Okay, great. Thanks, Harmony. Thanks everyone for joining the call today. I'm here with Brendan Pentland . For those who haven't met him yet, he's our new CFO that's been on board for a couple of months. I'll go through the high level at the moment, and then I'll hand over to Brendan for the detail. Just turning over, you can see our underlying result is sitting at good sales at AUD 1.9 billion. Our underlying EBITDA at AUD 49 million, which I think is a good solid result. Net profit after tax at AUD 13.3 million. On the statutory result, revenue remains the same. EBITDA is a loss of AUD 400K and net loss after tax of AUD 21.3 million.
Just to go straight to the difference at the moment between the EBITDA figures or the statutory and the underlying, is we've put in our notes to the market, is that we have, as a board, taken a decision to make the full pro-provision for the Infinity debt. As our shareholders know, we've been working tirelessly with this group for some time. We did put them on hold in March last year. We had hoped that prior to Christmas, that we had come to an arrangement with the Infinity Group and other creditors. Unfortunately, that remained difficult and it's all public knowledge what's happened with that. That group was put into administration, well, receivership and then the rest of it into administration.
We are continuing to work with the administrators, weekly, and the other creditors are working with that as well. We aren't taking our foot off the pedal there, but we are making full provision for Infinity. We do need to move on and be cautious around that debt. However, from a statutory perspective, that's what we need to do. We think it's a prudent approach to take. I want to assure, ensure shareholders we will do everything we can and keep on track as we can to get that, recover our funds. It is expected, as you all know, that the administration process is expecting binding offers in quarter four. Hopefully by the beginning of May, we'll have a further update for shareholders.
That's, that's the difference there, and Brendan will take you through a few other underlying differences as well. From a revenue perspective, I'll just touch back on that. I think it was a really good result from the team. We did have the Infinity when we put that account on hold, we lost for the H1, AUD 78 million worth of revenue. For the team to have built that back up and recovered it, to have a positive growth, I think is a really good outcome. That also included the deflation of the COVID drag of about AUD 48 million as well. From an EBITDA perspective, expenses were well maintained.
We did have some challenges around freight during the period, and that was more around some of our integration work that we were doing and some of our new business. We've now opened our new Brisbane site. You know, we had a delay around that, so that's all up and running at the moment. It's not fully up and running, but we do have stock in there and it's transitioning and it's certainly taken that initial pressure off our network. We did have that in the H1. However, if you look at our expenses as a %, I think the team maintained them well. I'll just turn over now to our statutory bridge slide, which Brendan will just cover off a couple of other points there.
Thanks, Carmen. We provide the, the bridge between our statutory and underlying EBITDA, just to give you a better understanding of how we get to our underlying, our result. As Carmen said, the statutory EBITDA was a loss of AUD 0.4 million. We add back the Infinity Group debt, net of GST recoverable of AUD 46.4 million. We also incurred merger and acquisition-related costs of AUD 2 million in the period. As you know, completed a couple of acquisitions in the half being AHP Dental in July and Somnotec in December.
We've announced, we've entered or signed a SPA with Haiju that is yet to be complete, and there are a couple of other smaller acquisitions that have completed. And we still continue to curate a really encouraging pipeline of further acquisitions, strategic acquisitions that we think complement the existing business, particularly as we look to grow out Asia, but also locally as well. We identify those and isolate those costs. There were a number of, as we know, we're nearing the completion of the 3-2-1 implementation and integration strategy. So the costs associated with that program, which does take costs out of the business, which sets us up very well as we move into FY 2027, is a.
our business, to a scalable business, as we look to improve margins. The costs associated with that, we identify and back out of our underlying earnings, and then we have also some unrealized FX gains and losses stated there, which in the period was a net gain. We reverse those as we have in prior periods as well. That's where we arrive at our underlying EBITDA of AUD 49 million for the period.
Turning over.
We're now moving to slide seven.
Okay. Thanks, Brendan. As I touched on before, the revenue, a good solid result there at AUD 1.9, EBITDA of AUD 49. The underlying revenue has been strong around the growth back up in the pharmacy division, taking closing the gap with the loss of Infinity and also that COVID drag. If you normalize that out, it was a good solid result. Underlying EBITDA growth on 3.3% on prior year, which is solid enough with where we've been. We've taken out the impact of the Infinity Group and integration costs. To touch on that as well, we haven't been over the top on what we've backed out on integration costs, so they are pure, in that regard.
There are some M&A costs with those new acquisitions that Brendan just mentioned. And, you know, we're maintaining solid margins there as well, so there's no concern around those. Just move on to the next slide. Thank you. Expenses. Obviously, I touched on before around the operating costs, which we had some freight in particularly in New South Wales. We did have some good news where we won some new contracts, particularly in contract logistics. The contracts that we won did put pressure on that network. We did have a bit of a double whammy there with it, where we had a delay in entering our new Brisbane site, so we had to keep some of that stock or the balance of stock in New South Wales and transferring it up there.
It definitely put some freight pressures on there. Finally got the keys just before Christmas to the Willawong site, and it instantly alleviates that excess space need. We'll be able to control that a lot better in the H2. We did strategically invest into the marketing space. Obviously, goes without saying, we expect our investment into marketing to have a return on future growth. I can see that in the areas that we've invested into. The statutory EBITDA is obviously impacted around the Infinity. Net debt is about in line with the group's expectation. Just for all the shareholders there, we have a period over December, probably from about mid-December until about mid-January, where we need to build that stock.
And our manufacturers often close down over that period of time, so we have to keep our stock at a peak level pre-Christmas whilst we have record sales, which is a good thing, a good challenge to have. Then it doesn't start really declining down until about mid-January. You'll see that consistently then coming to line with where our sales cycle is, and it'll finish nicely by the end of June as well. It's just a seasonal peak in inventory that we always have as a challenge. Moving over to the next slide.
I'll pick this up, Carmen. Carmen spoke to the revenue bridge. We've covered off a couple of the items here, but it is worth just stepping through a couple of those. As we rebase the prior previous count comparative period, where we back out the Infinity sales and also the COVID drugs. It gives us a rebased FY half year 2025 of AUD 1.7 million. GLP-1 drugs has been very positive for us in the H1, particularly around being added to the PBS and also the Safety Net end date at the end of December. There was a strong sales of those in the half.
Also with the organic growth, which we identify there, of AUD 114 million. We think that's a pretty good outcome. A small contribution from the acquisitions, mainly the AHP Dental, which was in July, a smaller contribution from Somnotec. We'll see those contributions in the H2, along with the other acquisitions, as we complete those, contributing into the H2. I think just to characterize that, if we only adjusted for the Infinity sales in the H1, also excluded the revenue contribution from the acquisitions, the net organic growth of AUD 7.1 million against the prior period is a pretty solid result in our minds. 7.1%.
Yeah.
Yep. Sorry. I might just move now to the next slide, which is just as we talk to our geographic segments. I think it's, so yeah, the ANZ region, solid normalized revenue growth at a steady margin, I think is really the feature of this result. Before normalizations, the growth rate in the, for the region was 2.1%, and after the normalizations, which I, we just stepped through, was 9.8% on PCP, and the margin remained steady at 7.8%. In that wholesale channel, which did see a decline of 2.6% period on period, and finished at AUD 1.5 billion in the half.
That was impacted by the Infinity sales and COVID drag, when normalized for those, it was a 6% growth. PCP wholesale margin improved slightly to 6.1% from 6%. In a competitive space, that's a good outcome. Still on wholesale in our total pharmacy, as hospital and retail revenue did decline, you know, noting that those normalizations that we spoke to, when adjusted for those, it did have strong, pretty solid growth of 7.4% in PCP. I mentioned the acquisition of AHP Dental.
That's a division that, we're pretty keen on, in dental and developing in, and that sets us a really solid platform, as we further our market, go-to-market strategy under a single brand to drive profitable revenue growth in dental, which we see as, fertile ground for us. Complementary medicines, within wholesale, remain resilient, continues to, perform in line with our expectations. Then also our, continued expansion into, our medical consumables range, and range, including our private label portfolio, has been a feature also in the H1.
I just move to medtech in ANZ as well, where the ANZ revenues increased by 4%, mainly driven by strong growth in the Australian medical and surgical business units, but also in our New Zealand orthopedic business unit and the launch of our aesthetics, being a feature in the H1. Vision revenues declined in the period, as we transition and rebuild that portfolio. We're making investments into surgical robots and aesthetics in ANZ to support future growth opportunities in that particular channel. Contract logistics, as I move down the table, really pleasing result at 47.1% revenue growth, really underpinned by a significant contract win in June of 2025.
We saw the full benefit of that in this half, but also an equally significant organic growth with existing principals. You know, that was a really pleasing result, and we look forward to seeing what we can do in that space. The margin in that contract logistics also improved to 4.7%. I think that's, you know, just reflecting a change in mix and some scale in that particular business. Clinical manufacturing delivered a solid revenue performance, but was hampered with some delay of some equipment sales, which we were hoping to land in the H1. Margin did improve, you know, pleasingly, in that particular channel.
We do maintain a solid pipeline of opportunities, given our specialist sovereign capability in the production of Reagent Red Blood Cells. Just, that rounds out ANZ. I'll move to the next slide, which is Asia, which falls into the med tech channel. You'll see there, really strong revenue growth at a healthy margin. Very well done on that, on the team operating through those countries and region with revenue growth at 33.2%. Just a reminder that there was very little of that came from the acquisitions in the period. That was a really strong organic growth, really underpinned by strong aesthetic sales and delivery of a couple of large capital equipment units in the period.
Organic revenue growth at AUD 16.2 million or 31%, we'll give that a big tick. Margin growth at 30% at a margin of 44% are really attractive numbers for us, and why we see that as a region that we want to invest in and continue expanding our scale in that particular region. I'll just move on to the next slide, which gives a view of our balance sheet. Carmen touched on our net working capital position. It does reflect that end of calendar year build up, so we'd expect that to moderate in the H2. Acquired businesses contributed AUD 13 million of net working capital.
Also just a reminder that our that Infinity debt has been fully provided for and it sits at, on our balance sheet at nil value. With our net debt slightly elevated, it'd be nice to have had the AUD 48 and a half million of cash from Infinity. That would have helped that number, but as Carmen said, we remain hopeful that there'll be a substantial recovery of that in the H2, but there's that process needs to run its course. As I move on to the next slide, which is a year-on-year cash flow for the period. Pleasing result in improvement in working cash flow from operations with our working capital management in the period.
Investment in net capital expenditure is largely in our Willawong DC, which is now open. The businesses acquired, those cash outflows were in relation to AHP Dental and Somnotec, and you'll see the use of our financing facilities to just to assist with our working capital build in the towards our peak sales period. So that's... I will hand now back to Carmen to take us through the outlook.
Okay, great. Thanks. Thanks, Brendan. Just reconfirming our guidance for the year. We are confident around achieving the AUD 3.6 billion or thereabouts in revenue. EBITDA, we're remaining at the AUD 97 million-AUD 107 million underlying guidance. Our net debt, underlying, we're aiming for approximately about 2 times by the end of June. That should be a good, solid outcome for Paragon Care and, hopefully, the shareholders and investors on the call think the same. Again, I know we've covered this a number of times on the call, but I want to be very clear about Infinity. We won't take our foot off the gas around recovering that debt.
It's unfortunate that it is in the hands of administrators. At the same time, I like that it's out of the control of the Infinity Group as well. I think it'll speed things up for us, and hopefully get an outcome rather, sooner rather than later. On strategic acquisitions, we'll continue down that path. You would have seen in the notes that David's going to have a focus on M&A. This will be about the right acquisitions. We do want to continue the growth in Asia. We've had a really good news story in the first six months, and we see a lot of opportunities around the Asian countries, and we'll continue to focus on what we can build on there.
Again, it'll be, it'll be the right, the right acquisitions that we know that we can bring into the business, and that we can expand on them. They won't be just a set and forget. We've got a strong pipeline, but we actually want to make sure that we do something with them. We are growing. We're in nine Asian countries now, which is hard to believe in a short period of time. We would like to cover off getting up into one or two other regions, but at the moment, we're focused on just those nine. We are looking towards finalizing our three, two, one strategy by the end of June.
The team at Paragon Care are very clear from myself that once we get to the end of June, integration is done, and it's business as usual. We're mostly the way through. We are on track. There are some things that we do need to cover off by the end of June, though, as well. We'll work hard at getting that done. From... I did announce around the Ramsay business. It was important that I shared that as soon as I could with our shareholders, more so because it is a big top-line number. It is a, you know, a large private hospital group, but from a profitability perspective, we were confident in taking all those costs out because it was such a low-margin business.
We're well progressed down the track on doing that as well. You can have confidence around that. Also hopefully to make sure that our shareholders do have confidence in what we can achieve is that we have been awarded the Australian Defence Force contract for the pharmacy, medical, and dental. It's a 5-year contract with some options there. We certainly won that contract on capability. It wasn't a price-driven contract. It was about capability. Really proud of what the team did there to achieve that. From a dividend perspective, no dividend was declared in the period, but we will review the dividend at the end of June. We are committed to reviewing that for shareholders each half as well.
Just to wrap up, you would have got the news this morning, but I'll be transitioning a little bit earlier, not that much earlier, but over to managing director role from the 1st of March. Dave's still in the business. As I said, he'll focus on M&A and making sure that those businesses that we do acquire are bedded down into our network and that we leverage the opportunity that they bring. Okay, that's about all. I'll hand back to Harmony, and she can see if anyone would like to ask any questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two, if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Tom Godfrey from Ord Minnett. Please go ahead.
Oh, good morning, Carmen. Good morning, Brendan. Thanks for taking my questions. Can you hear me okay?
Hi, Tom. Yes, I can.
Great. Maybe if I can just sort of start with the guidance, noted we're in Feb, there's sort of AUD 10 million range there. I'm just sort of interested in your thoughts around what the key drivers of a bottom end of the range outcome versus top end of the range outcome would be, or what are the key puts and takes in the H2?
Probably the biggest factor is making sure we clear out and finish off the end of that 3-2-1 transition piece. You know, as I said, we're three-quarters of the way through it. There's some complicated pieces in that. I just want to make sure that that's bedded down. I need to make sure that the transition into the new Willawong site's completed because I've had some pressure around that freight cost there as well. They're probably my two biggest risk areas between the top and the bottom end of that.
Great. No, that's really helpful. Maybe just on the net debt guidance, I just wanted to confirm that's pre-double AASB 16 EBITDA, so it's got the leases in there. If that is the case, it sort of has you coming down towards AUD 200 million of net debt from AUD 287 million this half. Are there any assumptions around the Infinity outcome in that?
No, Infinity's not in it.
Yeah.
That excludes Infinity.
Yeah.
Tom, just to reiterate, that is in a post-double AASB 16 EBID, EBITDA calc.
Okay, thanks. That's helpful.
Yeah.
Okay.
Thank you. Your next question comes from John Hester from Bell Potter. Please go ahead.
Good morning. Sorry, good afternoon. Carmen, just in relation to the medical technology business, it looks like FY 2025 revenues were AUD 196 million, and you had a big H2, AUD 114 million, and it's dropped down to AUD 86 million in the current period. What happened there?
Oh, in, you're in comparison to last year. Sorry, John, you broke up there.
Yeah, H1, 2026 versus H2, 2025. Sorry, just to reiterate.
Is that? They can be lumpy, John. It depends on where they fall. Yeah.
So second-
You've got. Yeah, are you talking med tech? Med tech on the H1 was AUD 86 and half year FY25 was AUD 82.7.
Correct. What I'm saying is that the H2 of 25 was AUD 114.
Yeah.
It's come back to 86. Hence the question, what?
No.
Why such a dramatic decline?
It's just lumpy, John, on what we bring forward, so I'm not concerned about that.
Right. Okay. It seems extraordinary decrease.
Yeah.
What do we expect?
The only area that we have had been problematic in medtech would be the vision. We've definitely had a decline there. With OEM, we've had a really strong growth in that space. We have invested into robotics there in medtech as well. The rest of them.
Okay.
Are not too bad. I'm just thinking that through as you ask that question.
Projecting forward, is it more likely to be AUD 114 million dollar H2 or an AUD 86 million dollar H2?
Well, the H2 should be stronger, not based on what we've got in the pipeline.
Okay.
Um-
In your contract logistics business, what was the big contract you won, and how much was it worth?
Well, we can't say how much it's worth because we're under commercial agreements there. The biggest contract that we've won most recently was Owens & Minor, so we do all of their distribution across Australia. We've also had underlying. We've had some smaller contract wins as well, but that was the bigger one. We've also had organic growth in that space as well from existing principals.
Is it reasonable to expect that that'll be a long-term sustainable sort of revenue number, or is this gonna sort of fluctuate around short-term wins and losses?
I'm not expecting any losses in contract logistics, but I certainly am expecting a few more wins. That business unit itself has a long runway. Like, I think.
Okay.
I don't think I know we're subscale of where we could be on that division.
Okay.... just moving on. In relation to other income, it was material in your EBITDA result. It's consistent with how you treated it in prior periods, but what was the AUD 2.9 million of other income?
Some of that's the GST that's recoverable on the Infinity. Only part of it in this reporting period is recoverable, John. We recognized that due to the, I guess, tax-
Yep.
-office, laws, you know, we can only claim the GST back when, you know, the debt is older than 12 months old, so we could only claim back part of it in this period. Once we get past March, when we cease trading with Infinity, there'll be a further, I think, AUD 2.7 million of GST recoverable that will also come back through our PNL. That's just a quirk of the tax and accounting. It also does include interest income, which we recognize and under our contractual terms with our customers. That, that is recorded in that line as well.
That AUD 2.9 million is not bank interest, that's interest recoverable from customers?
That's from customers and also, yeah, that GST amount.
Is it reasonable to expect that, I mean, not the GST, but the other income, the revenue income will be repeated in the H2?
No, I wouldn't bank it on it at that same number.
Okay. Okay. Finally, just in relation to your operating cash flow number, just on the slide deck, it was cash flow from operations is -AUD 4.8 million. That improved from a loss or net cash outflow of AUD nineteen and a half in the prior period.
Yep.
If you take out the, if you take out the impact of the Infinity, and I don't think that was impacting this particular result, but, you know, why is the business sort of so, capital heavy in that, in the H1, and then you seem to get a much stronger cash flow operation and cash flow result from operations in the H2?
I'll answer part of it, John. There would have been some impact in the PCP because of Infinity, that would have contributed to the nineteen and a half. Also there would be some benefit in the H1 of this year because we didn't have any sales of Infinity, but there were some continuing cash payments that we did receive. There would be some swing factors because of that. That's, that gives some perspective. The second part, the capital intensity, well, it is, as Carmen articulated before, it is that end of calendar year build, and our suppliers going into shutdown.
We do need to order, big leading into Christmas and, that December period and have the stock, on hand. We've got strict SLAs with our customers around delivery, so we've got to have it in our warehouses and, be able to deliver, within those strict guidelines. That's a major part of it.
peaks out in December.
Yeah
... John, you don't have the same thing in June.
Yeah. Okay. Thank you. That's all I mean.
Yeah.
Thank you. Your next question comes from James Tracey, from Blue Ocean. Please go ahead.
Hi, Carmen and Brendan. Thanks for taking my questions.
Hi, James.
Yeah. Just, I'm sorry to labor the point on the cash flows, would you be able to provide a bit more of a bridge between the AUD 49 million of underlying EBITDA and the minus AUD 5 million of cash flow from operations? Yeah, 'cause I guess it's a AUD 55 million delta and, you know, looking at the balance sheet side, it doesn't look like the working capital has gone up that much. Maybe, maybe it would be helpful in understanding how you get from the AUD 288 million in net debt you've got now to sort of AUD 200 million guidance, which is implied by the 2 times underlying EBITDA guidance you've given on the net debt.
Yeah, look, I might need to take that one on notice, James. It might be a little bit hard to step that through here, so, if you wouldn't mind, I might just come back to you on that one.
Fair enough. All good.
James, there's a number of things...
Yeah
that are in there. You know, we're getting a tax refund. We've got the working capital benefit of Ramsay going out. We've got a few other things like that. Even though you've got some of the acquisition costs out there, you've also got the benefit of those incoming. So there's a number of things that build up that bridge. Yeah. Yeah.
...There are, in the, that underlying number, there are obviously cash components of that underlying EBITDA number, James. Look, I think, yeah, there'll be a number of layers to it, and for that reason, I think I'll just need to come back to you and be able to step that through.
Yeah, I guess. Yeah, people would, over through the cycle, I guess people would hope to see the operating cash flow, including interest and tax, closer to the underlying EBITDA.
Yeah.
I guess on a full year basis, that should be more of the case, given you don't have the issue of customers being in shut down over Christmas and so on.
Yeah, we'd expect that to unwind, somewhat in the H2.
Yeah. I mean, once you build that, release that stock, James, it makes a substantial difference. I mean, we never build stock to that extent during the rest of the year. You take that pressure off, you've got your short month basically in February as well. It's just a cycle thing, the way that our cash flow works. You know, we have our, the way our debt collection works anyway, so, it's like a, you know, peaks at about the 25th of the month, and then it goes right back down, which we've gone through with you before. I can take you through it when we're one-on-one together. It's just cyclic on the way that it works. That buildup of inventory in December is material.
Yeah, that makes sense. Just a quick follow-up question, just around this, Australian Defence Force contract that you've mentioned in the release.
Yeah.
-kick in the fourth quarter or fiscal quarter of the year.
Yeah.
The AusTender website is saying that contract is worth AUD 351-
Yeah
-million over five years, I think.
Yeah.
Could you just, you know, comment on, I guess, the incremental profitability of that? It seems like it's a very big revenue number and maybe how it compares to the Ramsay contract, which you lost.
Sure. Look, I expect revenue is probably... I mean, you never know until it kind of once it's in progress, but I'm expecting revenue around the AUD 40 million for that contract. I can't go into the details of it because obviously some of that is confidential as well. The Ramsay contract, as I said, was a very low margin contract. Probably too low, even if I'm completely transparent, even probably the last time we tendered for that business, we went a bit too tight on what the margins were. We always knew that if it tendered again, that it would be risk. Kind of no surprise where it went to. Wasn't a surprise at all, actually, to us, where it went to.
They've got a big network that they've got to fill, and I, and I understand their reasons for it. You've got to get to a point that you don't want to keep giving money away for just a, the prestige of a contract. However, with the defense contract, as I said, that was won on capability. I expect, and we know, that that will deliver a better gross margin dollar than what the Ramsay contract did.
That's fantastic. Thank you, Carmen.
Thank you. Your next question comes from Josephine Di Martino from BP. Please go ahead.
Hi, this is Josephine Di Martino . A question for you, Carmen.
Mm-hmm.
The share price has come down considerably, and today it's now sitting at AUD 0.185.
Mm-hmm.
That's dropped it from when nearly 18 months ago, it's dropped AUD 0.525.
Mm.
What's your feeling about that, given the fact that a dividend hasn't been paid? Interest rates have gone up, and they're potentially going to go up, and I've heard what the brokers have been asking, and all their questions are very fair. Where is your sentiment around the share price, and the value of the organization?
It's a tricky question for me to answer. It's a good question. I mean, clearly, I'm going to answer the, I guess, the political response to say: I don't worry about the share price every day. Of course, we've got shareholders that I actually worry about because I want to make sure that Paragon provides a return to our shareholders. If you worry about it every single day, then that's problematic for anyone who's an investor. Do I think that it got overcooked at and went too high at one point in time for where we were at? Yes, I did. Do I think it's too low now? Absolutely.
If you look at us, compared to where we sit against our peers in the market and our multiple, we're pretty low. I'm surprised at that. I'd, I do think, you know, we were so early on in a massive integration. You cannot flick the switch on these things overnight to get that result better. The work that we're doing, and what we've done and the result we're delivering on, if we end up at AUD 100 million of EBITDA, to AUD 107 million this year, I'll be absolutely over the moon on that result. I mean, compared to where we were even last year. It's a good growth. What I'm absolutely not happy about is the position that we've ended up in with Infinity and, you know.
tried to be as transparent the whole way through that process. That to me is our only black mark on us. It's a big black mark. I'm not trying to deflect that, but I do think, you know, we're being punished a bit too hard if we look at that underlying result and where we're sitting around that. I do think we will, you know, the administration process, if you look where the administrators think they're going to pitch that and what they're looking at recovering, I think it'll be a good outcome for us. I know it's out of my control, so I can't hang my hat on that. I do think it'll be a decent outcome from us.
Even outside of that, we've got personal guarantees against all of those directors, so we won't be stopping there. Then outside of that, as I said, if we get to AUD 100 million-AUD 107 million odd in EBITDA, it'll be an excellent result for the PGC business. You know, we've merged three very complicated businesses together in just over 18 months. When I look at the pipeline of opportunity, once we're together, because I think if we can do this now with what we've been through, once we've finished this 3-2-1, it's all around sales execution.
That's why we've got such a big focus up in growing that Asian market because we think it's sub-scale and the opportunities there are just mind-boggling, actually, and then also overlapping our opportunities in building the Australian and New Zealand business as well. You know, we have been focused on that integration, but, you know, next year we hit FY 2027 with our sales strategy. You know, I went and bought some more shares when I could and I'll be looking at it again. I believe in the company. I wouldn't be doing what I'm doing every day if I didn't.
Thank you. Just one last question: If the share price continues to slide as it has, is Paragon Care, you know, at risk of a takeover?
No. It wouldn't be anyway because you've got, whether it's a good thing or a bad thing, you've got to get a couple of major shareholders across the line.
Mm-hmm.
I know unequivocally they are not sellers.
Okay. Thank you, Carmen.
No, no problem.
Thank you. Your next question comes from Tom Godfrey, from Ord Minnett. Please go ahead.
Morning, guys. Thanks for taking my follow-up questions. Just a quick one on the Ramsay contract, sorry to flog a dead horse. I think when you sort of announced that it was a circa AUD 6 million gross profit for FY 2025. Can you sort of confirm how much OpEx sits directly against that and how much you can pull out? What's the timing of the working capital release?
Well, the working capital release starts to kick in about February. The OpEx against the gross margin was basically line ball.
Got you. You mentioned earlier, you're pretty well progressed in terms of.
Yeah.
executing the cost out?
Yeah. That wasn't started until January, because the contract exited at the end of January. You have a little bit of liaison with that. We're still second line with Ramsay. Yeah, so the working capital release is by the end of February.
Understood. Thanks, Carmen. Last one from me, just sort of a broader question around how the sector's going. We've obviously seen the API and Symbion results. They're sort of talking to pretty strong like-for-like sales growth across their networks. Just any comments around what you're seeing across your pharmacies and yeah, just competitive dynamics?
Yeah, in the wholesale channel, I agree with the positions that they're taking. The wholesale channel looks pretty solid, and we've got some new opportunities in that space as well. Med Tech, as I said to John before, can be a bit lumpy. You've got to get hospitals, obviously, which is the biggest space to buy. They've been okay on the smaller end of the equipment, still a bit slow on the larger pieces. But, you know, we've definitely seen green shoots over the last 3 or 4 months around that. We've had some good opportunity in Med Tech up in Asia as well. You know that we've invested into aesthetics in Australia and New Zealand, so that's also starting to take flight.
Thanks very much.
Thank you. Once again, if you wish to ask a question, please press Star one. Your next question comes from Stewart Oldfield, from Field Research. Please go ahead.
Oh, g'day, Carmen, congratulations, on the promotion. Just on... I remember back at the full year, you sort of flagged a couple of acquisitions by AGM time, saying that there's a pipeline in Asia. Can you just give some indication of whether any of those might close, you know, before the full year results?
Yeah, sure. Haiju, which we did announce, we just haven't completed yet. That should close by full year. Hopefully, over the next month or so, that should close. You know, we closed Somnotec on the 15th of December, and we did buy that AHP Dental one earlier in the year as well. We've got another one that we're closing at the moment as well, up in Hong Kong. It's a smaller acquisition. Yeah, that's probably about all I can say at the moment.
Yeah.
Yeah.
Just in our subsequent-
Yeah
events notes, we do detail
That's been there, yeah.
Yeah. There's been 3 subsequent, that we've completed to year-end. Fisher Biotec, small-
That's mine, yeah.
Tiny one in WA, Pacific Medical, Hong Kong, and Presidental. Yeah, M&A is continuing with some good cadence.
No, well said. And that's all funded by that Asia-based facility. Brendan, you inherited that local Scottish Pacific facility. Is that behaving as expected?
Oh, absolutely.
Yeah.
Yeah, yeah, all good.
Scottpack have been really good.
Good support, from Scottpack. Yeah, it's a good facility. Works for us.
Well done. All right. Thanks for that.
Thank you. There are no further questions at this time. I'll now hand the call back to Carmen for any closing remarks.
Okay. Well, thank you very, very much for your time, everyone. Some good questions there. Hopefully, we answered them to everyone's satisfaction. Brendan and I will be available to take calls, obviously, but we're also doing a roadshow mid-month, so hopefully we'll see you all in person then. Thanks very much.
Yeah. Thanks, everyone.