Good morning, ladies and gentlemen, and welcome to this morning's webinar. My name is Maria Halasz, and I am the CEO of Genetic Signatures. With me today is Angie Wang, who is our Head of Finance. Angie is joining us for the first time. She has recently been promoted, and this is her first annual audit and financial results release. The fact that she became quite ill recently, right after we released the result, has nothing to do with the stress that she may have been under during the course of the audit. With that in mind, I would like to just note the order for the day. The order will be that I will make a short presentation on the actual results, following which we will open up for questions, and you will be able to ask.
We have had some questions that have been submitted prior to the meeting, and I will start by answering those questions and then open it for the forum. Obviously, today's topic is the financial results for the FY 2026 financial year. What we will be talking about is really, first, I just want to recap on Genetic Signatures. The real advantage is all around the company's assets, our product portfolio, and generally where we sit on the market. I will talk a little bit about the highlights from the financial year, the actual results. Some of the key things that we have achieved since I have started in March this year, including the progress we have made on the growth strategy that we have announced on the 10th of June. Finally, I will talk through some of the outlook and some of what we see coming in the coming months.
Just to recap, we are a respiratory and enteric multiplex PCR solution provider. In addition to these product portfolios, we have molecular diagnostics assays, and those will be either regulatory approved by the TGA, FDA, or CE marked. We also have research use only products. We manufacture all our products in Australia in our Maroubra facility under the EasyScreen brand name, and we sell them in U.S., Europe, and in Australia. We have distribution partnerships through Europe. We sell direct in the U.K. and in Australia and in the U.S. What are the key benefits of our products, or generally just molecular diagnostics? Certainly our 3base technology provides improved sensitivity, specificity, and reliability when it comes to detection of infectious pathogens. We obviously support antimicrobial stewardship in hospitals and GP practices. We provide an increased pathogen coverage of up to 24 pathogens per panel.
We provide a multiplex solution to our path labs and hospital labs. Particularly in hospitals, when they use our products, we see a reduction in patient burden and an increase in patient flow, which is, of course, a significant health economic benefit. Obviously, it contributes to reduced labor and stress within those work environments for the health professionals that provide those services. For the hospitals and for the health economy generally, it provides efficiencies. Just to flash on the market, and we are obviously in the syndromic testing market, and we see that type of testing grow across various regions globally, and it is very much driven by the demand from population growth. Obviously, there is an increased infectious disease prevalence, and increasingly, geographies are more and more aware of the advantages of multiplex testing. Reduce AUD 14 million from last year.
Our cash outflow was down to AUD 7 million, down from AUD 12.3 million. We closed the financial year on the 30th of June 2026 with AUD 22.1 million cash remaining. We've reported since that our current cash is AUD 21.3 million. We're managing, we continue to manage our cash flow very prudently. In terms of our revenues, they were AUD 14.8 million, and it's slightly down by 7% to prior year. That was a result of a couple of things.
One is we face increased competition, which is the nature of any business, and particularly molecular diagnostics. In addition to that, we've observed a delayed and muted flu season this year. Last year, we had a very intense flu season, a lot more testing, and a lot more positive cases. This year, positive cases in Australia have been down by 73%, and as a consequence, people probably also tested less.
In terms of the organizational restructure, we've completed that in April, and we expect that in 2027, we'll see an annual cost saving about AUD 5 million as a result of that. We're already beginning to see that, certainly in the last three months in the FY 2026 financial year. We've seen that those kind of savings have been coming down into the bottom line. What we've also done in April is we signed a 10-year supply agreement with Hvidovre Hospital in Denmark, and we have since successfully completed in-situ validation and received our first commercial order. The actual testing has commenced as well in August. We've secured all our long-term supply agreements, so we've got a very secure annualized revenue that we can expect in the coming years.
We have completed a comprehensive organizational review, the result of which was a three-horizon resetting of the business, which we've announced on the 10th of June this year. Let's talk about numbers. Obviously, I've mentioned our revenue was down 7% for a variety of reasons. Our cost of materials have gone up slightly. Our net operating cash outflow was also down by 37%, and of course, net loss was down 30% to AUD 14 million. All these are really important because what we're doing is we're securing operational runway for us to really reset the business. In terms of employee expenses, in FY 2026, they were reduced by 16%, and that's just the beginning of what we see as a result of the organizational restructure. Of course, our cash balance is remaining strong at AUD 22.1 million.
In fact, as we released AUD 21.3 million as of the release of that report on the 25th of August. Some key highlights and a little bit more color around what we've done. The first thing we had to really do is really review where the organization is and be pretty frank about what we had to do to make sure that we secure the business and we reset it for growth. As part of that, we've completed a resizing or rightsizing of the company.
We've done a line-by-line review of expenditure, and overall, we expect that will come down to a cost savings of about AUD 5 million in this current financial year. That comes on the back of establishing very strict purchasing processes and controls. We've been very prudent in the way we deploy capital, and again, that is something that we're beginning to see on our cash flows.
We've also set up an AI policy, and we expect productivity gains like everyone else on the market. It's very difficult for us to measure productivity, but we've got at least two areas where we're already seeing that AI enablement actually facilitates the business. Certainly in administrative functions, we're already seeing that. In addition to that, in our regulatory function, where we've been able to utilize AI to develop and file a lot of our regulatory work. All of this resulted in an increased cash runway, as I mentioned before. We've also secured our long-term supply agreement. Hvidovre Hospital was a real win for our EMEA team. This has been in the making for a few months. Obviously, these agreements take a few months to secure.
Following the signing of the contract, the team actually successfully validated and started commercial testing, which was a key milestone for the contract to be active. We've done the same in Australia in terms of securing long-term supply agreements, and we've also implemented two product upgrades, and that will just allow us to deliver our services much better to our current customers. We've also reviewed our instrument strategy. Obviously, the way we deliver our products is through providing robotics equipment to our customers. Our equipment obviously is under constant upgrade, and so we reviewed our next-generation instrument requirements, and we paused an instrument development program that was really focused around a highly customized solution. Instead, we've looked around the market, and we've developed a strategy to access off-the-shelf solutions.
Not only this will be faster to deliver, more cost-effective, but really brings us into 2026 and beyond as far as robotics is concerned. On June 10, we've announced our growth strategy, which rested on three horizons. Up to August this year, we wanted to stabilize the business. In the next 12 months, we want to optimize our assets and resources to then set ourselves up for growth and then proceed to scale the business. In terms of what we've announced and what we've achieved, we've actually completed the horizon one, which is around stabilizing the business. We've obviously implemented the organizational restructure. We separately announced that with the details, reviewed our product strategy, and started two new product development programs, both of those on the back of strong internal intellectual property R&D.
There'll be differentiated products on the market that will assist us, both in terms of increasing sales, but also improving our delivery of service and products to our customers. We've signed our Australian contracts, and also we have reviewed our market access strategy in the various geographies we've been active, both in the U.S., EMEA, and of course, in Australia. I've discussed quite a bit around the implementation of financial controls that goes through the entire organization, and we put systems in place for how we deploy capital from very small amounts up to large amounts. They're very clear delegations of authorities and controls to make sure that every cent that we spend is, we understand how the return will come back from that. We also have finalized a product strategy and corporate strategy as we've released.
As I mentioned earlier, we paused the customized instrumentation development, and we are now well in progress of identifying or finalizing an alternative off-the-shelf instrumentation solution. We have also developed our APAC market access strategy, recently appointed our head of APAC for market access, who is already well in the job of delivering that market for us. In terms of other things we have announced in the three-horizon strategy under the optimized second phase was build a culture of excellence. I can genuinely say that the organization's strengths are its people. We have got an amazing team that is now fully committed to deliver organizational goals. We have also said during the strategic release that we are looking for partnerships. If you have been looking at the announcements today, you may have seen that we announced that we are in discussions with Microba around a potential corporate transaction.
In terms of scaling, we are not suggesting that we do that until March, but we are well in advancing planning or progressing at various stages, and that is all around APAC. Obviously, that will be a medium-term outcome for us. As I mentioned before, we are progressing well on that. In terms of new product launches, we again expect that from early next year, we will be able to launch our first product and later on in the year, the second. We have had a substantial gain when we signed a Hvidovre Hospital contract in Europe this year in terms of penetrating the market in an area of infection prevention and control. We plan to progress on that, and we are in discussions with a number of hospitals in the U.K. to broaden our market penetration there. I mentioned about our long-term instrumentation strategy.
Again, we are well in progress, and as a result, we expect that we bring our instrumentation strategy back to the future much faster and at much more cost-effective way. We have had some questions around the U.S. market. We paused the U.S. market, and the reason for that was simply to reassess what would be the most effective market access. It is no secret that we have not achieved the traction we wanted to achieve in that market. There was a multiple of reasons why that happened. Not the least that the market is moving very, very quickly. It is a very advanced market. So we want to make sure that when we actually spend significant amounts in the U.S., we will get the return on that. We have not yet commenced a new strategy in the U.S.
However, we have got three active sites, and the recent Cryptosporidiosis outbreak in the U.S. showed us that our product is unique. Our product is very valuable as we saw some revenue coming out of the U.S. as a result of utilizing our assays there. This is my final slide on the outlook. Obviously, we are very intent on growing revenue on the ARES stabilized business. With our solid long-term supply agreements, we have got annual reliable revenues coming to the company for several years, and we are also well-placed to grow on that given improving customer relationships. Very much focused on profitability. We cannot predict when that occurs as yet because there are too many variables, but we are constantly working both on the revenue increase and also on the margin discipline side to achieve that objective.
We also said that we're going to be changing our business model from a fully enhanced development to an outsourced mixed model. As part of that, we continue to develop one of our products fully outsourced to limit our product risk that might occur if we develop everything inside and given the more constrained internal resources following the restructure. We are very much intent on continuing our disciplined capital deployment. As I mentioned, we watch every AUD. We've got very strict processes in place. AI is very helpful in this for us. We can really monitor where our money is going and how our money is returning. We're also pursuing new growth opportunities. Obviously, APAC is an opportunity that we want to explore further, and EMEA with our infection prevention and control value proposition for hospitals is coming through strong, and we expect growth from there as well.
Finally, we will continue to focus on partnerships. That doesn't just include corporate partnership, which you may have seen this morning's announcement, but it also includes manufacturing, product development, and distribution and instrumentation partnerships, which we're actively pursuing with various groups. We're looking at renegotiating our contracts to be more cost-effective. We're looking at more volume-based pricing for our partners, and we're really making sure that the current terms of our agreements are reflective of a substantial value we ourselves as a business provide to our third-party vendors. With that, I close the actual presentation. I thank you for your attention, and I will start by answering some of the questions we have received prior to the presentation.
One question is, "Do any more contracts look like being signed in the U.S.?" As I mentioned, we paused further expansion in the U.S. until we crystallize a more effective market access strategy, and we haven't commenced that yet. However, we're actively supporting our current sites, and whilst we're not seeing new sites being immediately signed, we may see revenue continuing to coming through from those sites. Then we've got another question. "I am interested to know what the communication has been between GSS and BCAL Diagnostics." I'm not aware of any communications between our companies at this stage. Again, I'm speaking from a management perspective, but I've not been advised by the board that there are any discussions between the companies at this stage. There's the question about why are we scaled back from the U.S.? As I mentioned before, there are a number of reasons.
There have been changes to both the regulatory environment, market dynamics, new competitors, and also a shift in the way diagnostics are delivered. We had to reassess whether we're doing the right thing, we're offering the right solution to customers there. As a result, we've decided to pause significant investment in the market because we just weren't certain that the results or the returns are going to come back to us. These are the questions we have received, and I'm going to go into the questions that we've received online. If you wouldn't mind to give me a moment, and I might also ask our Head of Finance, if needed, to address some of these questions herself. Yes. So there's a question around, "What proportion of the AUD 5 million cost savings in FY 2027 would have been eligible for R&D tax rebate?
Is the R&D taken into account in calculating the net savings? Obviously, what we've done with the restructure is we really focused on development and market access as opposed to research in the company, whilst we retained research capabilities that have been reduced. Yes, the restructure will have an effect on our R&D tax rebate. Also, yes, we have actually calculated it into our net savings. There's another question about, again, BCAL, whether we've had any discussions with them. We have not had any discussions with BCAL Diagnostics at this stage. I just saw their change in substantial shareholder notice this morning myself, and I've not been advised by the board that there've been any discussions between the companies to date. What would be the main rationale for a merger with Microba? I think there's a number of things.
One is there'd be a significant corporate overhead savings between the companies. Microba is in a gut health business. We also have an enteric molecular diagnostics assay. To some extent, we both have very strong businesses in that area. That's a synergistic part of our businesses. I think certainly there'd be significant savings around the corporate overheads, administrative costs. In terms of the business itself, we potentially could share distribution networks. This is something that we're exploring currently further. Obviously, we have not done. Nothing is finalized, and we're really currently assessing this opportunity and in the middle of discussions with the companies. We will be announcing anything else that will be material as these discussions develop.
The next question is around the expand on the 80% holding by BDX and the merger talks with Microba, and I don't think I can add any more than what I've already added on both of those topics. To my knowledge, I have not been advised by the board that there have been any conversations with BDX to date. In terms of Microba, discussions are really around assessing a corporate transaction, and we're doing a detailed review of whether it would be sensible, what would be the key advantages, quantifying those advantages, and then coming back to the market with some more information once that's available. Where do we see the main opportunities for revenue growth for us? In the short term, we see some of the. When I say short term, 12 to 18 months.
Certainly a new product, increase in our current contracts, and new contracts in EMEA, and some revenue opportunities out of APAC, although these will be early and smaller. However, in a two-year horizon and beyond, we see that APAC will provide us with substantial growth opportunities. Obviously, this is a high-risk part of our belief system at the moment because we haven't been out there and actually delivering it. We've got a lot of confidence in both in terms of the team, products, and also the opportunity that might be there, and we have started conversations with parties already in that market for potential distribution of our products. We see that in the short term, 12 to 18 months, it will be existing contracts, growth opportunities with new products, new product launches, and then as APAC is coming online.
Beyond that, we'll see growth opportunities there in addition to new contracts in EMEA. We have quite a few questions on BCAL and Microba, and again, I'm not going to be able to say anything more on that. There is a question about who is the right partner for Genetic Signatures, BDX, or MAP. Look, we look at every opportunity to scale the business, and we will be making a recommendation to shareholders on the merits of each proposal that comes to us or each opportunity that we see and we want to pursue. I wouldn't be able to say which opportunity would be better at this stage. We certainly haven't done the work and we haven't done the discussions that would merit a judgment on that or a judgment call on that for you. I don't see any other questions at this stage.
I think I've answered all of the eight questions that were in there. I note your interest, your deep interest on the announcements today, and because I'm not able to give any more information than what is there at the moment and what I've already said, I think I'm going to close it there. Thank you all who have attended. I don't see any more questions coming through. Maybe I'll wait a couple of minutes. No, there's no new questions coming through. So I would like to thank all of you who attended today. It was a pleasure to have you on this call. Thank you, Angie, as well, for attending, even though you're not feeling well. I shall close the meeting. Thank you very much.
Thank you