Well, good afternoon, everyone, welcome to the 2024 annual general meeting of your company. My name is Gordon Naylor, I'm very pleased to address this meeting as Chair. Firstly, extend a very warm, warm welcome to everyone in the room, also to the folk online to this, which is our third hybrid AGM. I wasn't quite sure how these were going to work. They're sort of a by-product of COVID, I think in practice, they've been quite effective because they allow us to engage directly with people here in the room, plus it allow an opportunity to engage with shareholders who are unable to attend in person.
I'd just like to remind everybody, that the presentations provided today were lodged with the ASX prior to the commencement of the meeting and are available on the company's website. The company secretary informs me that we have a quorum present. I therefore declare the 2024 annual general meeting of Medical Developments International to be open. Before we proceed with the meeting, I have a couple of quick housekeeping points. Please turn all mobile phones to silent mode. Recording devices and cameras must not be used during the meeting. I would note that all of the content will be made available online after the meeting, including a recording of the meeting.
For those of you here physically in the room, in the event of an emergency, please follow the emergency exit signs and follow the instructions of the venue, venue staff so that we can make a safe exit in that event. In the event that we experience technical difficulties with the online platform, I'll pause proceedings. If the issues are not readily resolvable, we'll have to continue the meeting in the traditional face-to-face format. The notice of meeting was sent to shareholders in the ASX on the 20th of September this year. I will take that notice as read. Today's meeting will include two presentations before formal proceedings, which this year comprises six resolutions. Before I move to introducing your directors, can I ask that you note the disclaimer slides, which contain important context for the meeting today?
Introducing your board, I think we're catching up. As I mentioned before, I'm pleased to be the Chair of MVP, but I also note that I am retiring by rotation and standing for election at this meeting. I'd now like to take a moment to introduce the other directors of the company. If I could just ask the directors to identify themselves in turn. First up is Dr. Russell Basser. Well, good. Thank you, Russell. Next, next to Russell is Mr. Richard Betts.
Afternoon, all.
Richard is retiring also by rotation, and he's standing for election at this meeting. Richard will additionally assume the meeting chair role during the discussion of my candidacy as director. Next to Richard is Ms. Christine Emmanuel-Donnelly.
Thanks, Christine. Next to Christine, Mr. Leon Hoare, and at the far end, Ms. Mary Sontrop. Thanks, Mary. I'd also like to introduce our Chief Executive Officer, Mr. Brent MacGregor. Brent will provide a business update today as part of the proceedings. Also attending is Ms. Tara Eaton, our Company Secretary, and our Chief Financial Officer, Ms. Anita James, who's back over here. Finally, Ms. Melanie Sutton, who's representing the company's auditor, Deloitte. Before commencing today's presentations, a word on the use of the Computershare meeting platform for those of you online and voting. If you're using the Computershare platform remotely, all attendees can watch a live webcast of the meeting. In addition, shareholders and proxies can ask questions and submit votes.
If we experience any technical issues today, as I said earlier, a short recess of adjournment or adjournment may be required depending upon the number of shareholders being affected. If this occurs, I shall let you know. If we're unable to easily resolve the technical issues, the meeting will still proceed, as I mentioned before. Given that we intend to record to share a recording of today's meeting on the ASX platform in the next day or so, even in the event of technical issues, online shareholders will still be able to view the meeting. Online attendees can submit questions at any time. To ask a question, select the Q&A icon. Type your question into the text box, and once you've finished typing, just hit the send button to transmit the question to us.
Please note that while you can submit questions from now on, I won't address them until the relevant time in the meeting. Please also note that your questions may be moderated, or if we receive multiple questions on one topic, amalgamated together, as you'd expect. For online shareholders, to ask a verbal question, please follow the instructions written below the broadcast. If you are asking a verbal question, either as an online attendee or if you are in the room, please introduce yourself, before asking a question. That's, that's important to us. On the voting, in accordance with the company's constitution and as set out in the notice of meeting, we have determined that voting on each of the resolutions will be conducted by a poll rather than on a show of hands.
This law allows all proxies to be considered and ensures votes are counted accurately. I do now declare that poll to be open. The final results of the polls will be available later today on the ASX website and on our company website. Only shareholders, proxy holders, or appointed representatives are entitled to speak or vote at this meeting. Only shareholders who are entitled to vote at this meeting may cast a vote on a resolution. As chair of the meeting, and as detailed in the notice of meeting, I will vote, subject to abstentions noted in the notice of meeting, all available undirected proxies in favor of each resolution. For those attending the meeting in person, you can cast your vote by filling out a blue paper voting card.
If you have any question, please see a Computershare team member at the registration desk at the back of the room. Shareholders participating in the meeting via the online platform should just press the vote icon. All resolutions will be activated with voting options. To cast your vote, simply select one of the options. There's no need to hit a submit button for these, as your vote is automatically recorded. You will receive a vote confirmation notification on your screen. You can change your vote on the platform up until the time I declare voting closed. I will give you a warning before I move to close voting.
If you have any questions about casting your vote online, please refer to the online platform guide or call us on the number set out in the guide or on the screen in front of you. I'd like now to reflect briefly on the company's progress over the last year, and I'll then invite Brent to provide an overview of the company's operation. Despite falling short of our expectations in FY 2024, we did make very meaningful progress in the year. Revenue, margin structure, earnings, and cash flow are trending positively. You will have seen our quarterly report, which I think we published a couple of days ago, which is an encouraging indication that we are on track. Whilst we've...
Sorry, the financial outcomes also for FY 2024 also have great relevance to executive compensation, which is an important matter that the board considers, and I'll talk more about that in the context of the remuneration report when we come to that resolution. Whilst we have moderated our expectations with respect to the rate of growth, we remain confident in the long-term opportunities of the company. Difficult reductions in the base costs of the company, as well as updating our commercial terms across the sales portfolio, are driving these improvements. In the year ahead, we do expect to see further financial improvements as the changes that Brent and the team have implemented take effect. It is expected that the company will achieve positive operating cash flows by the end of the current financial year, and as I said, we're seeing steady progress toward that, toward that objective.
I would like to thank our shareholders for their continued support, and will now hand over to our CEO, Brent MacGregor, to provide you a more granular view of the business and its growth strategy.
Thanks, Gordon, and good afternoon, everybody. I'm pleased to be presenting to you today as the Chief Executive Officer of our company. As Gordon said, I'll provide you with an update on MVP's performance over the last year and the progress we are making in executing our strategy. The group delivered strongly improved financial results in FY 2024, and those were reflecting efforts across the organization to grow volume, to improve margins, reduce costs, and ultimately to deliver operational improvements. While we delivered good progress, we did fall short of achieving our revenue aspirations for the year. A longer-than-expected sales cycle for Penthrox in the Australian hospital segment and seasonal demand softness in the Australian respiratory market resulted in lower volumes than planned.
Notwithstanding these challenges, we achieved success in overseas jurisdictions, and we remain confident in the long-term growth opportunities of our lead products, and we are encouraged by the positive momentum that we've achieved thus far. The group's near-term strategic focus is to increase the penetration of Penthrox in existing markets and to continue to grow its respiratory segment through market share gains, particularly in the U.S. Longer term, the group seeks to enter new and attractive markets for Penthrox, including in the U.S. The group made good progress in its strategy in FY 2024. Let me walk you through our key priorities here. The first one was about improving margins through pricing and efficiency.
Higher Penthrox pricing, particularly here in Australia, but also through enhanced partner agreements and efficiency benefits, delivered a gross margin improvement of 5 percentage points and a reduction in cost of AUD 5 million in the year. These operational efficiency initiatives that were implemented in FY 2024, they'll drive a further AUD 3 million-AUD 4 million reduction in costs in FY 2025. The second priority was increasing penetration of Penthrox in the Australian hospital emergency departments. Here in Australia, Penthrox was listed on protocols in 44 new hospitals, and the total number of purchasing hospitals increased by 68 over the last year to a total now of 244.
In the period, Penthrox was also listed on the South Australian Medicines Formulary for use in emergency departments, as well as being included and adopted on the Queensland LAM, the list of approved medicines. Albeit from a low base, volume in the hospital segment grew by about 30%. The strong lead indicators are yet to be fully reflected, however, in volume growth, due to that longer sales cycle that I mentioned earlier. Our learnings to date will inform our commercial and our medical engagement activities in the year ahead, as we look to accelerate penetration of this large and attractive segment. The next priority was to grow Penthrox in Europe. The group reported a record European annual in-market volumes in FY 2024, with the Nordic region, France, and the U.K. all performing well.
Early in the year, we transitioned to what we referred to as a capital-light operating model in Europe, driven by essentially scaling back our in-market promotional activity in France, the result of which it significantly reduced our cost to serve. In the face of this reduction, we were encouraged by the growth of Penthrox in France in FY 2024, which is a testament to the strength of the product once it's adopted in an institutional setting. We have since advanced negotiations with partners for Penthrox distribution in France. What I can tell you is, we just informed you in the quarterly report, for Switzerland, we have finalized a new distribution agreement with a new partner called Labatec in the recent weeks, and we expect that to become operational early or in mid-Q3 of this fiscal year.
Preparations for submission of the MAGPIE pediatric study data to the European Regulatory Agency also occurred throughout FY 2024, and our dossier to lower the age indication to 6 years of age was submitted on August 14th. That was to the HPRA in Ireland. Due to regulatory approval of our submission, would expand the addressable market and could also address a barrier to Penthrox entry into some ambulance trusts in the U.K. Speaking of the U.K., the U.K. is our largest existing market for Penthrox outside of Australia, and in that regard, we've extended the agreement for distribution of Penthrox in the U.K. and Ireland to the end of 2027. That agreement was due to end at the end of next calendar year.
This extension will deliver improved economic terms for the group, starting in this current fiscal year, and provides a strong foundation to maximize the potential of a broader age indication in these markets from FY 2026. The fourth priority was to continue to grow in the Respiratory Segment. I'll only say a few words on this front. Our key target growth market in the Respiratory Segment remains the U.S. market, and here we delivered robust growth in the past year for the third consecutive year, in fact, with revenue in FY 2024 up by 37% over the prior year. Lastly, our priority was to advance a U.S. market entry for Penthrox. Now, in October of 2023, we had a positive meeting with the US FDA, called the Type C meeting.
This meeting provided increased clarity on the clinical pathway to US market entry, and from this, we've been able to develop more fully our estimates of project costs and timelines. Nonetheless, we announced in April of 2024, that following further evaluation of resourcing requirements and funding options to progress market entry plans, we would pause the commencement of the next phase of investment in favor of focusing on our underlying business. Aligned with the delayed commencement of further US market entry activity, investment in the group's next generation device has also been paused. These plans will be recommenced at the appropriate time. We remain very confident about the attractive commercial opportunity that exists for Penthrox in the U.S. Our view on that hasn't changed. Overall, I'm very encouraged by our progress, and I look forward to continued momentum in the year ahead.
Speaking of which, in terms of outlook, we do expect positive momentum in margins and earnings to continue in FY 2025, with underlying EBITA to be strongly improved on last year, driven by higher average Penthrox prices and operational efficiencies, representing about AUD 3 million-4 million. Lastly, positive operating cash flow is expected to be achieved by the end of this fiscal year. Thanks. I'll hand it back to you, Gordon.
We'll now take questions from shareholders. We'll start with shareholders in the room, and then follow through with broker online, and then come back to the room after that, if there's any more questions. What we found in the last couple of years is that actually we end up with quite a fluid discussion, which is good, and hopefully, that will happen again today. To start off, are there any questions from here in the room? If I could just remind you to say your name and, if you represent a company, at the beginning, that would be helpful. Any questions here? Yep, got one down here. We've got a microphone behind you. We could ask you could use that, and then, that'd be great.
Thanks. My name's Greg Maber. I'm here... I don't have to get up.
No, we can see you.
I'm here in the capacity as the trustee of my own super fund and my family's fund. Basically, this is the first AGM I've been to, and I came along to ask one question. The product you have is brilliant. It gets fantastic exposure, it gets so much... I don't know what you call it, I think it's illegal, where you get product placement in all manner of things for free, in sort of usually heroic circumstances of sportsmen, you know, getting knocked out or you get so much exposure, Bondi Rescue, whatever. I spent a lot of money. In 2017, I bought 20,000 shares. I don't, can't remember the price, but I got it there. Can you hear this thing?
Yeah. Yeah, good.
I bought 20,000 shares. All up, it cost me close on AUD 100,000. I think I forget what it's worth today, but 3/8 or 4/5 of FA. Guys, my main question to you is: with all these glowing reports, the product is unbelievably good, how could you stuff it up so badly that I've lost 98% of that investment? Seriously, I'd like to hear how you managed to stuff it up that badly.
Well, just in terms of responding, you're gonna see us stand up here to answer your question, because we have to be, we have to be picked up by the camera. I'll have a first response, and then I'll, I'll, I'll see if.
Is there any confusion about my question?
No, no, no.
What I'm asking.
Your question, your question is quite clear. It's pretty good.
Okay, good.
Believe me, there's a few of us in the room who've, who, who have lost money on this as well. It's a, it's a good question. You're absolutely right. The, the product's got this sort of, almost an aura in this country. You know, it's very well regarded. You talk to people, you, you know, most people know about the product. It's probably one of the best-known products across, you know, maybe not Coke or something, but it's, it's very well known across the country, and it has all these positive, things associated with it, such, you know, helping people out in pain and... There's, there's no doubt about that, right? That's pretty clear. The question a bit, though, is: how do you, actually turn that into value, make money out of it?
The product has been used for a very long time in the ambulance service, the emergency services in this country. That's mainly where you're seeing it. It would be fair, I think, to characterize it as a pretty mature product.
Yeah.
Right? We've got pretty high penetration of it in this country. Varies a bit between the ambulance services, depending upon their protocols, but it's used, carried in pretty much every ambulance in Australia. The problem with that is it's fairly hard to get much growth, right? You need to look elsewhere, and we've got two broad avenues. One is other opportunities within Australia. For example, we're working very hard to make it more commonly used in hospitals, particularly in emergency departments. So that when you rock up to a hospital, and you've, you know, often been using the Green Whistle, in the ambulance, often that's about as far as it gets, right? It's not used in hospitals. We see opportunities in certain emergency procedures, or, sorry, certain clinical procedures like dental procedures.
The other big growth avenue is basically replicate the model outside Australia, right? The problem we have is that it's been... the opportunities for growth are there, it's just slow. It's worth noting that this company, certainly as far back as we can see, has never really made money. If you look at the underlying cash flow performance, underlying profitability, and you go back half a decade or so, it's never really made money, despite the fact that it had this incredible... The product itself has this incredible image. So a fair bit of what we've been doing for the last few years has been fixing that. So we're pretty close. We're pretty close to actually getting to the point where we're, you know, ideally profitable and cash flow positive, and then we've got a platform to grow from there.
There's this sort of, been this sort of disconnect, if you like, between the image of the product and actually making any money out of it. Product's probably been underpriced here, right? The, you know, the bench spoke about this, that we've, we've been, you know, really trying to get that house in order, of getting a decent price for the product that covers the real cost of manufacturing a modern, modern pharmaceutical. That's, you know, we're going... Well, we've actually got decent margins now. We're trying to grow the volumes, so that, that, that, that, those margins will cover our fixed struc- fixed cost structure. It's all going the right way. You know, believe me, during that time, the share height- the share price has taken an absolute flogging.
We're all pretty acutely aware of that. We understand your question. It's one we ask ourselves quite a bit. I think, you know, I, I think we're doing everything we can, to, to address it. There was a fundamental disconnect, if you like, between the product-
Mm.
... which is a really good product, and we all believe in the product. We've got a whole lot of, you know, people, particularly, you know, including on this board, who are a lot smarter than what I am and particularly understand the clinical and medical side of things, you know, who look very closely at this stuff, and it's a great product. It really is good. There was just this disconnect between the characteristics of the product and actually making any money out of it. That was the reality. We've spent the last few years fixing it, and we're not quite there yet.
Apparently not.
No, that's right.
Look, I, I, I think that's quite reasonable, you know, and I understand what you're saying, but the disconnect is so vast, and the real disconnect is in the value of the shareholders' money. I mean, - 98%, not very impressive at all.
Yeah, completely agree.
I should've let it go years ago, obviously. I still have faith in the product. If I, if I could just sort of throw in a couple of throwaway lines. You mentioned a lot about growing the product or growing other opportunities. Why don't you just stick with what you do well? Don't go for the growth. You know, I know I'm, I'm biased. I have a company that's a little company. It's the mouse that roared. We're very well known. We know yours. You've got our equipment. I'm familiar with your factory out there. I, I first ran into it in Springvale, a little tin shed.
I said, "These guys have got a really good thing." So when it came to float, I took it, and I've watched it all the way along, except for the last two or three years, because I just get so disgusted. I can't even be bothered looking at the price. Why not forget the God of growth? Seriously, just give it a miss. Do what you do, and do it well, and cut your bloody costs and overheads.
Yeah.
Every time you got approval for a new country, and it was fantastic, every second month, something came out. We've just got the approval from Bolivia or God knows what, the share price went down. You know, you talk about a disconnect, this is ridiculous. Every time there's an approved product, it goes down.
Yeah.
My little tin pot company is 43 years old, started in a bloody shed. It's been profitable for 43 years, and it's still going.
Yeah.
It's also very well-regarded and a great reputation, all the rest of it. That's why. We have never chased the great God of growth. It invariably destroys the company. Please, stick with what you do, do it well, and forget the outside growth. Go with what you've got. It's brilliant.
Yeah. Thank, thank you. I think, you know, you'll find that if you look at the detail, that's exactly what we've been doing. Particularly over the last year or so, there's been a pretty big pullback. Brent and the team are very focused. You know, they are... We haven't, you know, certainly haven't lost our growth aspirations, but the focus is very much upon getting the basics right. You know, if you can't, you can't make money in your home market, and as I said, for a long time, we haven't, is the reality, then you've got no, you've got no, you know, you've got no right really to pursue, pursue other things. Yeah, no, no argument at all. It's just there's this, you know, this disconnect between what we're doing and what's happening with the share price.
I think it's a good explanation. Thank you.
Thank you.
I too, off to earth, I'm gonna shut up for the rest.
Well, feel free- if there's something else that prompts that question, you know, knock yourself out. Other questions? Down here.
Good afternoon, Chair. My name is Peter Ray. I'm a shareholder. I'm also holding proxies for the Australian Shareholders' Association.
Excellent.
Thirteen shareholders and 143,933 shares. Like this gentleman here, I've, the entry level for me is well above the, the current share price, and obviously, I'm concerned at that. Just picking up a little bit on the discussion there, could you perhaps, give a little bit more detail on the, the plans to enter Penthrox into the U.S. and where that's at? Is that likely to, to generate significant volumes of revenue once you, you do get to a stage when that is, to, to, grow earnings quite a bit more?
I'll let Brent answer that. He's more familiar with the detail.
Yeah, thanks for the question. In fact, it, it aligns a bit with your, your colleague and the question he was asking as well. We still see the potential for the US market, for I think, reasons that'll be obvious to everyone about the overall size of that market. By the same token, we're trying to be very prudent in terms of what the cost could be to enter that market. Not to get so much into the weeds, which you probably don't desire to hear, but we have preclinical work that'll have to be done before we can go into the phase III.
The only reason I say that is because for us, as a small Australian company, we're gonna need a partner with whom to do that, and we're not in a position to do that just yet, so we aren't embarking on that pathway until that pathway sorts for us. Now, when it can happen is not clear. It's not gonna be in FY 25. Will it be in FY 26? I don't know. It won't be FY 25. I think as Gordon was saying in an answer to the previous questions, we're not embarking on that path until the financial pathway and a sustainable financial pathway is clear for us to do it.
I mean, the, the, the normal model in pharma is that you start in the U.S., right? Most, most product developments are aimed at entering that market because it's big, it's fairly homogeneous, and they're relatively price insensitive because of the structure of the, of the, of the healthcare system in the U.S. The reason for that is, yeah, as I said, it's a, it's a, it's the big, it's the big goal. The question for us is: does it make sense at this time for us, which is to the point of focus-... The other piece is that the U.S. is quite a complex healthcare system. So if you, you know, It's sort of manageable if you know your way around, and if you've got the resources to deal with it. It's pretty hard from here.
Hence the need for a partner, and hence for a, a, you know, a considered approach into that market. The, the right, the pot of gold's still there. We're just sort of thinking a little bit about our timing and quite how we tackle it. Both Brent and I have worked, and I think probably a few other people here too, have worked in that market. We know it pretty well. You know, I lived in the U.S. for a long time. Brent, obviously the same. We know it round, but we know our way around there, but it's, it's non-trivial to do an entry. It needs to be done in a thoughtful way. Other questions? Can I see if we have any questions online?
No.
All silent. Righto. Other questions here? Here we go. Down here.
David Warren, a retail shareholder. I note that you've been predicting that you're gonna get your earnings cashflow positive or approaching cashflow pos-positive by the end of the year, this financial year. Can you drill down on, a bit on that for me, please? Exactly what you mean by that. I know you've got about AUD 15 million in the bank at the moment. Are you expecting to have AUD 15 million in the bank at the end of June, or will it be further? Will you be going backwards in the next two quarters and then maybe in the, the last quarter, breaking even? I, I just want you to-
Yeah. I'll give you.
Fill that out a bit.
... a non-quantitative answer, which is it'll be a bit less than the 15, but not much. It all depends on the shape of the curve, right? So we monitor it pretty closely. Just to be quite clear, cash flow from ops is the cash that comes into the company, less the cash that goes out for actually running the business, right? Everything except investments in capital assets and things like that. So we, and we monitor it every month, you know, we check it. Now, you know, it's, at the moment, it's, it's just below the line. We're very moderately cashflow negative, but operational cashflow negative at the moment. The trajectory looks pretty good.
We're comfortable that by the end of the year, then we'll, we'll be, we'll be returning numbers which are positive on a monthly basis. Of course, it's the area under the curve, which drives the balance. As I say, it'll be a bit less than what we started with, but hopefully not much.
Thanks for that. Just a, a follow-up on that. In terms of... It's okay.
If it comes back to you, yell out.
We'll talk later.
Yeah.
Sure, yeah.
Yell out. Any other questions in the room? Do we have anything online, Anita, you're-?
Yes.
Oh, we have something online, don't we?
Yeah. What about the Canadian market?
Canadian? Oh, we've got a. He's qualified.
I don't know if we've got a real Canadian.
Is that true? Okay.
Yeah, the Canadian market is coming along at a, I would say, a steady pace. Do we wish it was coming along faster? Yes. It was a bit of a relaunch in Canada because the product was licensed there in the past with Purdue Canada as the partner. Purdue Canada stopped being our partner February of 2021, and we established a new partnership at the tail end of 2021, beginning of 2022, called Paladin. Their focus is on the procedural setting, so their entrée into what they see as the hospital segment is through procedural settings, specifically, OB/GYN, urology, and something you refer to as cosmetic dermatology.
Right now, I think their sales, their unit sales and market sales are somewhere between 2,000-3,000 units per month. Not a number that we feel is, you know, terribly exciting. I look at... Yes, I look at the place I'm from as being Australia, plus around 40%. When you look at population, the market structure, not so different than here. Level of affluence, very similar to here. We believe there's a lot of upside with our partner that can come, not the least of which is from the ambulance service, where they do not have a focus right now. The Canadian market is coming along. We interact closely with the, with our partner there. We're gonna have a, a visit with them in probably around February of next year.
I'd like to see things going a lot quicker than they are.
Thanks, Brent. Yes, come back to you. Here we go.
Just wanted to... First of all, congratulations on right, lifting the price of Brent, of the Whistle. Is there any potential to increase that further? 'Cause that's clearly been an issue for a number of years. You've been slow to increase the price, and that's one of the, the primary reason why your, your, your revenues are always shorter than your costs.
Yeah. I'll give a quick answer.
Yeah.
Yeah, I think the short answer is yes. The very least we need to do is maintain pace with inflation.
Yeah.
Like, and it, and that's become relevant because we've experienced inflation here for the first time in some years, so that's the least we should do. We've actually found that. It's not just Australia, by the way. 'Cause, as Brent mentioned this, we've got, you know, a few agreements outside Australia as well, which, you know, really hadn't been updated in terms of pricing, which is being addressed. I think we sort of just need to get it to the point where it's a regular process. You just manage a company like you should do, and it's just not sustainable otherwise. Now part of that is about making sure the customers understand the value. You know, running a proper customer service operation.
Then, you know, what we've found is that this has been reasonably well accepted once you explained it. There were some fairly ugly conversations at the beginning, when you're doing a bit of a catch-up. Yeah, well, I think we're probably through that now, and we sort of, our pathway would be to run a, a steady program. It's, it's not price gouging or anything bad like that, it's just, just running a business properly and making it sustainable because it's in no one's interest. You know, this company continues to be cash flow negative. That's not helping anybody, including, including the shareholders, obviously. Any other questions here or online? We're good. Good. Thank you. Thank you for those. Good.
You know, we, we, we don't much like the share price either, is, is sort of the short, the short version. First item of business, formal business then, is the tabling of the company's financial reports for the year ended 30th of June, 2024. The Corporations Act requires the financial report, the directors' report, and the auditors' report to be received and considered at the AGM. Shareholders are entitled to ask our auditors questions as to the conduct of the audit and the preparation and content of the auditors' report or other related matters. As I mentioned earlier, Melanie Sutton of Deloitte, our Lead Audit Partner, is in attendance and available to answer any such questions. I'm advised by the auditors that there have been no questions received for Deloitte's attention prior to the meeting.
Are there any questions for the auditors in the room or online? We're good? Okay. As there are no more questions, I ask the Company Secretary to record that the financial report for the company and its controlled entities for the year ended 30th of June 2024, together with the directors' report and the auditors' report, has been received and considered by shareholders. We'll now proceed with the resolutions to be considered. To facilitate this, I appoint Angela Leapis, of Computershare Investor Services, who's down the back of the room there, as the formal Returning Officer. Resolution 1 on today's agenda is adoption of the remuneration report. The Corporations Act provides for a vote on the remuneration report. Under the Act, this vote is advisory only and is not binding.
The board will, however, take into consideration discussion on this resolution when considering the future remuneration arrangements of the company. Excuse me. The details about this resolution are also contained in the explanatory memorandum that accompanied the notice of meeting and MVP's remuneration report, which is contained between pages 28 and 42 of the 2024 annual report. Two years ago, the board undertook a major overhaul of the executive compensation system to bring that system into line with modern Australian compensation practices and to better align the interests of executives with those of shareholders. The system was intended to be fit for purpose, recognizing the state of the company and the need for simplicity when there is ready line of sight for executives between business outcomes and their own compensation results.
The Human Resources Committee, under Leon's leadership, is now undertaking a review of the system to ensure that it's working as intended. The fact that the company has been loss-making in both accounting and cash terms for some years has shaped our thinking as we drive toward profitability. In terms of the compensation outcomes for FY 2024, I note that the business did in fact improve both profitability and cash flow over the prior year, but not as rapidly as we had hoped. As a result of the performance of the company against our plans, executive short-term incentives were marked down significantly in accordance with the compensation system. The disappointing share price performance being felt by all shareholders has also resulted in the long-term incentives granted in September 2022, not vesting, and so in common language, being out of the money.
My final note is that the leadership team, as well as the directors, all have significant exposure to company performance as shareholders, partly as a result of the requirement that short-term incentives be partly taken by executives as shares with a holding lock. I would like to formally advise shareholders that MVP will disregard any votes on this resolution, as stated in the voting exclusion statement, and as set out in the notice of meeting. This is to avoid conflicts on the topic. As noted in the notice of meeting, the directors will abstain from making a recommendation in relation to this resolution. Are there any shareholders in the room or online who would like to ask a question or make a comment about the remuneration report? I don't think we have anything here. Tara, anything online? Okay, thank you.
I'll now put the resolution to the meeting, formally, and we've got the proxy results showing on the screen. It does indicate, I think, that it's likely this resolution will pass. We'll, we'll confirm that once we've got the full numbers in, obviously, through the proper processes. I would like to thank shareholders for their, their confidence. As we develop remuneration, it's always a difficult topic to work with. If I can just ask, just formally, if you could select for, against, or abstain next to the Resolution 1 on your card, your voting card or paper. Thank you. I think we're good on Resolution 1. The next order of business is the election of directors, and I think I'm actually the first on the slate.
I'm gonna hand over the role of Chair to Richard. Richard's the Chair of the Audit Committee of the company, he'll, he'll take care of this, this piece of formal business. Thank you, Richard.
Good afternoon, everyone, and thank you, Gordon. Mr. Gordon Naylor retires by rotation, and being eligible, offers himself for re-election. I'll ask Gordon to say a few words about himself.
As I said at the start of the meeting, my name's Gordon Naylor, and I'm offering myself for re-election as a director. My professional background is principally from working at CSL for over 30 years. I saw CSL when it wasn't referred to in the AFR as a, as a giant. It was a little company, based out of Parkville, so I saw a lot of that, a lot of that journey from well before the float in 1994. I've been very fortunate to have been closely involved in all the major developmental milestones of CSL over that time. And as I mentioned before, I think at the start we had a market cap of about AUD 300 million. It wasn't a very big company when we started out.
I worked overseas for most of my career in, quite a number of different, management roles in, in different parts of the world. I returned to Australia as Chief Financial Officer for the group, in around 2010. As CFO, I was very familiar with the governance systems of ASX listed companies, particularly global companies. That's very familiar territory. Following my role as CFO, I took over the leadership of Seqirus, which is CSL's vaccine business, and that business at the beginning was, you know, remarkably loss-making. We managed. I think the first year we lost AUD 300 million, so it was pretty serious, serious issues we faced on a turnover of about AUD 1 billion. So it was a seriously loss-making company.
Over that 3 years, we basically took it to profitability, and to global leadership in the vaccine space during that time. I'm also currently the board audit committee chair at Orica, the big mining explosives company. The other... I know I do a fair bit of stuff, but the other big part of what I do is I invest in start-up companies. I'm actively involved in the start-up space in Australia, mainly through Melbourne Angels. I've a fair bit of exposure to that, to that, that start, that sort of early stage piece, which is important, I think, for the future.
Over the last few years that I've been a director and then Chair of Medical Developments, I've worked hard to assemble a, I think, a world-class board to oversee the, the ultimate internationalization of the, of Medical Developments. Despite the challenges of the, of the last year, I and the other directors are very confident in the future of the company. I offer myself for your consideration.
Thanks, Richard.
Thank you, Gordon. Are there any questions in the room, noting that the board recommend Mr- recommends Mr. Naylor's re-election? Are there any questions online, Tara? I will now put the resolution to the meeting. Here are the proxies. Details of the votes of this item are now on screen. There are no further questions. I please now ask you to select for, against, or abstain next to the Resolution 2 on your voting card. Thank you. Please now record your vote for Resolution 2, if you have not already done so. Based on the proxies received, it seems the resolution will be passed. Congratulations to Gordon on his re-election to the board. I will now hand back to the chair.
Thank you, Richard. I move to the next resolution, which is the re-election of Mr. Richard Betts as a director. I'll ask Richard to say a few words about him, himself. The board recommends Mr. Betts' re-election.
Thank you again, Gordon. My name is Richard Betts. I offer myself for re-election as a director. Whilst I understand the last years have been challenging, from a board perspective, and a company. I think we've made some difficult decisions, and ensure that we have the platform for success going forward, and as such, I remain committed to the future of Medical Developments and believe we have the CEO, management, and team to deliver our vision for the future. As a chartered accountant, I began my career with Deloitte. And as a finance professional, I bring a perspective to the decision-making of the board that provides strong financial and a governance bias.
My executive role today is the CFO of the publicly listed company, Ridley Corporation, and provides the board and the business with a relevant view in regard to the opportunities and challenges that are facing many companies in today's public company environment. During my period as chairman of the Audit and Risk Committee, I've revamped the committee, and together with management, we have implemented a systematic process of risk and governance, and believe the business is now well-equipped to deal with the opportunities that it will be provided through in terms of implementing its strategies. I believe the board has a strong vision for the business, and I remain focused in supporting management in the delivery of that business. As such, I seek, I seek re-election today.
Thank you, Richard. Any questions of Richard in the room? The answer's no. Tara, anything online? Thank you. I'll now put the resolution to the meeting. We'll display the proxies. If I could ask you if you could now select for or against or abstain next to resolution number three on your paper or online voting card. If you could just record that vote. Based on the proxies, at least, it would seem as though the resolution will be passed, so congratulations, Richard. Moving to the next item. We'll stop the little dance rotating up here now. Let me just stay here. The next item, as I mentioned in my earlier address, and by Brent, Medical Developments International recently underwent a capital raise involving a placement of shares to institutional investors.
That placement saw the addition of several new institutional investors, which was very positive. The placement was within the confines of the listing rules. Under those rules, MVP can issue equity securities up to 15% of share capital in any 12-months rolling period without shareholder approval, otherwise known as placement capacity. MVP also obtained an additional waiver under the listing rules from the ASX to supersize the placement, meaning the 15% was calculated on the number of shares MVP had on issue post the entitlement offer to all shareholders. The listing rules also allow MVP to obtain subsequent approval of that issue of shares from shareholders. If approved, it means that the issue of shares to institutional shareholders will be treated as if that received shareholder approval.
It therefore refreshes MVP's ability in the future to issue up to 15% of share capital without obtaining prior shareholder approval. As mentioned earlier, MVP does not envisage needing to seek additional capital. However, it is prudent that MVP has some available capacity. Are there any shareholders who would like to ask a question or make a comment about the proposed resolution, either in the room or online? No questions here. Online, Tara, thank you. The board does recommend that the shareholders vote in favor of the resolution. Now, put that resolution formally to the meeting with details from the proxy advisors on screen. So if I could just ask you now to select for, against, or abstain, next to Resolution 5 on your voting card or online. Thank you. I presume that's all happened.
Based on the proxies, it seems that the resolution will be passed. The next resolution is around approval of increased placement capacity. The Listing Rules permit eligible entities to seek shareholder approval at an AGM to issue equity securities up to 10% of its issue share capital over a 12-months period following that AGM. This is otherwise known as the 10% placement capacity. A 10% placement facility is in addition to the company's 15% placement capacity under the Listing Rules. The notice of meeting sets out detailed information regarding this resolution, including the potential impact on existing shareholders. As MVP is an eligible entity, this resolution seeks your approval to allow the board to issue an additional 10% of ordinary shares until October 2025.
If passed, the exact number of shares that could be issued is calculated using a formula in the listing rules. In fact, Listing Rule 7.1A.2, to be precise, if you're looking for something to check. As mentioned earlier, MVP does not envisage needing to seek additional capacity, capital, but if passed, it creates flexibility to do so over the next 12 months. This resolution requires 75% of votes cast by shareholders. Are there any shareholders in the room or online who would like to ask a question or make a comment about the proposed resolution? Yep, question there.
Just a quick question in relation to the potential use of any capital raisings. Your balance sheet at the end of June was, there was cash of AUD 9.7 million.
You've raised AUD 10 million, I think, from memory, from the recent placement and entitlement offer. You're talking about cash flow positive later in the year. Just wondering, you've, you've indicated, yes, you don't have an immediate need for capital. At what point would you look to raise new capital, particularly through placements? Placements can be dilutive to the existing shareholders. Yep. I did notice in the raising, the entitlement offer, though, that you didn't get a full take-up anyway through the retail entitlement the time. Just a question there as to when you might issue placements or try to raise new capital, given, given the circumstances of where you are at this point?
I think the pragmatic answer is we need to deliver on the cash flow piece first.
It's a bit around the question around focus. We need to get that right. I think that, you know, once we've done that, there is some good opportunities to, to see further economic development of the business. We've got a few, you know, like the U.S., for example, or, you know, maybe just to accelerate growth into Europe or something like that, but we need to get the basics right first. That's sort of the way we're thinking about it. You never quite know how it's gonna play out, but that's our current thinking. Any other questions in the room? Anything online, Tara? Okay, thank you. We've got the proxies up on the screen.
If I could ask that you now place your votes, either for, against, or abstain, and submit that, that would be great, or on either, either on the paper cards or online. Based on the proxies received, it would appear as though the resolution hasn't passed, given the 70%. 70%, isn't it, Tara? 75%, sorry. We'll see what comes out when we get the final results come in, and obviously, we'll that'll all be released to the ASX once we know those numbers. Following... this is the last resolution. After this, I will close the meeting, and that'll be the end of the voting. Just giving you a notice that that's the, the plan.
The next item is renewal of the proportional takeover provisions, in particular, certain provisions of the Constitution that are deemed ineffective against regularly renewed by shareholders. When the company's Constitution was approved, provisions were included requiring the company to obtain shareholder approval in the event of a proportional takeover bid. A proportional takeover bid is an off-market takeover bid for a specified proportion of the company shares held by each shareholder. Given proportional takeover bids could be for less than 100% of a shareholder's holding, this may result in control of a company passing without shareholders having a chance to sell all of their shareholders to the bidder. This is particularly relevant to holders of small shareholdings, and I think we've got probably a few in the room who are in that situation.
To address this, rules 7.5 and 7.8 of the company's constitution prevent the company registering a transfer of shares that implement a proportional takeover bid, unless that transfer has been approved by shareholders. However, the Corporations Act provides that notwithstanding in conclusion in the Constitution, these provisions will not apply in the event of a proportional takeover bid, unless renewed by shareholders every 3 years. The board is not aware of any proposal to acquire or increase a substantial interest in the company. However, the board considers that shareholders should continue to have the opportunity to consider whether to accept a bid from another person for what might become control of the company without shareholders having the opportunity to dispose of all their shares. This resolution also requires approval of 75% of votes cast by shareholders.
Are there any questions from anybody in the room or online, or comments about that resolution? Nothing online. Thank you, Tara. Just as a reminder, this, after this one, we'll close the meeting. The board recommends that shareholders vote in favor of the resolution. The proxies will be up there. I'll just ask, you can now select for, against, abstain, or abstain, either on your voting card or on, with the online system. We have a returning officer circulating. He's collecting, collecting votes. Just on the base of the proxy, it does appear that resolution will be passed, which is, which is good. Ladies and gentlemen, I'll just let Angela finish her circuit. I will be closing the vote once we've got that one done too.
Computershare guys will sort that out. Yeah, good. Few more green cards. Just for the folk online, we're pretty close to wrapping up here. I think we've managed to flush them all out. Angela, are you good?
Yes, we're now first call, Mr. Chairman.
Excellent. All right, look, I will now formally close the voting both online and in the room, as we've got all of the votes in, which is great. Now the poll is closed. The results will be compiled, and as I mentioned earlier, announced to the ASX after the conclusion of the meeting. Look, thank you. Thank you for your attendance and for your participation in the meetings. It's, I think the engagement's great. We do appreciate hearing from shareholders, and we'll have a, you know, that sort of direct communication, I think is quite important. A bit hard, I think, particularly for small shareholders to get, get, get a voice, if you like, outside of this process.
That's, that's important to us. I now formally close the 2024 annual meeting of Medical Developments International Limited. Thank you.