business. In terms of the business units, what we do to generate revenue, we have a finished Products Test business.
That's us selling as listed manufacturer a finished test in a box, HIV self-testing being our flagship, but we're also bringing through the market a blood-based pregnancy test. We have had expressions of interest from customers for a number of other tests that we're actively pursuing. Outside of those finished product applications, we do have a growing consumer business that's focused on providing solutions to business partners. We have a number of customers signed up, early adopters pre-COVID, and we're now seeing post-COVID a real increase in the inbound inquiries around accessing our solutions. We have blood-based platforms that are now approved by regulators in multiple jurisdictions, and we're also expanding the sample types that we're covering with the development and commercialization of a swab-based device as well.
Those finished product sales as well as our OEM supply of cassette sales are the two main growth drivers of the business currently. I'm going to hand you over to Suzy now. She'll take us through the half-year numbers.
Thanks, John. In looking at the results tables for the half-year on comparative periods, total revenue increased by 41%. In taking a step back and looking at Atomo's core business revenue excluding COVID, revenue doubled from just under AUD 1 million to reaching AUD 2 million for the half-year. So an improvement in both revenue and the quality of normalized gross margins excluding COVID is observed. So that improved from 39%-45%. And that means for every dollar that we are earning, we are keeping more of that. And that's as a result of Atomo's strategic efforts over the past periods to build those business partnerships in the developed markets, which also shows the benefits of being less reliant on the global health business, which yields lower margins in that sector.
In terms of operating expenditure, we continue to run a lean business. The group remains cost-focused, noting an overall decrease across all OpEx categories, and we expect costs to continue to moderate with resources being directed to those key areas of the business that will support future revenue-generating activities, improving our operating leverage. That means when we increase revenue, our operating costs will be able to be maintained. That's as a result of the investments in previous periods that we've made in investing in our core business infrastructure that will enable us to absorb increased sales demand for our products and technology platforms without significantly increasing cost overheads, allowing us to operate towards that break-even. Overall, as a result of the above, we've had an improvement across the board for EBITDA loss, reducing by half for the period. Now moving on to the balance sheet.
We finished off the half-year with no debt and cash on hand at AUD 6.5 million. The balance sheet remained fairly consistent and healthy with comparative June 2023 period. Onto the next slide. Yep. On this slide, we show a bridge of our cash flow activities for the period. Cash receipts for the period totaled just shy of AUD 5 million, and that consisted of AUD 2 million from customer receipts, a further AUD 2 million from net capital raised, and AUD 760,000 from the R&D tax rebate. So taking into account our cash outflows, we've been able to finish off the half-year with relatively the same amount of cash on hand as we started the period with.
So that's been a result of not only of our capital raise but, more importantly, as a result of the increased sales revenue, improved gross margins, and running a leaner business, reducing our cash burn. So our cash burn reduced from about AUD 470,000 per month average to about AUD 330,000 per month for the H1 comparative periods, and that is excluding the capital raise. So that's been an improvement in our cash burn of roughly about 30% period-on-period. We are continuing to manage our cash on hand to also grow the business without significantly increasing operating costs as we improve our operating leverage and further reduce monthly cash burn. And again, that is because of the investment that we have made in the previous periods which now allow us to scale up and meet higher sales demand without significantly increasing our cost overhead.
That's something that we look to continue to do in the next six months and beyond. We'll now also just talk about Atomo's fundamental and trends looking back but also about our key priorities going forward. I'll pass back to John and then we'll run through some questions at the end.
Thanks, Suzy. So as Suzy has very articulately described, we have a growing revenue number and a reducing cost base, and that's a positive sense of momentum in the fundamentals of the business. I just wanted to really give that some context. If we look now over the last couple of half-year periods for revenue, we'll see once we exclude for COVID a fairly slightly increasing but relatively flat level of growth in the core business being HIV and finished cassette products. Obviously, in the last half, we've seen a significant level of increase in that revenue profile, and we expect to see that continue over the half-year periods moving forward. On the left, we look at the gross margin and gross profit that's associated with those revenues.
We see not only is gross profit increasing, but the gross profit margin, the blended margin for the business, increasing fairly significantly over that period. As Suzy mentioned, that reflects a maturing of the business and increased levels of sales into developed markets like Australia and Europe versus earlier revenues that were primarily global health-focused. As we continue to generate an increasing amount of business in these types of developed markets, we do expect to see that improve. Revenue is growing but, importantly, the quality of earnings and the margin associated with that revenue is also growing. We do expect that trend to continue. If we then look on the other side of the ledger and our operating expenses, as Suzy has mentioned, we have over the past number of years been really focused on bringing down the cost of running the business.
We have completed the vast majority of the CapEx investment to get capacity up and running, get regulatory approvals in place. So we have been able to now streamline the business, and we do continue to see ongoing further reductions in OpEx as we move through the rest of this calendar year. So you bring those together and you have a business that's earning more gross profit and spending less, and that can be seen in the EBIT losses now starting to narrow materially and will be continuing to focus on getting to break-even as soon as we can. And we are confident that the fundamentals of the business will allow us to get there. And what's driving that growth? I think it comes back ultimately to the quality of the technology and the products that we've developed.
We have a device performance that is unmatched in the market in terms of both reduction in errors and also user preference. That user preference is becoming increasingly important in a market that is increasingly consumer-focused. The evaluation of our products against existing products in the market always generates very favorable results for us. We've had independent studies done. We have recently shown in the U.S. at a big conference the performance of Pascal versus blood-based test kits. Pascal is quicker and easier to run. It has significant error reduction benefits. It either removes errors completely or it severely reduces the occurrence rate, which means that the overall number of errors that are encountered when users run a Pascal test is a very small fraction of the types of error rates that are seen with standard kits.
We're now increasingly able to validate that and show that to regulators, to clinicians, and we think that's driving a lot of the success of the technology. In terms of performance, errors reduced by more than 90%, which is a very, very material reduction in error rates, and that's why we believe our platform is the best platform on the market to get self-test approvals in markets where regulators are strict and blood testing is not yet being fully capitalized on. Importantly, that reduction in errors is also inherently understood by users, and it's not a coincidence that we have a 90% user preference rate because people who run our test aren't second-guessing whether they did it right. They're not wondering whether they've got the right result. They know it's happened as it's meant to happen, and they're really confident in that result.
That level of user preference combined with very high levels of user reliability, I think, are the drivers of the success of Atomo over the longer term. We have been able to take that technology and apply it to a number of different channels. Obviously, blood testings are kind of first market entry, but we have now moved into swab testing, and we're starting to see in recent months inbound interest and purchase orders and contracts associated with that development platform, and we'll talk a little bit about that in one of the later slides. We're also seeing increased interest in the ability for us to incorporate really user-friendly blister solutions into other diagnostic products outside of lateral flow. I'm speaking specifically of microfluidic and rapid molecular applications where we don't currently play, but our blister technology is very attractive to some market entrance there.
So there is, I think, in the future more business to come there. And obviously, our user-friendly approach to products extends into the reading of results, and we have a very user-friendly app that also allows us to quantify results. So we're very excited about the pillars of technology that we've developed. Increasingly, those pillars are being commercially sought by partners. If we look at kind of where that OEM business opportunity is, we've obviously had, over the last year, reordering from our existing customer base pre-COVID, so NG Biotech and Lumos Diagnostics, both coming away from COVID back to their core business, which included their blood tests on Pascal. Both companies have made significant market penetration and progress over the last year. We're starting to see repeat orders.
We're also seeing, in the case of Lumos, a 510(k) in the U.S. driving a lot of U.S. demand for our platform at conferences now that it has that approval. We're very bullish about Lumos's prospects in that market over the longer term. An NG Biotech continue to roll out the blood-based pregnancy test in the markets where they have exclusivity. They're launched in France. They're launched in the U.K. They're launching in Southern Europe now through a partnership with TOA Pharmaceutical. They've launched in Brazil, and they, I believe, also have recently signed up a distributor in the Middle East. They're making good progress, and we're very excited to continue to support them.
But they really were the early adopters that allowed us to showcase to the broader market the benefits of the platform, and we're now starting to see in this new landscape an emerging interest in consumer health. And we're able, obviously, to point to NG Biotech and Lumos as examples of the kind of success that our partners can have when they go on our platform. And I'm really pleased to say that that's really started to resonate. I was at a conference in the U.S. earlier this month where the technology really, I think, struck home in terms of its simplicity and its opportunity to transform user testing in the home.
We've been able to announce or our partner, Nexon Biosciences, has announced a $3 million government grant to help commercialize a Strep B test on the Atomo swab device, and we're working with them and other collaboration partners now to move that forward as an active program. I'm very excited to be able to take the lead in getting that swab device into market with a Strep B test that has a lot of commercial opportunities, not just in developed markets but also in global health.
We've received a purchase order from a large diagnostic company looking to assess our technologies with a view to a potential custom cassette solution for one of their readers, and we're also in the process of going through a whole range of inbound enquiries and commercial opportunities that have emerged over the last couple of months with inbound interest as well as the conferences that we've been attending. So I think, in summary, we're very bullish about the opportunities for the platform, both swab and blood. We expect to see multiple customers coming onto the platform over the next couple of years across both sample types.
More importantly, we're confident that we can start to now secure agreements where customers will pay for custom development through the market, and that obviously allows us to get revenues in for product development through that period while we wait for these products to come to market. That is a good place to be in if we can deliver on that. Outside of OEM, obviously, we continue to see growth in our HIV business. We restructured our commercial arrangements. We entered into an opportunity to secure partnership with Newfoundland Diagnostics, and they've been very successful in launching the product in the U.K. and in Germany over the last six months with a push into other markets ongoing. We've received orders for more than 400,000 tests for them in the first year, and we're in the process of extending that agreement. We expect that to be a five-year extension.
They want a long period of time to be able to make their presence felt in the market, and we want a partner that's committed for the long-term relationship, especially when they're able to deliver significant volumes. Outside of Europe, we continue to see Viatris registering the product in global health markets. We're very pleased to see that global funding partners are increasingly vocal on the need for manufacturing to be done locally. We're the only HIV self-test manufacturer based in Africa with production in Africa, and that's starting to, I think, resonate with global health. We've hosted a number of global health funding donors to the facility, and most recently, our partnership with Grindr included the Grindr team visiting the facility while they've been in South Africa.
So excited to see that global health business continue to move forward but noting that we're not as reliant on global health revenue for our overall gross margin. And then outside of global health in Australia, we've obviously been a pioneer in HIV self-testing in the country. We still are the only test that's secured a TGA approval. We launched into the pharmacy channel over the last 18 months and more recently started to pilot some innovative ways for people to access testing outside of pharmacies, vending machines, as well as home delivery programs. And all of that, I think, has provided a lot of evidence of demand in the community for self-testing, and that, I think, has helped with the formation of government policy.
We were extremely pleased to understand that the government announced that HIV self-testing would be now a major part of the HIV management policy for Australia moving forward, and we're expecting to see some budgetary support in the next budget on HIV self-testing. We now expect to see that that public health engagement for HIV self-testing will grow significantly in the coming years. Even before we see that government budget come into effect, we've still seen an increase in sales post that taskforce announcement, and we're excited about the opportunity to be able to partner with the government and key stakeholders in Australia to make sure that the test is available and funded and supported by both government and private sector channels. The next product coming to market where Atomo is bringing its own brand to play into Australia is blood-based pregnancy.
We have done a significant amount of market research in terms of what would be a driver to bring a blood-based pregnancy test into the market, given that the current market is all urine-based testing. There was a study independently done that we funded more than 300 women who had recently bought a pregnancy test, and we really wanted to understand what the drivers were for purchasing, what research they did, what were important in terms of product benefits, what were concerns around products, both urine and blood-based.
From that, we got a really good sense that about 20% of the market is actively interested in a blood-based test, and that's based on the fact that HCG levels, the pregnancy biomarker, builds up earlier in blood than it does in urine, which means that blood assays detect earlier than urine, and also they're less variable during the day depending on first flow for urine. So there's a reliability element, and there's an earlier detection element. For 20% of women in the survey, that was really important. That obviously translates to a very big potential addressable market, and we're using some of the learnings that NG have had in France and Brazil in terms of how we kind of promote that product and what's the key driver of kind of adoption. We have been engaged with the TGA on a regulatory approval process.
We returned a response to them about three weeks ago, and we're waiting to hear back, but we are still confident that we can secure regulatory approvals for that product in Australia and New Zealand during this calendar year. As I mentioned previously, NG have expanded their European footprint with a partnership with a large generic pharmaceutical company that have access into a large volume of pharmacies across southern Europe, and we're expecting to see some increase where we're seeing some increased demand from them through that relationship. So in terms of where that leaves us at the end of this half-year, key priorities and drivers moving forward, obviously, the continued expansion of HIV revenue. That's our number one goal. We're starting to see significant levels of sales increase in Europe over the last year through the partnership with Newfoundland.
We're starting to see significant levels of market adoption in Australia with further public health support expected in the budget. So we will continue to prioritize growing those sales revenues, and they come with very good margins that then improve our overall blended margin. Outside of HIV, as I mentioned, a real resurgent in OEM supply opportunity engagement and an expanding customer base coming to the platform as well as the opportunities to develop through, we believe, paid development programs, custom cassettes for other companies that really want to utilize the Atomo technology in a format of their choosing for their application. We're very happy to support those types of customers. It gives us development fees. It then gives us ongoing downstream supply arrangements or technology transfer and licensing arrangements. Outside of growing that business, we're still focused on getting pregnancy to market in Australia and New Zealand.
And as Suzy mentioned all the while, staying very focused on the cost of running the business and making sure that the OpEx continues to trend away from growth. Growth is going up, and we're very focused on making sure the OpEx continues to trend down. And that is, I think, the right direction for the business. There has been a bit of a restructuring of the market post-COVID. That post-COVID hangover, I think, is starting to dissipate. We're now seeing in the market companies looking to move forward with plans for products outside of COVID, and I think our platform's ideally positioned to be a product of choice for, I hope, a large number of those new products coming through. And that's the presentation.
I'm just going to stop sharing and see if we can go to the Q&A section and see if any questions have come in through that period. We don't have any questions live on the system. We did receive one prior to the start of the presentation, and the question was, "Do our relationships in Australian pharmacies, are they exclusive?" They're not. In Australia, we didn't want to give away exclusivity because the volume commitments we could get from any one banner partner wouldn't have offset the loss of sales in the other channels. So we've deliberately decided to not pursue exclusive relationships because we are the listed manufacturer here, and we can support a multitude of channels through that pharmacy channel partner arrangement. Outside of Australia, where we don't have our own on-ground infrastructure, that's a little bit harder to do.
So in those markets, we are more open to an exclusive arrangement in exchange for commitments from a partner. And the obvious example of that is Newfoundland. They've got exclusivity for Europe, and in exchange for that exclusivity, they've really proven they're bona fides with some sizable orders in the first year and a commitment to a five-year agreement. And that gives them some assurance of supply, and it also allows us to have a long-term committed partner that we know can deliver. In markets like South Africa, we have an exclusive arrangement into the pharmacy channels for that, but in other markets, we have some customers looking at market opportunities where we wouldn't be expecting to give away exclusivity. So it is a mixed bag depending on the market and the partner. A couple more questions coming through.
It said, "Is getting into the U.S. market for pregnancy a priority for 2024?" I think getting into the market more broadly is a priority for 2024, and pregnancy is a large part of that, I think, in part because it would be the first product to come to market on an Atomo platform that would secure an OTC over-the-counter at-home approval. I don't think the FebriDx application is necessarily suited to home testing. So I think the first application coming through on the platform that we would look to try to get established as a first mover in that market is pregnancy, so it is still a significant priority for us.
I think in terms of generating cash flow, positive revenue, I think launching in Australia is a bigger priority because that gets us to market quicker, and we don't have to spend a lot of money to get there. So I think getting that product launched in Australia and generating positive cash flow from that approval is the priority number 1 for 2024. But certainly, we continue to talk to channel partners in the U.S., show them the opportunities for the product. I think any success we can have in Australia further supports that engagement, and we certainly would be looking to secure commercial channel partnerships later this year. That's certainly our goal. I think that's the only question that seems to have come through.
Unless there's anything else, I would like to wrap it up by saying, hopefully, this presentation has given you a bit of a sense of where we are for the half-year. But more importantly, I'd like to think that it's also shown the fundamentals of the business moving forward, where we've come from, the revenue's heading in the right direction, the costs are heading in the right direction. The market is now the right time for a technology like this. Before the pandemic, it was possibly a little bit early for a home-based solution when the market for home-based testing wasn't really established. But now, I really sense that we're the right product here at the right time, and I think we're going to start to see continued levels of inbound interest.
With some attrition, we believe a number of those, like the Nexon, will start to come through to full-funded partnership opportunities and new product agreements. I'd like to thank everyone for their time and welcome you back for our next quarterly, which will be after Easter. Thank you. Thank you.