26 performance and operational highlights before Birol Akdogan takes us through the financial results. We will then open the webinar for questions from analysts and investors. Before we begin, a few brief housekeeping points. All participants are currently in listen-only mode. Questions can be submitted at any time using the Q&A function on the webinar platform, and we will address as many as possible at the end of the presentation. If you experience any technical difficulties during the webinar, please use the relevant support function within the webinar platform. I would also like to draw your attention to the important notice and disclaimer included in today's presentation. Please refer to the full disclaimer contained in the presentation for further information. I will now invite Victoria to take us through the FY 2026 results. Victoria.
Thank you, Becky. Good morning, everyone, and welcome to our FY 2026 Monash IVF results briefing. I would like to start by acknowledging the traditional owners on the lands of which we are meeting today, for me, it is the Wurundjeri people of the Kulin nation, and to pay my respects to elders past, present, and emerging. When we met in February, I described the first half of FY 2026 as a period of stabilization, operational reset, and forward positioning for Monash IVF. Out of challenge had come a deepened understanding of our patients, our industry, and most of all, ourselves. The fundamentals of Monash IVF remained strong. World-class clinical outcomes, deeply committed doctors and staff, and revenue that was resilient. We needed to restore underlying performance, strengthen execution, and position the organization for sustainable growth.
In February, we were clear about the task ahead, but we were still exploring what was possible, testing assumptions, imagining, and refining. Now, six months on, the second half of FY 2026 has been about putting in place the pathways and capabilities required to enter a new era. We have begun to turn the wheel, with early momentum now evident in our underlying performance. There is much to do, and FY 2027 is about continuing the deep work required to translate these strong beginnings into meaningful long-term impact. We have created a fork in the road and are changing the trajectory of the business.
We exited FY 2026 with renewed momentum, improving IVF domestic activity, demonstrable market share gains, strengthened medical workforce capacity, and realizing the benefits of our investment in international expansion, which is now delivering strong profitability. In February, we were clear that the business needed an operational reset.
While revenue remained relatively resilient, it was not translating through to EBITDA at the level we expected, highlighting a structural opportunity to improve the way this business converts revenue into earnings. Over the second half, we have deepened the focus on operational excellence and have line of sight to right-sizing of the cost base, identifying key structural opportunities across all areas of our business. This has resulted in a comprehensive productivity program with clear and evolving initiatives, accountability, and a meaningful shift in the way we think about performance. These changes are taking hold across the business and are already starting to translate into financial performance. With FY 2027 being the year we convert this foundation into earnings momentum.
Operating models are at the heart of how we execute, but strategy provides us with the why. This year marked the completion of our Vision 2026 strategy and the creation of Nurture 2030, Monash IVF's new three-year strategic plan that will inform the next horizon of patient care, focus our energy, and direct our resources over the medium term. With an industry in the midst of regulatory change, Nurture 2030 has been created to position Monash IVF to thrive in the next phase of reproductive healthcare. FY 2026 was also a year of leadership refresh, both at an executive and board level, balancing new perspectives with continuity and corporate history. We have reshaped the executive leadership team, adding strong medical leadership with Dr. Fleur Cattrall as our new CMO and Dr. Vamsee Thalluri as Chief Growth Officer.
We have also welcomed a new chief people officer and are well into searches for the chief information officer and a permanent chief financial officer. The skills matrix in both our executive and senior leadership teams continue to be curated to the evolving needs of the business model and strategy. At a board level, we are farewelling three longstanding directors, all of whom have been pivotal in the stewardship and growth of Monash IVF. Mr. Neil Broekhuizen will step down from the board today, while Dr. Richard Henshaw will step down at the October board meeting. Both Neil and Richard are a large part of the legacy of Monash IVF, and we thank them for their service over many years. I am pleased to announce the appointment of Mr. Gerd Schenkel to the Monash IVF Board. Gerd's technology, digital transformation, and customer experience expertise will complement the board's existing skills.
There is currently a search underway for a second director, and we expect to announce this appointment in course. As announced at the annual general meeting, the chair of Monash IVF, Mr. Richard Davis, will retire from the board at the October board meeting after 12 years at the helm. Richard has led Monash IVF through challenges, growth, international expansion, and a pandemic, and his calm strength as well as his humor will be greatly missed. On a personal note, his willingness to remain in the chair role to welcome me into the business has been greatly appreciated, and I thank him for his support of me as CEO and Managing Director. As we turn a new page in the business, I am excited to walk that path alongside our new Chair, Catherine West.
Catherine has been on the board of Monash IVF since 2020 and brings extensive ASX non-executive director experience, including as the previous chair of Nine Entertainment, as well as holding a deep interest in healthcare. I see FY 2026 as a year of two distinct chapters. The first was about stabilizing and resetting the business and learning the lessons. The second about restoring momentum and building the platform for our next phase. We are well-positioned for FY 2027 to convert the early momentum you will see today into deep execution and amplified return.
Monash IVF today announces its FY 2026 financial results, with stable revenue of AUD 269 million, underlying EBITDA of AUD 53.4 million, and an underlying NPAT of AUD 16.1 million. The result was below the company's June 2026 updated guidance range of AUD 17 million-AUD 18 million, and includes the impact of the write-off of AUD 1.4 million after tax of prepaid assets.
Revenue remained resilient, decreasing by less than 1%, with slightly softer domestic stimulated cycles, partially offset by growth in international genetics and ancillary revenue streams. The board has declared a fully franked dividend FY 2026 of AUD 0.013 per share, bringing total FY 2026 dividends to AUD 0.025 per share, in line with dividend policy and representing a payout ratio of 60%. After a broadly flat FY 2026, the domestic Assisted Reproductive Services, or ARS market, is showing the conditions for a potential return to growth in FY 2027, while the Asian market has an accelerating outlook. Monash IVF's second half showed growth in a number of key services and locations, as well as in market share. As part of our evolving approach to medical workforce strategy, we are combining targeted attraction of high caliber, culturally aligned specialists with deliberate investment in existing specialist practice growth.
13 new specialists joined the group in FY 2026, including three senior trainees, strengthening near-term capacity while building an internal pipeline across the doctor lifecycle. These doctors join a dynamic group of clinicians who believe that Monash IVF has a unique voice within the IVF sector. I thank our doctors first and foremost for the care and incredible outcomes they give our patients, but also for their partnership, their belief in what we are building, and for continually challenging us with a perspective that makes us better. Revenue growth alone will not be enough to drive profitability, and we have entered a period of intense focus on structural productivity to improve margins and earnings quality.
Importantly, today also marks the launch of our new three-year strategic plan, Nurture 2030, which brings together foundations built through the Vision 2026 strategy, the lessons and experience of the last three years, and the changing sector outlook. Building a clear roadmap for the next phase of Monash IVF. Looking to strengthening patient care, business performance, and long-term shareholder value. The first half of FY 2026 tested us. The second half demonstrated what is possible when we focus the organization. The work ahead is to build on that momentum and execute with consistency and performance discipline. Today, we will spend a lot of time on financial numbers, but I wanted to start with the numbers that sit underneath them, the measures that tell us who we are to our patients and why we exist.
These are the pregnancies we help create, the outcomes we deliver, the experience we provide, and most importantly, the trust our patients place in us. These numbers are not separate from financial performance. They lie at its core, inextricably linked to how the business performs and ultimately to the value we create. These are the lead indicators of our sustainable financial performance. In FY 2026, more than 5,700 people became pregnant through Monash IVF, building our legacy to almost 80,000 pregnancies since 1991, and many more since our formation in 1971. This represents thousands of journeys, hopes, and decisions that matter deeply to the more than 3,000 people who entrust us with their care every month.
Underlying the art of fertility medicine is the highest acuity science in our laboratories and the incredible skill of our doctors, nurses, and scientists who create treatment pathways for our patients and nurture our embryos.
Together, they have again increased our clinical pregnancy rates with a year-to-date rate of 42.1% for women under 43, a world-class outcome, and representing an increase of 1.8% on FY 2025. The pregnancy rate in women under 40 years was 44%, representing a 1.1% increase and sitting above the national ANZARD Registry benchmark. Our group net promoter score remains strong at 72.7 as we seek to more consistently accompany our patients on their individual reproductive journey. These deliverables are non-negotiable and lie at the heart of why patients choose us, why doctors partner with us, and why Monash IVF Group continues to have a compelling value proposition. At half year, after six weeks in the role, I made some clear observations on what I thought should be prioritized.
Six months later, it is important to revisit these priorities and show the tangible progress we have made at pace in putting these foundations in place. From live organizational dashboards to enhanced medical and executive leadership, co-design of key strategic initiatives, it has been a busy six months. The last six months have also taught me a great deal. I have continued to listen, test my assumptions, and go deeper into the business. This has sharpened some priorities, changed others, and uncovered opportunities that weren't visible to me six months ago. We now enter FY 2027 with greater clarity, stronger capability, and a strategy I believe is both ambitious and grounded in what is important.
The FY 2026 result reflects a year in which the first half absorbed a number of significant pressures, reactive domestic volume and market share pressures, macroeconomic uncertainty, deferred pricing across the eastern coast, and a cost base that had not adjusted quickly enough to the changing environment. Those pressures flowed through to the full-year result, and importantly, the full-year numbers mask the very different trajectory we saw in the second half, fueled by a coordinated plan to address and restore underlying performance, noting the pleasing resilience of top-line revenue. That work has only just begun, but it is encouraging to see the business already beginning to respond. We saw domestic volumes in IVF improve 10 percentage points in the second six months, with total group FY 2026 stimulated cycles of 11,423. Australian domestic market share grew 120 basis points on a six-month rolling average comparison to 20.2%.
We had significantly stronger doctor recruitment, progress on productivity, and greater utilization of the enhanced asset capacity. While the FY 2026 financial result reflects the entirety of what can only be described as an atypical year, the underlying direction of the business changed materially as the year progressed, and the second-half performance gives us a much clearer view of where the business is heading. Over the last months, we have begun to change the underlying economics of the business. FY 2026 exposed where the model was carrying too much friction, pressure on volume, pricing restraint, and a cost base that wasn't sufficiently agile. We have spent the second half beginning to address those structural issues rather than treating the symptoms. We are creating the conditions for growth and productivity to reinforce each other. The investment cycle has created capacity.
The strengthened medical workforce is beginning to unlock greater utilization across the network. We have returned to our normal pricing cadence, and the productivity program is now underway across the areas where we see the greatest opportunity to improve efficiency. Alongside that, diagnostics and the broader reproductive health opportunity are beginning to open clear avenues for revenue and volume growth alongside the traditional IVF cycle. FY 2027 is about taking early traction to sustained operating and financial performance with execution that must remain operationally dynamic. Domestic IVF was the area of greatest pressure in the early part of FY 2026, with stimulated treatment cycles easing predominantly in the first half. Frozen embryo transfer activity was more resilient, with a slight decline following an unusually strong FY 2025. We also began to see early but tangible benefits of operational efficiency changes with a modest 1.7% reduction in variable IVF costs.
While still early, the initial benefit marks the beginning of a broader shift towards a more efficient and productive cost base in our largest business unit. The national market share position reflects a range of underlying trends across our state markets. We have maintained our dominant position in South Australia, have outperformed in market share growth in Western Australia, and are seeing solid growth in Queensland. Victoria is showing improvement, while New South Wales remained an opportunity from a smaller base. We are well underway with targeted strategies to strengthen our position in both of these states. More fundamentally, we have reshaped the medical platform. We have increased the number of fertility specialists and trainees while also materially improving the depth and mix of our fertility capability with a stronger skills matrix, larger practices, and greater capacity in the markets where we see the greatest opportunity.
This is not simply about adding numbers. It is about building the right clinical capability, aligned medical leadership, and practice scale for the future in the markets that matter most. Underpinning this, the infrastructure investment we have already made. The closure of our original 1980s Clayton facility marks the end of an important chapter in Monash IVF's history, with Victorian surgical activity now consolidated into our Cremorne flagship, and an upgraded patient experience will occur in our new Clayton clinic opening soon, creating a more contemporary and scalable platform for patients, doctors, and our teams. The real opportunity in the domestic IVF business sits at the intersection of all of these initiatives, the infrastructure to support capacity, to unlocking utilization, and a productivity agenda to maximize returns. The broader reproductive healthcare platform is integral to the IVF journey, with patients requiring multiple touchpoints across diagnostics and other specialist services.
Bringing these capabilities together is a key differentiator for a scale provider, saving patients from a fragmented, geographically dispersed experience at multiple providers. Our opportunity is to better integrate the services, improve operational efficiency, and create a more seamless experience for patients and doctors, allowing us to deliver patient care while capturing greater value across the reproductive care pathway. Day surgery activity increased, although revenue was slightly lower, highlighting further opportunity to improve case mix, revenue capture, and scaled margin efficiencies in such areas as labor and centralized procurement. With capital investments in Cremorne, Brisbane, and Sydney theater capacity now complete, we have the infrastructure to bring the majority of surgical activity in-house. This represents a significant enhancement to our value proposition for patients and doctors whilst unlocking further opportunity in revenue capture, utilization, and operating efficiency.
Genetics continues to perform strongly, with significant growth in embryo screening across PGT-A, PGT-M, and PGT-SR, supported by stronger clinical capability and improved turnaround times. We are also seeing increasing community awareness of the role of both carrier and embryo genetic testing, providing an attractive opportunity to broaden this part of the patient journey. Ultrasound was broadly stable, with private scan volumes down less than 1%, despite ongoing industry-wide constraints on sonographer capability. Capability, sorry, capacity. Our multi-year investment in an in-house sonographer training pipeline is now coming to fruition, providing us with a differentiated and sustainable source of specialist sonographer capability, enabling us to expand our capacity for high acuity, higher value ultrasound services. We have delivered record performance across Asia, with growth in both volume and profitability as the businesses increasingly operate as a connected regional platform.
Under Dr. Prashant Nadkarni, we have moved to a unified medical and operational leadership model, creating greater connectivity across the businesses and contributing to enhanced volume and earnings performance. Kuala Lumpur continues to provide the scale and hub capability from which we can build, while Bali has established a profitable platform with further potential. Singapore and Johor Bahru are increasingly operating as a more connected regional proposition, with opportunities to leverage patient flows, clinical capability, and capacity across the two markets. The opening of the Johor Bahru-Singapore rail link in January 2027 should provide a further catalyst for connectivity and patient access across this corridor. The performance of our Asian business this year represents an important milestone in the delivery of the Vision 2026 strategy. The strategic ambition to build a scaled and sustainable international business is now evident in both volume and earnings.
Our priority is to continue strong organic growth while remaining open to future opportunities. For a further deep dive into the financial results, I will throw to Birol.
Good morning, everyone, and thank you, Victoria. It is a pleasure to be here. I think on the financials, it is important to recognize that our NPAT of AUD 16.1 million is below the guidance that was provided, and it does include the write-off of AUD 1.4 million of prepaid assets. But really the takeaway from me is the revenue piece where we saw revenues did hold up well in what was a soft market with market share losses. But our EBITDA margin declined considerably by 560 basis points to 19.8%, and we will discuss those drivers later on. We did see market share improve in the second half, and that is important. Whilst our volumes were down half on half, the market was soft, in the Australian market, but importantly, the market share improved.
But in an environment where market share was lost in the first half and with a soft market, pricing was held constant across the Eastern Seaboard locations, and that was in an environment where costs did rise, as it occurred with many other industries. So whilst volume growth is a main objective of ours in FY 2027, our efficiency program is underway with several spend areas being targeted. Our investments in new facilities has driven high depreciation and amortization expenses, as we can see, and our finance charges are also higher on elevated working capital and higher CapEx. Pleasingly, our effective tax rate is lower, which reflects the higher profits from our international business, which operate in lower tax jurisdictions. Moving on to the revenue slide.
It's important to recognize that whilst there's lots of resilience in the revenue numbers, we did see a significant decline in the domestic IVF revenue. That reflects the first-half market share losses. It also reflects the softness in the sector. But importantly, it also is a symptom of the pricing being held. The really pleasing thing for us was to see the growth in international, which was driven by strong inbound demand from international patient arrivals into Malaysia, as well as high demand in Singapore and elsewhere. We were also able to improve our revenues in genetics, PGT, and storage fees, and that reflected for me a resilience to our operating model. Revenues for ultrasound rose. That was impacted by the ultrasound launch in W.A. And we also had some improvements in pricing and mix in other locations.
Our day surgery revenues were down overall, but that was impacted by the Brisbane startup. However, our underlying volumes increased slightly. Turning to EBITDA, this bridge demonstrates some important takeaways for us. Whilst market share losses have clearly impacted us, what the chart shows is that the bigger impact is on aspects of the business that we can control more directly, which is represented by the AUD 7.8 million net price inflation graph. Our market share and volume growth remains our core goal, but we have an opportunity ahead of us to improve our EBITDA via our cost-efficiency program and via improved pricing.
The last part of that section on the, next to the AUD 7.6 million, demonstrates the positive impact of market share gains in smaller locations, which have performed well as our international operation. Our day surgery volumes in our core business is slightly higher, but case mix has impacted our EBITDA. Our ultrasound performance reflects slightly lower volumes, ongoing sonographer shortages, and start-up costs in our W.A. operation. And lastly, our non-regular items of AUD 0.9 million are detailed later in the deck but relate primarily to commissioning costs of our new facilities, Software as a Service costs relating to our patient management services program, professional and ancillary costs relating to our incidents, as well as restructuring costs relating to the changeover of leadership positions or key leadership positions.
It is also worth noting that we have a contingent asset of up to AUD 2.8 million relating to an insurance recovery in relation to these incidents. Our capital performance, initially, I will talk about the operating cash flow. We can see that our operating cash flow performance is up significantly on 2025 despite carrying AUD 4.8 million of higher working capital. The higher working capital reflects some safety stock that we brought in for potential supply chain disruptions as well as the timing of a GST recoverable. Both those metrics we think will work in our favor next year. Our cash conversion ratio of 85% is consistent with the prior year.
It is important to note that this metric basically takes our non-regular items or adds back our non-regular items and lease rental payments into the operating cash flow performance and compares that against the underlying pre-IFRS EBITDA. That is detailed in the notes below. Our net debt levels are up on the prior year. These reflect the higher levels of CapEx as well as the non-regular items. CapEx was approximately AUD 9.6 million higher than last year, and our pre-tax one-off costs were AUD 9.9 million. We note that in our ASX announcement that CapEx is targeted to drop by 50%. As I have alluded to before, we have a contingent asset in relation to an anticipated insurance recovery of up to AUD 2.8 million, both of which should improve our operating cash flow performance or our underlying net debt levels next year.
The higher net debt levels have increased our leverage ratio, as you can see below that, and lowered our interest cover ratios. However, there is significant headroom in our banking covenants in both metrics. Our reduced profitability has also reduced our returns on equity and our asset ratios respectively.
Thank you, Birol. Moving from our own performance to the broader market, reproductive healthcare is being shaped by the interplay of demographic, clinical, and socioeconomic forces. But beneath these forces sits a deeply personal and enduring human imperative, the desire to have children and build a family, which makes the dynamics of demand fundamentally different from conventional discretionary spending. FY 2026 was relatively static for the domestic market, raising questions about the extent to which economic conditions influence demand and whether that softness is cyclical or structural. At the same time, birth rates and changing demographics have prompted a broader reassessment of the sector's longer-term growth drivers. Understanding these dynamics requires looking beyond the headline market growth to what is actually driving demand now and over the next decade.
The Australian stimulated cycle market was broadly flat in 2026, but the headline masks significant quarter-to-quarter volatility in the second half, with demand swinging sharply through Q3 and Q4 amid heightened economic and sociopolitical uncertainty. IVF demand can appear economically sensitive, but it is not simply discretionary. Historical analysis of Monash IVF stimulated cycle volumes against unemployment and interest rates does not suggest a linear relationship. Affordability matters and consumer confidence is key. When household costs are under pressure, some patients will defer treatment, but the evidence suggests that this is more often a question of timing than intent. Fertility is different from many forms of discretionary consumption. The underlying biological imperative does not disappear because economic conditions become more difficult.
Patients may wait for a period of greater confidence and stability, but that does not necessarily mean waiting for interest rates or the cost of living to return to previous levels. Reinforcing this thesis are June and July Medicare market reports that have shown mid-single-digit growth. It creates a degree of lag between economic conditions and treatment activity and helps explain why demand can recover as confidence stabilizes even before the broader economic indicators fully normalize. These figures in the context of a more stable recent economic outlook is encouraging for FY 2027. In addition, early signs of demand uplift in our Repromed South Australia business following the introduction of the government's fertility rebate are encouraging, with the scheme providing a stimulus for patients who may previously have deferred treatment due to economic uncertainty. When we look beyond the current economic cycle, the long-term picture becomes particularly interesting.
One of the most important pieces of evidence for us is a recent analysis published in The Lancet Obstetrics, Gynaecology, & Women's Health in July 2026, looking specifically at the worldwide burden of infertility among women aged 35- 49, noting the average age of Monash IVF patients is 36.7. It is not a conventional industry forecast or an IVF market report. It looks at the underlying epidemiology of infertility over the last 30 years using the Global Burden of Disease, one of the world's most comprehensive global health data sets, and projects a substantive increase in the number of women affected by infertility over the next decade. The Lancet analysis points to delayed motherhood and the increasing burden of infertility at older reproductive ages as important drivers of the future burden, predicting a 50% increase in global infertility over the next decade.
For Monash IVF, the structural question is not simply raw birth rates in APAC, but proportionately it is how many of these people will need help to achieve the families they want. Our modeling combined The Lancet data with ABS population growth data and suggests the potential for Australian stimulated cycles to grow by more than 30% over the next 15 years, with the opportunity in Asia materially higher at 50%-60% due to significant shifts in socioeconomics, healthcare access, and delayed childbearing. That is why we see the medium-term opportunity as extending well beyond market uplift in FY 2027. It is participation in a reproductive healthcare market whose underlying need is evolving rapidly. In 1982, the Attorney General in Victoria initiated a committee to investigate the need for IVF guidelines around the work that Carl Wood and Monash IVF were undertaking in infertility.
Accusations of playing God were coupled with concerns regarding the ethics, morality, and safety of mother and child. In 2026, the ARS industry is again being asked questions, good questions, and in 2027 and 2028 will transition from a model of self-regulation to one that aligns with the broader healthcare sector, introducing a set of national standards administered by the Australian Commission on Safety and Quality in Health Care. The ARS industry is entering a period of significant change, an inflection point that will shape the sector for years to come. Monash IVF Group welcomes the move towards stronger, nationally consistent standards, with the reforms expected to create greater transparency in reporting around safety and quality across the industry.
We expect this to fundamentally reshape industry dynamics over the next 12-1 8 months, with greater transparency placing increasing importance on the depth of clinical governance, quality systems, and performance of individual providers. We are actively engaged with government, regulators, and industry stakeholders in shaping the reforms, and Monash IVF Group is well-positioned to meet the new requirements without further operating investment, building on the mature safety and governance capabilities already embedded across the group. Nurture 2030 strategy carries forward the strengths and investments of Vision 2026 whilst bringing a sharper focus to the changing reproductive healthcare landscape and opportunity ahead. At the heart of Nurture 2030 is a simple belief. Creating value for our patients is the starting point for creating value across our business. Patients are increasingly looking for more than a successful clinical outcome. They want care that is connected, personalized, and easy to navigate.
They want confidence in their clinicians, access to leading science and technology, and a felt experience that supports them through a life-changing journey, not just a singular scan or egg collection. That starts with our doctors. Our doctors are at the center of the clinical relationship and are fundamental to delivering the outcomes, trust, and experience that patients value. Nurture 2030 is therefore about creating an environment where our doctors and their patients can thrive, supported by great science, infrastructure, and teams. When we create value in the relationships with our patients and doctors, we create a stronger business. That is the Nurture 2030 opportunity. To put patients at the center, empower our doctors, unlock the potential of our people, and translate that into sustainable growth and long-term value for shareholders. Vision 2026 made a number of important investments in the future of Monash IVF Group.
Many of these initiatives are now yielding tangible benefits across the group. Stronger growth and profitability in Asia, increased surgical infrastructure and capture of surgical activity, and a substantially strengthened medical workforce with greater capacity, a broader skills matrix, and new medical leadership structures. There have also been significant advances in science and clinical outcomes, including a material uplift in pregnancy rates, which in 2021, at the beginning of the Vision 2026 strategy, were at 34.6% for women under 43 years, compared to our latest result of 42.1%, meaning a patient is 22% more likely to become pregnant per cycle than they were five years ago. Together, these capabilities are creating a more mature, connected, and increasingly data-driven business, providing a strong platform for the launch of Nurture 2030.
Nurture 2030 takes these proven foundations and brings them together across a broader ambition to nurture possibility across every reproductive health journey. We are evolving from an episodic IVF model to a more connected reproductive healthcare relationship, moving from transactional treatment episodes to an ongoing connected relationship across the reproductive journey, increasing not only connection, but also lifetime patient value. At the center of this is the connected patient ecosystem, using our network diagnostics, evolving digital capability, and multidisciplinary expertise to make the reproductive journey simpler, more personalized, and more connected. Clinical excellence and safety becomes an even stronger source of differentiation as the sector evolves, with higher standards of governance, transparency, precision pathways, and continuous assurance. Industry-leading talent recognize that our ability to grow is ultimately enabled by the quality and depth of our doctors, scientists, and people.
We are building a strategic medical workforce across the full doctor life cycle, attracting, developing, and retaining culturally aligned doctors who want to lead our clinical model and build their practice with Monash IVF. Science, research, and technology builds on one of Monash IVF's enduring strengths, translating scientific innovation into better clinical outcomes. Our legacy of laboratory innovation is already reflected in the significant uplift in pregnancy rates, and we are continuing that tradition through initiatives such as Felix Sperm Separation, an exclusive technology that reduces sperm DNA damage and is now being rolled out across the group. Alongside this, we are building our capability in connected systems, emerging technologies, research partnerships, and AI to ensure science continues to translate into better outcomes, better patient experiences, and productivity gains. Sustainable growth and performance is the commercial expression of this entire Nurture 2030 strategy.
We do not see growth, productivity, and returns as separate from our patient medical scientific ambitions. They are the outcome of getting these things right. Every other pillar strengthens the engine. Better outcomes build trust and demand. Stronger medical capability drives capacity and market share. A connected patient ecosystem drives patient volumes. Science, technology, and data improve both care and productivity. Our role is to bring these capabilities together and convert them into sustainable growth and stronger shareholder returns. This strategic plan is underpinned by disciplined investment and a relentless focus on productivity, building sustainability from our core, strengthening our clinical and patient proposition, and creating the capability to grow. Our belief is that these objectives are not competing priorities but synergistic. Starting with the patient and designing care around better outcomes and less friction should also create a more efficient and sustainable way to deliver care.
Nurture 2030 is designed to be a living strategy, giving us a clear sense of direction while allowing us to adapt as our industry rapidly evolves. We enter FY 2027 from a very different position to where we started FY 2026. The first half tested the business, but the second half galvanized us and showed us what is possible when we bring the right capability and discipline to the group. The market has stabilized, patient activity is improving, and we have begun to rebuild momentum and market share. The last six months marked a shift from reactivity to building for the opportunities ahead, resetting the operating model, and creating conditions for the Nurture 2030 strategy to deliver its full potential. FY 2027 is where we activate these synergies to drive performance and margin growth, converting the improving market environment and the investments already made into stronger performance.
That starts with continuing to build the volume and market share, particularly in Victoria and New South Wales, supported by a return to disciplined pricing and greater medical capacity. Underpinning this is a sharper focus on productivity, maximizing the value of our network, and improving workforce and asset utilization alongside strong, disciplined capital deployment, with Capital expenditures expected to be less than 50% of FY 2026. The objective is not simply to grow the business but to make the platform increasingly productive as it scales. There is hard work ahead, but there is also a renewed sense of purpose across the organization. The distractions of the first half have given way to greater focus, discipline, and confidence in the path ahead. We entered FY 2027 with a new vision informed by data and strategy, and most importantly, driven by a clear plan and a renewed sense of agency.
Our people are the life force behind this vision, and I would like to thank each one of them for their unique contribution to our patients and to our great organization. In 2023, The Economist article, "Making Baby-Making Better," asked a fundamental question about the future of IVF: Can science make IVF more effective, less burdensome, and more patient-centered? The first 50 years of IVF, which began here at Monash IVF, were about learning how to make embryos, and if it didn't work, trying again. The current era is about understanding why some embryos become babies and others don't. Moving from keep trying to precision medicine, understanding the patient, the biology, the embryo, and using science, genetics, and technology to guide more exacting treatment.
IVF may be a mature clinical technology, but fertility is still an emerging science, and that creates significant opportunity for Monash IVF, that has been at the forefront of this science for more than half a century. Our strategy is about unlocking the alchemy of IVF, where science, technology, and human expertise turn possibility into outcomes for all of our stakeholders. With infertility expected to rise and demand for fertility care continuing to grow worldwide, the driving patient value proposition is not simply be the best provider at trying, but to be the best provider for me, the provider that understands my story, my biology, and what matters to me, and uses the best medical science to give me everything I want and need. It is that combination of personalized care, precision medicine, and clinical leadership that will differentiate Monash IVF and create sustainable growth and value.
Monash IVF holds a unique place in reproductive healthcare worldwide, a legacy built on courage, scientific curiosity, and the determination to solve what others thought impossible. Those qualities remain deeply embedded in our people today. Nurture 2030 is our opportunity to harness that legacy, combine it with the lessons we have learned and the capabilities we have built, and to lead the next phase of personalized reproductive healthcare, nurturing possibilities for our patients and for our shareholders. I'll now hand back to Becky for the Q&A section.
Thanks, Victoria. Just as a reminder, questions can be submitted through the Q&A function. We will take them in order and address as many as time allows. The first question is from David Stanton from Jefferies. What is your best guess on market growth rates in FY 2027 in Australia?
Everybody wants numbers. Thanks, David. Look, I think there is two aspects to that. There is what we see as the outlook, which was all the slides, looking at some of the predictors. We think that FY 2027 will return the ARS industry to growth, and we are seeing early signs of that. I think what we have seen month-on-month to the end of FY 2026 is where some of it, there is month-to-month variability. But I think what is important for us is our growth strategy is not reliant solely on the domestic outlook, the broader market outlook. We are actually focused on driving our own market share increase with all of the things we talked about in terms of patient value proposition, really growing our existing doctors, but bringing in culturally aligned and strategic doctors into the business as well. So it is a combination.
We are not going to give a specific number today, but we will potentially give more color on that and how we are tracking in the first half of FY 2027 towards the annual general meeting.
The next question is also from David Stanton. What was the change in new patient registrations in second half FY 2026 on PCP?
Again, we saw quite a bit of change from first half to second half in what we call NPRs, which I guess I can use that term, in NPRs. We certainly have seen different dynamics driving it in different states. As I said before, we've had a recent uplift in South Australia in inquiries and new patient registrations based on the stimulus from the government. In different states, we see even different reactions to the macroeconomics. New South Wales in the New South Wales market more broadly than us was very much more hit by market share declines in the second half of 2026. We saw a decline in new patient registrations there. But in Western Australia, massive uplifts in new patient registrations.
I would say overall in second half FY 2026, we saw a significant uplift, which then with conversion rates that are improving all the time, and that's one of the key areas we're working on with our doctors is conversion rates. They really tracked, new patient registrations tracked very favorably in line with market share and cycle growth.
Also linked to new patient registrations, this question's from Tom Godfrey from Ord Minnett. What is MVF seeing in terms of new patient registration growth in July to August?
Yeah. Similar, Tom. Hi, Tom. Similarly, we're seeing really good early indicators in the first bit, noting that August is very fresh. We're still looking at the numbers for that. But yeah, it's certainly looking like there's been some uplift in new patient registrations in the first bit of FY 2027 as well as stimulated cycles.
The next question's from David Stanton. Are you guiding CapEx to decline 50% in FY 2027 on FY 2026 or FY 2025?
Yeah. I would say decline more than 50%. I am handing CapEx out with an eyedropper, David. It is based on FY 2026 number. So FY 2026 was obviously the end of our investment CapEx cycle with the completion of our large infrastructure projects. With that dropping away, our focus this year is very much on utilization and asset optimization rather than any further CapEx. It will really be maintenance CapEx. We need to be really clear, though, that part of it is really also making sure we have got the operating leverage. If there is a massive uplift in volume, that we can be agile to that as well.
Another question from David. In FY 2027, will depreciation and amortization increase compared to FY 2026?
Thanks for that. It should remain fairly steady. To the extent any increase, it is going to be quite modest.
Okay. Also from David. In FY 2027, will net interest expense increase compared to FY 2026?
Look, we'll probably take that on notice, but I would imagine it would be broadly similar.
Thanks, Birol. The next question is from Tom Godfrey from Ord Minnett. The previous sustainable efficiency program targeted 200 basis points of EBITDA improvement. How is the current program tracking relative to this?
It's in its early stages. We'll get some more traction as FY 2027 unfolds.
Also from Tom. What are the key targets or benchmarks for us to judge the success of Nurture 2030?
Thanks, Tom. I think you can look at this, or the way we're looking at it is very much FY 2027 and then 2028 and 2029, which obviously with the dynamic environment both the business are living in but also the macro environment. Certainly for FY 2027, it's three main things. It's organic volume growth, it's market share, and it's EBITDA margin and cash conversion. I think that speaks to all of the things that we're trying to bring together that will then lay the basis for that amplifying and giving us the operating leverage on the balance sheet to really look at any opportunities that might come up for more inorganic growth down the track.
I think, though, if you look at what I would say, this is just me editorializing my own views of how we'll know it's successful at the end of 2030, is a bit more esoteric. It's to say when you take a program of work like the operational excellence, the market share growth that we're targeting, and it becomes iterative, it becomes self-generating. We're already seeing doctors approach us. We're seeing patients choose Monash, as well as choose our doctors. When it becomes self-sustaining and generative, I think that means that the strategy tackled the right fundamentals, asked the right questions, and we were able to deliver then, which becomes that self-generating momentum instead of us having to design and execute as closely. Then we can move on to finessing and some of that inorganic growth opportunity.
That's our last question. Thank you to everyone who joined today and for your questions. The FY 2026 results presentation and accompanying materials are available on the Monash IVF Group website and have also been lodged with the ASX. Thank you again for joining us.