Welcome to Polynovo's F1 'twenty one Results Presentation. Today, we have presenting Chairman, David Williams Managing Director, Paul Brennan and CFO, Jan Geelen. Covering analysts will have the opportunity to ask questions following the presentation. I would now like to hand you over to Chairman, David Williams.
Well, thank you, and thank you all for attending. I see there's close to 200 online. I'm going to hand you over very shortly. I've got little to say to Paul, our Managing Director, and he's going to run you through some exciting list of all the things that we've done this year from new staff to new products and new jurisdictions, new factory and all of that sort of stuff. But before I get there, you'll notice that I'm wearing a red jacket and a tie today.
And I'm doing that on purpose because this is no ordinary results presentation, which you think you might have turned up for. It's a red letter day for our company and what I want to do is point you squarely, not so much to distract you from what Paul is going to say because that's all very useful, but I want to point you squarely at the financial result, which is a reported profit. But if you scratch and take out items, the share based payments in particular and the unrealized FX losses and so forth, we have just turned a profit for the first time. No flash in the pan, we are now profitable. And I want to just emphasize to you how important that is to us as a Board, but how important it is to you as shareholders and how important it is to the company in itself and especially to our staff.
This is a situation where most startups never get to. You go into a startup and I was just thinking last night when I went into SEEK 15 years ago, long before it was listed, and all I saw year after year was costs. And at 1 year, I remember thinking, they must be spending $20,000,000 on outside broadcasting, outside billboards and so forth. And then but my focus is all on costs. When's the next capital raising coming?
How much more cost? When will I ever turn a profit? And then over time, you start to see the revenues creep up and creep up till they get to a point where you think, you know what, this might happen and this might actually crash through. And then it will turn to just cash dropping out of the system. And that's really where we've got today and that's why it's a red letter day for us.
And I want people to not only recognizing that and acknowledge that, and it obviously has implications for whether we need more capital and all those enough, enoughs who will be going on about that. But let's put that aside for the moment. But I want you to understand that what we're really doing here is we've got a fantastic product. We've got more or less stable cash costs. Of course, they're going to go up because we're going to put more support staff on and we're going to put more salespeople on and so forth.
But we're only putting those salespeople on because they can generate more sales and more cash for the business. So we see this as the beginning of making this significantly cash flow positive. And that's the most exciting part of it. So when I look at our results this year where we got hit a bit because of COVID and we guess what, we only grew 49% in the U. S.
In U. S. Dollars, for example, woe is me, instead of some people's expected 100%. But with half the hospital shut with lack of access to surgeons, still magnificent growth. But the thing I want to emphasize to you is that in this exactly this time last year, we had 18 staff in the U.
S, we've now got 36. We've got another 4 to be appointed, and we're going as quickly as we can to get to 50 people. That is what is going to make this significantly cash flow positive going forward. And on top of that, and you'll get these messages out of Paul's explanation today is what's happening in the U. K, we're back in operating theaters, what's happening in Sweden, we've just opened, what's happening in Taiwan, just had our first order.
All of the new jurisdictions we've got, the new staff we're putting on in Ireland, the new staff we're putting on in the U. K, the new staff we're putting on in the U. S. Is just means that we've jumped over the cost line and this is a that's why I think this is a really important day for the company. This is not like another startup.
We just didn't invent a product and you got to sit back there and worry whether we can get it into oncology surgeons or whether we can get it into a company that analyzes blood or whatever it is. We've got a solid product. We've got relatively stable now costs, I mean, relative to revenue that is, and we've got significant increases in revenue and significant increases in our ability to generate revenues by building the infrastructure in other jurisdictions, by building the sales force in the U. S. And even by building it in Australia.
I've made the example before that when we started with our gun saleswoman, Valerie Young, and she finally got to $1,000,000 in sales and then we said, well, we're only touching the surface on the hospital. So let's put somebody else on. So we put somebody on Sydney. Then we're doing $2,000,000 in sales. Now we've got somebody just new in Brisbane.
We've got a half timer in Perth. You can see easily that in Australia alone and New Zealand, we could easily have 5 people, and that means we could have 7 in California, for example. So that's where we're heading, and that's why I'm super excited today to say that we're delivering on what we've got. And just on the issue of cash, I mean, we obviously just tipped over. I don't want to yell too loudly about the profit because we've just tipped over the sort of cost line, but it is profitable when you take out those non fund loans.
And the people who are looking at our cash, if you look carefully again at the release, we had $7,000,000 I think in December, we got $7,000,000 now. I think it went up by $100,000 which would reflect what you would expect if suddenly you've got most of your CapEx done, we've built the factory. Okay, we still got some clinical trials and so on and so forth. But this is a pretty exciting day for us, and it should be a pretty exciting day for you. I might have some more to say later on, but I think it's better that I pass over to Paul and let him go through the sort of minutiae.
But with a focus on what are all these things he's going to tell you about today doing to the number of people we've got on the road. And therefore, our ability to get to surgeons and to get them using the product. Thank you for coming, and maybe I'll see you at question time. Paul, I'll hand to you.
Thanks a lot, David, and welcome, everybody. And as David said, this is a very exciting period for us as we do enter our profitability phase and I'll cover that now. So I'm on Slide 2 of the slide deck, if people are following offline. Despite COVID and the restrictions that happened, just draw your attention that we did grow the U. S.
Business by 49% in U. S. Dollars the U. S. Dollar comparison over last year.
European distributor markets grew at 53% and our Australian business grew at 25%. Now all of that is in the face of restricted travel, border closures, hospital access being denied. We didn't take part of many of furloughing staff. We actually grew our staff. We pivoted very quickly to digital marketing platform.
We established a wide range of webinars, enabling peer to peer referral of case outcomes and to expand our reach into other institutions. And that led to new account acquisitions, which was also topped off by signing 3 U. S. GPOs. And then we've also managed to complete our Pentium factory, albeit delayed through many COVID impacts from various flows, whether they be builders or machines or engineers for commissioning those machines.
And we've actually manufactured over 1300 fully packaged commercial standard Syntrel hernia devices to begin a large animal study and some other studies that we'll be doing. So it shows that we do have capacity and we've done all of that while managing cash flow, investing aggressively in our sales team growth and to drive revenue and turn a profit. So as David says, quite a significant day for all. Moving on to Slide 3, which is the dashboard. I think this just calls out in very succinct form for you to look at the 49% growth in the U.
S. Business. Overall, Novosorb in Australian dollars going up 33.8% across the group and the group revenues growing by 32%. But our revenue grew, we are now open in recruitment in 5 hospitals within the U. S.
That's going out as we do the contracting, etcetera, in those sites to 25 sites in the U. S. And 5 in Canada. Our employee growth during the pandemic has been, I think, nothing short of spectacular from 78 in 2020 to at the end of June being 106 and today we're north of 110. So we've continued to invest not only in sales people, but also some of the support services with HR, finance, expanding our QA team, expanding our production facility team for NoveSorb BTM and also expanding into R and D resources to accelerate concurrent product development.
Our cash on hand has risen, albeit small. It shows very nicely and I'll leave I went steal all the yarns under. He has some beautiful graphs there to show you the trajectory of cash flows, which will put to bed any concerns at our ability to service our growth in FY 'twenty two. Significant decrease in both capital expenditure and the cash outflows is highlighted there. Slide 4 identifies the geographies and gives a little snapshot of each.
And beside each of those are QR codes and you'll see these throughout our annual report, which will be in glossy format on our website and published within a week. And each of these QR codes take you to a video of our sales directors of each of these regions. And what we were doing in this is, so you can hear, if you like, from the horse's mouth, what it feels like on the ground, what are our teams facing and how are they conquering the market. It's very easy from a distance or a helicopter to be critical of sales performance, why haven't we given 100%. COVID has touched us in many ways, including some of our staff having lost family members during the pandemic.
So for the United States, the business over there itself is actually profitable. We've heavily invested in expanding that team and we'll continue to expand that team throughout FY 'twenty two to generate high gross margin revenues. In South Africa, our partners Ascendis Medical have been doing a fairly good job in what is a very underfunded public health system and they've achieved some fairly spectacular surgical outcomes on some very needy poor people. And we're limited in our private health access there through the health reimbursement system. But we continue to work with Ascendis on building that and they've restructured their team and they now have 14 people in their team who take BTM out into the field on a daily basis.
Our European business has seen significant growth throughout this year and I think you'd all agree that we've been quite rapid in our geographic expansion throughout Europe. I'd like to call out David Hollis, who will meet through video on this QR code, who has done an outstanding job for us in our business development. And we'll continue to invest in expanding that European development team to support our distributors and bring on more geographies. And we definitely have some more geographies that will be coming on shortly in Europe. For the UK and Ireland, the UK in particular has been very heavily impacted by COVID and very restricted in access.
Pleasingly, I mean, you would have all seen that Freedom Day. However, since that Freedom Day, we have had an increase in face to face engagements with surgeons. Our team are now in the operating theaters with those surgeons doing cases. We're in 70% of the burn units now in the U. K.
And our face to face conferences have restarted in the U. K. And Europe and we're attending several of those in the coming months. I'll move on to Slide 5 now, which is further geographies of the Middle East, which has been very much a hiatus for us during COVID with restricted travel and access, but we see good potential to bring on some Middle Eastern markets in FY 'twenty two. For Asia, we entered the Taiwan market through a distributor arrangement and that has been very good for us.
We've had surgeries done in 5 major hospitals there, good outcomes and unlike some other countries in the world, it's a very well sophisticated developed health system within Taiwan. However, the patients actually buy our product. So, there is subsidy reimbursement within the actual hospitals themselves, but there is a co payment from patients who believe in Novozorb BTM, which is nice. In Australia, we've grown the business very well 25% and I'm sure everybody on this call living in Australia knows that travel has been rather difficult and we're all in severe lockdowns at the moment. However, we've stayed engaged with our customers on a regular basis and we've continued to see the growth within the Australian business.
And as David said, we've put a personnel now in Perth and Penny is doing a wonderful job for us new to the organization and building on the foundation slayed by Valerie WA. We've also put Chloe on in Victoria, Tasmania and she's been doing an excellent job. And we've got Lyndall in New South Wales and Lewis in Queensland. Lyndall in New South Wales has covered a vast geography. And I think the important thing I'll cover with Australia will come into SKU mix a little bit later.
On New Zealand, we are very well penetrated in the New Zealand market and we continue to see that business grow strongly. And there's a lot of peer to peer referral and we've made a couple of visits to New Zealand in the past year and we see that after we get through this current lockdown and vaccinations improve, we'll be able to access New Zealand more frequently. But the New Zealand business is a very strong business for us. And when you look at the raw numbers, you might say it's 5% behind last year. But in 2020, it was the White Island volcano tragedy, which did add significantly to revenue.
So in lieu of not having a repeat disaster like that, thank God there hasn't been, we've still managed to grow the business significantly within the New Zealand market. So I'm very pleased with the bonds in New Zealand. Slide 6 just calls out our geographic expansion throughout FY 'twenty one. And you'll see the list of countries and the dates in which we entered those. The reason that we've used distributors in these countries is to gain speed, but it's also that it's a profitable route to market for us.
It's a low cost entry strategy. We make good gross margin on those sales and we're able to reinvest that money in the expansion of our direct business markets. So these markets are contributing significantly to our ability to reinvest in the further expansion of our U. S. Business in particular, which is a large market and a highly profitable market.
I'll now move on to geographical highlights on Slide 8 and give you time to catch up there for the highlights for the USA. Naviosorb grew in sales by 49% year on year and our U. S. Team have been fantastic in their tenacity and their diligence and their creativity in reaching out to customers. We distribute through Owens and Minor, and we are able to service customers throughout the U.
S. On an overnight basis. When there are crises though, our team are there. And even with COVID and all the restrictions and the fear of all those activities, our teams were there on the frontline whenever there was a disaster and people were needing support with BTM. We won new accounts throughout the financial year and we've increased our sales reps from 18 to 36.
Now at the half year, we said that our ambition was to get 30 salespeople on the ground in the U. S. By the end of June, and we exceeded that. And I'm very pleased about that because as David has referred to very often, when we bring on a salesperson, they generate positive revenue very quickly. And so our ability to expand the sales revenues within the U.
S. Are also tied to our ability to expand the sales team. Now there are some who say, well, maybe you've under invested and you could have gone harder. Doubling a sales team means a lot of resources go into supporting those sales people. Recruitment for 1, training, bringing them up to speed, introducing them to accounts, the resource support that we've now got within our system is significant.
We have online training facilities. We have induction facilities. We're improving our IT infrastructure. So that by November, all of the digital equipment that our team in the U. S.
Are using will be the same and be mirrored off our central cloud server. We've added significantly to the roles that support whether they be clinical, marketing or human resources or finance in the U. S. Team. We have expanded our reach into Canada and we have done surgeries on multiple children in the Canadian market through an exemption scheme process.
They have a different regulatory requirement and I'm pleased to say that we're well down our path on accreditation on what's called MDSAP process. We've commenced the BARDA pivotal trial and there will be 30 centers across the U. S. And Canada. And the enthusiasm we've had from centers wanting to join has been quite outstanding.
Surgeons are passionate about joining our trial. They see the value of BTM. Many of the surgeons joining the trial have used BTM in other indications and really want to dive into supporting us with getting the burn PMA approval. We commenced the SYNPAZ chronic wound reimbursement trial. Now, 10 patients were bladed in that initial phase and we took them through to full healing or closure of their diabetic foot ulcers.
And they say that the 10 patients all had closure within 7 weeks. Our final report of that study will be handed to us by the CRO at the end of September, and that informs us on the next step, which is a 100 patient randomized controlled trial to develop more health economic data to support an insurance submission for reimbursement. Just want to emphasize, we already have FDA approval for these indications. This is a financial reimbursement through health insurers. We signed 3 GPAs IDNs during the period and we've got ongoing discussions with more.
These are live discussions and contracting arrangements and we are putting dedicated resources into what is essentially a GPO team within our sales team. And we've developed and executed very well on the digital strategies. Slide 9 for Australia, We grew revenues by 25%, but importantly the volume by 35%. Now with 35% growth in volume, what that's telling you and us is that, the small sizes of 10 by 10 and 10 by 20 are really picking up in our sales volume in Australia. And this is directly attributable to its use in elective surgeries and smaller chronic wounds and reconstructive things like melanomas, excision, white excisions and repairs.
We've got quite a healthy private hospital sales channel now and our team have done a really good job of building out non burn indication use and that's being reflected in our SKU mix. And just for everybody's benefit, our SKU mix of 20 by 40s is now only 49% of our revenue base, whereas many years ago, it was a dominant revenue base. So that will give you an indication that we are significantly growing our non burn indications globally. As I've covered, we've appointed additional salespeople and we've had excellent campaigns within Australia. We'll now move on to Slide 10, which is the highlights of UK Ireland.
Novosorb has been sold to 23 NHSs within the UK. Now that is outstanding. The volumes have not been high due to COVID, which the UK has been severely restricted. We also put on a salesperson in Ireland and very quickly the Irish businesses taken off at a good rate. We've got good access to accounts throughout Ireland and we're seeing that as a very strong driver of business in that region.
We're in 70% of the band centers throughout the UK, and our issue now is to drive further penetration within those accounts. So it's about achieving bigger capture of the burns that come in and also penetration into other departments. Just for emphasis in the U. K, we did not enter through the burns indication rather through multi trauma was the predominant sales rate. We've maintained our staff through COVID lockdown, which has been important for maintaining customer relationships, but also the knowledge within the business.
And that's a significant asset for us carrying forward in our growth trajectory for FY 'twenty two in the UK and Ireland. The direct sales team there are gaining momentum and they are in actual operating rooms. We also are featured on the BBC Storyworks team, where they highlighted John Weeks, who was the 1st patient, who was treated with Novosol BTM and very good interviews with Royal Adelaide team within that documentary as well, including Professor John Greenwood, who since retired but still remains a very good supporter of PolyNova and a colleague for all of us. And Marcus Wagstaff has been fantastic in his support of us in our clinical trials and ongoing support across all of our regions as we train people all over the world. But those, BBC documentaries, I commend them to you and encourage you to seek them out.
There are links on our website where you can see some of these. The next slide, Slide 11, distributor markets, you can see the markets that we entered and we did that in a very short time. And when you appoint a distributor, not only do you have to assess that distributor for fit and drive and momentum of how it's going to add to Polynovo's business, but how we integrate to theirs. And what is their reach within the market? What's their skill set of their teams?
Can they service our brand as we want our brand to be represented in market? And we've had a phenomenal success with 53% growth in sales there and wide expansion. We're at work now on France, Portugal and Spain and we'll enter those markets this financial year. And when we have substance to report on those, we'll obviously be informing the market. To support our distributors throughout Europe, we're also opening a distribution center in Belgium called Moviento.
And that 3PL partner will enable us to service small orders on a frequent basis to these businesses throughout Europe who are going to be building their business quickly. And that cuts cost from rating from Australia to each individual country. It also enables us to be highly responsive in volume supply whenever they have peaks in demand. And we already have stock in that Belgium warehouse today. So as soon as the European holidays are over in September, that will be invaluable support for our business expansion.
I'll now move on to new product development and Slide 13 on Syntrel. And during FY 'twenty one, we completed the factory. It is now commissioned. It's fully manufacturing finished goods and devices, fully packed, sterilized, labeled, branded, finished. It's been a mountain of work.
Our internal team have been pushed and they have really dug deep and delivered an extraordinary outcome. When you think that our customized machines have been made in Germany and then shipped over here and the engineers from Germany have been unable to come and commission those machines. Our teams have worked tirelessly to find ways to commission those machines with video links and building data cables so that the Germans could control those machines and pass on that knowledge to us so that we have a much deeper in house skill set now on how to control these machines and manufacture products. The ultrasonic welding and you can see a picture of 1 of the devices on the slide. The skills that we've now built within our team on ultrasonic welding are very exciting.
One of our team members, Alex, has done a nominal job and we're now going to be commissioning a different style of ultrasonic welding head that it will give the same weld, but it will give us 10 times the speed of what we're currently doing. So even though this product hasn't reached commercial sale yet, we're already at the point of looking at how we reduce waste, how we increase volume capacity, the throughput of the factory and how we drive down cost of goods. And that will continue as a work in progress. The large animal study has started in the U. S.
And that's in pigs and that's looking at toxicology, biocompatibility and the resorption rate. There is some banter out there that this is BTM. This is not BTM. It's nothing like BTM. The only component shared with BTM is the NovaSorb foam.
There is no glue bonding the film to the foam that's done by Ultrasonic Welds And that film is a completely different formula of Novosorb expressed as a solid and melted and extruded as a film. So what we are doing in this large animal study is demonstrating the resorption rate and speed of the film breakdown. And this film will now enable us to make a plethora of other devices that can be used throughout the body where the film is going to be providing strength. And so this step is a significant move for us and that, yes, it supports the Hernia product, but it's also going to underpin future product developments that are in progress. We anticipate filing with the U.
S. FDA in March of 'twenty three for our Syntrel VP device. But in the meantime, we're also accelerating now the next round of products that are coming into the Syntrol family for the rectumor rectus muscle space, which will be a slightly different formatted product. Move on to Slide 14 now. With Novosor BTM, we'll be launching additional sizes, 2x2s and 5x5s.
The first market for these is actually going to be the U. K. With a launch scheduled for September, October. The products have been manufactured, just going through the final QA processes before they can be shipped. We'll also be launching a 20 by 20 product and that's to service some reimbursement requirements in some markets where effectively if we sell the 20 by 40, you wouldn't get paid for the extra material provided and so we're providing a size that goes to the maximum of the reimbursement codes.
For the EU, Australia, New Zealand, we'll also be launching other smaller sizes to address chronic wound use. Other markets will flow after that and the SynPAT product in the next column is going to be using some of those smaller sizes. And we're covered doing that reimbursement trial and the next phase is doing the randomized control RCT. We're hoping to have that reimbursement in late 'twenty three, early 'twenty four and that will open up the market with a TAM of 400,000,000 dollars Novosorb in other devices is an accelerating area for us. We've recruited new and additional scientists into our team as well as some lab assistant support staff to ensure that scientists are doing high value work.
And we've also employed marketing people to service the R and D team in outreach to end users and surgeons and to help build the design profiles of those. We'll be doing some work on breast and we'll be communicating timelines on that probably by the half year as to the development timelines. For the beta cell use of BTM in the treatment of type 1 diabetes, beta cell group in Adelaide are ready now to do human trials and just waiting for COVID restriction lifts to get started on those trials. And they have funding from Juvenile Diabetes Foundation. It looks like a very exciting prospect for patients.
They will be using patients who have had renal transplants because they're already immunosuppressed and that takes out one variable factor in the trial program. So you'll see some more news on that when we get that from our beta cell team, but we'll continue to support them with supply of product. In FY 'twenty two, our strategies remain to be very resilient against COVID. We'll continue our expansion throughout Europe and other geographies. We'll continue to invest in our R and D team expansion.
We want concurrent product development and not sequential product development so that we can bring more of these exciting Novozorb devices to market sooner. We'll execute on our BARDA pivotal trial. We'll launch those small Novozorb BTM products in those markets, and we'll continue to do our clinical trial to build the reimbursement evidence for the SYNPAZ product in the U. S. We're also recruiting patients into a Flendish University trial on venous not arterial leg ulcers rather.
And this has been prompted by the Flinders University team getting healing in toes and limbs where the arterial perfusion is so low, they thought that the only option was an amputation and yet they're getting closure with no NoveSorb BTM. So this study will be looking at what's the mode of action, what's going on in these limbs that enables them to heal inside Nabors or BTM, they can't heal in any other products that they've been using. So this is a quite exciting development for us to partner with them to look at what's the physiological difference of Novozorb in these very difficult pulses. We'll continue to support clinical publications of Novozorb ATM and please see the website. We have, been published on a regular basis and in the last few months, I think there's been about 8.
So keeping up with publications is a bit of a challenge. There's a lot out there and they're truly exciting. And what's rewarding for all of our staff is saying that our product is actually improving somebody's life. So you may look at the tagline as an investor and think, well, that's just a pretty tagline, but all of you are actually having a hand in contributing to a real person's life and their long term outcome and improvement. The COVID-nineteen on Slide 17, I think Spice, we all know where the world has been.
It's been a very ugly place and Sydney is having a mild taste of what most of Europe and the U. S. Experienced for an extended period of 2020. But as vaccinations have increased, so we're seeing the liberation of some of these markets. So for example, Florida is still getting 12,000 new COVID cases a day.
It's a disease clogging hospitals in the southern states of the non vaccinated. Those who are vaccinated are not turning up in hospitals. So as the vaccination rates and motivations improve, we'll see the capacity and flow through of hospitals, hopefully returning back to what they were pre COVID. That will still take some time. If you look on my LinkedIn page, there's a very impassioned from the trauma surgeon at Lakes in Louisiana outlining the challenges that they face.
But across the U. S, we're seeing significant improvement in face to face interaction and hospital access for patients to have procedures done as well. The UK Island have high vaccination rates and hospitals are picking up their cadence on elective surgery and other trauma surgeries. Maintaining our surgeon engagement in Australia will continue and we'll see fluctuations in elective surgery rates. As you can see, we've got several 100 healthcare workers out of our health system here in Victoria today because of COVID and the need to isolate.
So as we do see vaccinations pick up in the 16 to 39 year olds and soon hopefully down to 12 year olds, I think we'll see a liberation of the Australian market as well in capacity to service non COVID hospital requirements. Move on to Slide 18 with inventory status. Catherine and Lim and our supply and demand team have done an extraordinary job for us throughout the last financial year and I'd like to call them out. We airfreight our product around the world. There aren't as many planes to have bellies to fly product around the world is the reality is Australia has been isolated.
We found alternative routes. We've delivered product on time. We've got a good stockpile of products in all of the markets listed there, and we have been able to service every customer on time regardless of where they are in the world. So I'm very pleased that for our brand, we committed that we would be there for our patients and our surgeons and we have been and will continue to be. We've got significant forward inventories in all of these hubs ready to go.
Other matters, Slide 20, the BARDA trial. I think we've covered that already, suffice to say that in progress now and we've got an excellent working relationship with BARDA and that program is very strong. Slide 21, Capital Works. When you have a look at our annual report, there is an actual factory tour QR code where you can see inside our new facility. There's a couple of pictures on here to give you a snapshot, but the capacity we now have to synthesize large volumes of polymer in new labs, extrude film, make microspheres of hard polymers, ultrasonically weld, increased cutting capacity on a new high-tech cutting machine, and also automated packaging where the machine actually was installed on Monday this week.
So within the next month, we'll have that fully commissioned by our QA team, a very significant milestone. So the CapEx committed in the year ahead is only $390,000 So you can see a dramatic fall away in capital investment. That's not to say that we're moving away from future investments. It's that we've now built this capacity to service all the things we need for the next few years and it's small ticket items from here on we need to do. Correct me on the slide here, there is the actual virtual tool which you can feel free to take.
We won't take you through that now. Anthony Kaye, I will talk to you, our COO in that tour. And Anthony has brought a lot of value and support to our team since he joined us in November last year. Slide 23 speaks to the expansion of the team that from 78 to 110 recruiting and inducting and onboarding all of those people with a COVID restriction and using video systems and all the rest has been a challenge. But we've been up to it and I'm pleased that we have aggressively invested in the expansion of our teams and that is driving our revenues and puts us in a very good positive cash generation position for FY 'twenty two.
The U. S. Will remain a large focus for us and we'll continue to recruit and invest into that market as we will in the UK. Research and development teams have expanded and we've recruited some spectacular talent into that team. And I'd also like to highlight that there have been several people in that R and D team who through the hernia project have shown enormous personal growth and really stepped up to the plate when we've been very challenged with gaining outside consultants to come in.
They filled those breaches and done a spectacular job. So particularly, Berkay and Jimmy, I'd call out there is really doing a lot and Jason, who's been a very good addition to our team. Moving on to Slide 24 for the diversity of our team. I'm very proud of our Australian team. People walk into our office and they're surprised that the true multicultural reach of our team and the spread of male and female representation at all levels within our management group.
Globally, we've still got some way to go in increasing our diversity, but we take diversity very seriously as a business. It brings outside mindsets, gives us good insights in communication and capability into multiple markets. And it also makes life and work a lot more interesting. So, we'll continue to invest in this and we do have a positive affirmation diversity policy in place for our U. S.
Business. Moving on to Slide 25, our ESG initiatives. We're developing a very comprehensive carbon offset plan and our desire is to be carbon neutral by the end of FY2023. We've got very little water use. We've got small carbon output, but that's measured and we've had a comprehensive waste program in place.
There'll be a lot more detail on our programs within the annual report And we're increasing our IT infrastructure with the first move to fully encrypted cloud based server system, which happened last weekend. And the integration of a lot of our IT software are driving out the use of paper and print in a lot of our processes and that drive will continue. So stay tuned to our PSG. It is a very live and strong feature of our business moving forward. I'd now like to hand over to Jan Gillen, our CFO, to run through financial highlights.
And Jan, over to you.
Great. Thanks, Paul. Just to touch on highlights that would have been presented by David and Paul, we'll run through them again. Great result in what was a challenging year for all of us and for most businesses. Total revenue up for Polynovo by 32%, comprising a BTM product sales up 34% and part of revenue up 18%.
Total BTM sales of $25,500,000 versus last year's $9,100,000 And we achieved fantastic growth in the second half. BTM sales up 27% on the first half, demonstrating good cadence in the business and great momentum and the impact of the sales reps they've put on, particularly in the U. S. Starting to come through the numbers. And just to further demonstrate that even further, we ended the quarter with a record month, dollars 3,300,000 in sales, and that gives us a really great run rate coming into FY 'twenty two.
Looking across the markets, and the U. S, as mentioned, has grown by 49% in local currency. And again, the second half demonstrating some great momentum with 38% growth in the first half. Australia has done really well considering the numerous lockdowns we're all enduring, growing by 25%. Distributor sales, particularly in Europe and calling out our distributor PMI has done a fantastic job.
Great results in the dark region. They service Germany, Switzerland and Austria, and we've given them other regions to service as well, including Benelux. So doing a great result there and really driving that number. We've had first sales in Finland, Italy and Taiwan and further sales in South Africa and India. And as the Belgium IIIBL comes online in the 1st September, we expect to see a lot more ordering activity from our distributors who've been waiting for that to come online.
So looking forward to reporting back on that at the half. In addition to that, 99 new customers added in all direct markets, 44 of those in the U. S, fantastic result considering it's hard to get into hospitals, it has been particularly in the U. S. During the peak of the pandemic.
So it's a great achievement by our sales team finding out finding different ways to access customers and introduce our products and our digital marketing strategy is clearly working there. And touching on distributors, 7 new distributors signed for the period covering 9 markets, so most of those in Europe and obviously including Taiwan. Moving on to other operating results. So operating expenses, I've carved out the share based payments on realized forex loss, so you can see the underlying result. Of course, it's going to go up.
We're investing and growing the business. Operating expenses have gone up by 26%. But you can see the headcount there going up by 36%, 78% to 106 staff and that's to be expected, the cost base to go up as we invest in the business. In addition to that, we've entered 8 additional EU markets by signing the 6 new distributors. Some initial cost in getting all that in place, But as Paul mentioned earlier, it's a low cost revenue model and all gross margin pretty much does drop straight through the bottom line.
So yes, expect no further additional setup costs because they are set up and we look forward to enjoying the profits that come from those arrangements. Other reasons, cost increase, we've expanded our regional operations in the U. S. And Australia, just general business expansion. And as mentioned earlier by Paul and David, the U.
S. Sales team has increased to 36. This time last year, it was only 18 staff. It's a great way to start the year with a big sales team on board in the U. S.
Like that. What's net impact? We had a small profit excluding non cash items. So, dollars 259,000 EBITDA excluding non cash items, dollars 635,000 and there's a reconciliation on Page 30 as to how we get to that. So we break even during FY 2021 and we got there through strong revenue growth during a pandemic and we've managed our cost effectively as well, so a really pleasing result.
Looking at cash flow, cash on hand ended 0.4% up from the half, which is a great result. So our cash burn was only $250,000 on an accounting basis. We've broken even and made a small profit for the year. On top of that, our CapEx investment has dropped off now that the factory is built, the facility. We've got all the equipment on-site.
We've just got some committed CapEx just to fix up the remaining contractors' invoices over the next couple of months and that adds to just under 400,000 So cash is in a great position. The business is doing well in terms of breaking even. We've got a great run rate coming into this year and expect to see this business start to turn a continual profit and improve cash flows even further. Just a summary of the overall result there. And as mentioned earlier, I'll put a reconciliation at the bottom there, so you can see how we get from the net loss after tax to our underlying profit excluding non cash items.
So product sales up 34%, revenue overall up 32% including BARDA. Pleasingly, gross margin on sales up 3%. We've got higher throughput through the facility. The operations team and our COO, Anthony, did a fantastic job on sweating the assets and looking for efficiency going through our ground operations and manufacturing and it's great to see coming through the numbers. Employee related expenses up as mentioned before because of the increased headcount.
Corporate admin and overhead expenses up slightly at 10%, but not going to grow at the same rate of sales. We are starting to see those economies of scale and it's coming through in the net result being an underlying profit. R and D spend, we're up 55%. So we've expanded the team. We've put on a Director of R and D.
We've got the DFU trial underway, the hernia animal study underway and also investing in other tissue technologies. Net loss after tax, dollars 4,600,000 does include $2,600,000 share based payments, meaning expensing of share options. It's not a cash payment, just so you know, it's just an accounting thing. So net result after all that underlying profit of $260,000 so great result. So just to sum up, as David mentioned at the start of the call, achieving breakeven is a significant company milestone.
Great to have achieved that this year. We've entered a lot of new markets successfully. We've improved our gross margin. Our cash is stable and will grow in this half as we generate cash flows, a really great result for the year all things considered. Looking to the future, FY 'twenty two, we'll continue doing what we've been doing since we entered the U.
S. Market 3, 4 years ago, and that is reinvest our cash flows to grab market share, enter new markets and invest in developing new products. So look, I think at this point, we'll hand it over to Q and A time. So we've got 7 covering analysts that are going to ask some questions today. So I'll hand that over to the operator to introduce them.
Thank you.
Thank you.
Your first question comes from Leanne Harrison with Bank of America. Please go ahead.
Hi, good morning, all rather good afternoon, Paul, and good afternoon, Jan. Congratulations on getting that good momentum in the second half of twenty twenty one. So if I could focus, I guess, on the U. S. Market now, I guess, what we're seeing is increasing COVID rates, as you spoke about, in some of the southern states.
In terms of, I guess, the restrictions in place with hospitals, are you still getting good access to the hospitals? And secondly, in terms of volumes of surgery and the like, would you say that that's more driven by, I guess, lockdown restrictions or limits on movement across the United States as opposed to actually being able to access hospitals?
Hi, Leanne. Thanks for your comments and the question. We had a very strong July as well backing up June out of the U. S. Showing growing momentum.
August is still going strong for us. The U. S. Isn't having lockdowns as such. People are traveling fairly freely.
Where they've got some choke holds or bottlenecks is in some of the traumas where ICU beds are congested. So that surgeon or professor of trauma in Lakes in Louisiana highlighted that many of her patients would now spend days in an ER on a gurney rather than getting treatment as quickly as they should have because the ICU bed might be full COVID patient. So overall, our access to hospitals is still fairly good and shown improvement and travel has improved. Some hospitals still have restricted access as a precaution of bringing COVID into the institution. But within those, the sales teams are able to meet with surgeons in coffee shops or off-site.
So there's still those interactions happening and we see the U. S. Getting rear each month, not going the other way.
And if I could just, I guess, continue on the United States. Obviously, you've added a fair few new salespeople into your team. Can you give us some color in terms of what's the focus for them in the next 6 months, whether it's targeting new customers or increasing the depth of penetration amongst existing customers?
Yes. To use the American vernacular, they need to chew gum and walk at the same time. So I want It's not a matter of being greedy, it's just the reality that we've got a lot of headroom for growth in new accounts, but also that the fast growth of revenue can also come from your existing accounts. So they're not mutually exclusive of each other. You could take an area just pick a hospital, say LSU in Louisiana.
Yes, we've got a large volume of the burn business there and we've got increasing levels of trauma business in LSU, but it's also then reaching out into the general surgery community there. What's the necrotizing fasciitis, hydrinitis, reconstructive or melanoma excision or a general surgeon who might do a minor trauma that could use BTM. So our teams are doing both and what they're tasked to do is to do both. Now for the GPO growth, we are putting people into that strategic driving team to support our sales and marketing activity in opening up a faster rate of GPO penetrations. So you'll see both new accounts and penetration increasing in FY 'twenty two.
Okay. And if I could move on then to the U. K. So you mentioned that you're looking to, I guess, launch the new sizing in the U. K.
First compared to other markets. Can you give us a sense? Obviously, there's fairly large opportunity in the U. K. With respect to some wounds and the like.
Can you give us a sense of what the lost revenue might be given that you're shifting from bigger sizes to smaller sizes in that market versus the expectation of higher volumes?
Yes. I don't think we're going to see a loss of revenue, quite the opposite. Where, say, 10 by 10, taking your theory of whether they wouldn't buy 10 by 10, but they'll now buy a 5 by 5 and we will go a 10 by 10 sale. It's that they're using them now on a limited number of patients who potentially could be accessing it. And some of that is because of price.
So offering the 5x5 is actually expanding the breadth and scope of the number of patients we can service. And that's coming from those surgeons who say, well, it's been fantastic on these patients, but I'd actually use it on all of these other smaller ones that I'm currently not using these types of products on. So I think we'll see a good revenue drive from F5 by 5s and 2 by 2s versus a loss of revenue from 10x10s. And bear in mind, we've got a low penetration of the UK market at the moment. So those other SKUs will continue to grow as will our penetration of the burns units, capturing more of the actual large size burns as well.
Thank you. And just one last question, obviously, getting good exit rates in the United States for 'twenty one. How does that compare to, I guess, your other markets? So what you factor in being, I guess, Europe, U. K.
And other regions for, I guess, June the last quarter to June 'twenty one and then what you're seeing to date?
Yes. Europe is actually picking up their speed with surgical activities quite aggressively. So I think we'll continue to see good strong growth in Europe. The U. K.
Has been a bit of a lag compared to the U. S. In the scale and volume of that acceleration. That's now starting to pick up pace. You'll see that the English are back to international travel and going to the soccer and then having the brawl in the street afterwards.
But the actual NHS throughputs are starting to increase and the elective surgery rates are improving. For Australia, we're on a very good growth and even last month where Sydney was in lockdown, we had very strong sales in New South Wales. So I think the underlying demand for the product is going to be there when you've got products who can't be delayed, they need product, surgeons or service, but it is very much a watching brief in Australia for the next 3 months as we get the vaccination numbers up as to see what is the impact of elective surgery as our hospitals are furloughing healthcare workers, which is problematic.
Great. Thank you very much.
Thank you. Your next question comes from Rachel Harwood with Macquarie. Please go ahead.
Yes. Hi, Paul, Yahn, David. Thanks for taking my questions. First question is just on GPOs. So how are your sales through GPOs progressing?
And then just to clarify, are those 3 GPOs new? Or does that include Premier and then other previously announced GPOs?
Hi, Rachel. Thanks. They're the already announced GPOs. And they've bought quite a few new accounts to us in the time that we've been with them, not a large volume to date. But that's one of those things that is gaining pace and why we're going to be investing more in the GPO servicing team as a sort of subgroup team.
Each salesperson will continue to service all the accounts in their area, But from a head office interaction and reporting process, we'll have some more resources in the business. We've already set up a system within our ERP system to track GPO sales and monitor those growth rates and trajectories and that's building well. At the moment, we'll see further acceleration of that in FY 'twenty two as it matures.
Yes, great. Thanks for that. And then just a question on pricing. Are you seeing any changes in pricing either in direct sales or through the GPOs or distributors at
all? Yes, we've had some small increase in the average selling price. So as a blanket for the U. S, for example, used to be $8.50 it's now nearing $9 as a total average per square centimeter. There are some accounts and some SKUs that have got higher growth rates than that.
We'll be taking a managed approach to how we increase pricing over the coming couple of years as we have given commitments to our customers in the past that we wouldn't raise prices in the 1st couple of years because that was an entry level strategy of our competitors at various times, which has left a lot of accounts wary about swapping to something that they see is good new bringing them a saving only to then get hit with savage price increases once it's institutionalized. So we've been taking those up gradually with new accounts and also with our GPOs. We put a nice floor in there that gives us a price rise and assists in the margin increase as well.
That's great. And then just last question for me. Just I think you touched on it briefly, but could you maybe just expand on how you're seeing elective procedures recovering and any regions particularly still impacted by COVID? And then do you expect some of these southern states for the hit with sorry, the Delta strain to be affected in FY 'twenty two?
Yes. I think COVID is going to be fluid. Guessing through that crystal ball is difficult. I can't give a conclusive on the time of knowledge on what's going to happen. But from what we do see is that where vaccination rates are high, things seem to be relatively normal.
Some of the southern states where vaccination rates haven't been as high, there is some ICU bed congestion. And there are some websites that you can find that will give you a daily tracking of ICU bed occupancy rates throughout the U. S. And some of those southern states are impacted. But we've weathered that storm in the past, and I think the difference is that in FY 'twenty one, you could class the world as COVID reactive.
We didn't really know what we're dealing with as a community. We use lockdowns and stayed home and stopped a lot of businesses. Now with vaccinations, it's more COVID resilient. So if you look at Europe and the U. S, then people are traveling quite widely and freely.
People are taking family holidays to Florida. Now there are 12,000 new cases a day in Florida, but you don't see people wanting to go on a family holiday to Sydney at the moment with 1,000 cases a day. So I think the difference is that there will be intermittent pickups and congestions, but overall, the market is improving as COVID becomes normalized within how we manage it. It's managing rather than avoiding.
Thank you. Your next question comes from Elyse Schappeiro with Bell Potter. Please go ahead.
Hi, Paul. Hi, Yan. Just looking at the sales force, obviously grew to 36. And I think David mentioned in his initial remarks adding 4 more. How many I guess, what's the goal?
How many would you like to get to?
Well, I think it's a matter of that there's no point just giving numbers of we're going to be at X number. We will continue to invest in the expansion of the sales team throughout the year to drive sales and drive new geographical reaches. And to the earlier point of deeper penetration of accounts. This financial year will probably be somewhere close to 50 by the end of the financial year. But the caveat on that is we may well go above that If we see an opportunity to invest more and receive more revenues, then we'll keep going.
So it's not a hard in stone set number. It's going to be as we can drive and recruit, we will. And pleasingly, the Board has never said we shouldn't be recruiting quite the opposite. They're sort of giving us the imprimatur to go forward and recruit and drive sales and revenues that there's self funding. So we'll continue with that strategy.
And we've managed the cash flows very well and we think that we've got good cash flows coming in and good growths that will underpin that ability to aggressively grow our team to somewhere around the 50 mark this financial year and possibly more.
Got it. Thanks. And with that 50, are you targeting kind of certain geographies or certain types of hospitals that you maybe weren't covering as well before?
Yes, it's a mix. So there are some new geographies like Nevada, for example, is 1 and Utah. But it's also to David's point earlier about should we have 7 in California. Today, we've got 3 in California, but we're expanding that more. So as sales team, sales people have smaller geographical territories, they're enabled to penetrate deeper.
One of the other things we're bringing on is what's called the sales associates. And some of these sales associates will be working with some of our territory managers so that they can maintain and penetrate an account bringing that territory manager to go and conquer new ones. So there's a multitude of strategies on sales expansion that are going on within the business, but all drive that where we can realize revenue in very quick time. Thanks.
Thank you. Your next question comes from John Copeland with Evans and Partners. Please go ahead.
Thank you and good afternoon, Paul, Jan and David. First of all, congratulations on achieving breakeven last half. It's clear that you're very excited and enthusiastic about what's ahead of you. I think that's great. I was also just wanting to sort of delve a bit deeper into that headcount question just before and perhaps even on a more holistic basis.
As it's clear to everyone, I think that Polynovo is still in high growth phase and that you're rightly and justifiably growing headcount to drive that growth and accelerate that growth. So if you're able to give us some guide as to your planned step up in headcount over the next 12 months, that would be much appreciated.
Do you mean in total number or do you mean sales or what's Yes,
in total number and ideally the split between sales staff and support staff, if you can.
I don't have the numbers in front of me. So John, maybe we can get back to you with granularity on that. But the majority of them are going to be sales staff. There's another few that we'd like to add into the R and D team. There's probably another couple to add into finance.
And we've also got an outside consultant working with us on HR structure at the moment to make sure that we're developing our structure so that we can service rapid revenue growth and customer service. So, that's a work in progress and it's still got a couple of months to run. So that will inform us a little further on what the total expansion should look like so that we can get on the front foot and avoid growing pains as we move forward. But the majority of investment is going to be in sales heads. We're adding another couple to the UK at the moment.
We're looking at a couple for the ANZ region. And then we've got more obviously to add to the UK plus we'll expand out some of the European distributor servicing team because poor old David is doing a spectacular job for us over there, but one person is fully occupied and we need to give him some more supports as well.
Okay, great. Thanks for that color. But I mean just looking at where we sit today at 110, would about 150 or 180 be appropriate for the end of FY 'twenty
two? Not 180, John. Not 180, plus 140.
Yes, I was just trying
to figure that. But 150, I mean, what should we be thinking, 150, 120, a rough ballpark estimate would be helpful?
Total staff, you'd be looking out for the
140. Okay, excellent. Thank you. And so just with that in mind then,
are you able to give us
a bit of an indication as to what sort of top line growth you're targeting this year?
I'm not sure David Williams, if you'd like to chime in there or whether you want to leave it to Jan?
Are you on mute, David?
No, I can leave it to Jan because I mean it's pretty clear we've already said we're going to put in 14 people more or less in the U. S, couple in Ireland, England, couple more here, few more to roll out into Europe. In Australia, we're looking for people to do $750,000,000 per sales each. We've got a margin over 90%. So it's a self funding numbers game really.
And if they're not self funding, they get moved on.
Yes, very much appreciated. But in terms of sort of ballpark figures, you can't give us a broad growth rate that you might be targeting with the sort of additions you're making to the sales team?
John, we're not giving guidance, as you know. But if you look at our growth rate this year where we had half the access to hospitals, we're coming into FY 'twenty two where we're closer to 70%, 80% in terms of access. We're expecting our growth rate to do a lot better this year than the 34% we've experienced this year, particularly in the U. S. So will be double?
No. But will it be a solid growth rate? And in light of what we don't know, we all don't know how COVID is going to play out continually, but things have changed. The momentum in the business is strong and you can see the cadence in the last quarter gives us a really good run rate and gives you an indication of what the growth rate may be. So I'll leave it to your modeling expertise to land on a number, but happy to assist any further queries as we always do chat.
Okay. That's much appreciated and understand there are a lot of uncertainties. So just one final question from me. On the CapEx front, I see you've got $400,000 committed for this year. But just sort of what value would we be thinking to be eventually reported?
Would it be somewhere in the realm of $1,000,000
I guess, no. So I mean the $400,000,000 that we're going to pay is just for the last couple of invoices for the build of the hernia clean room and the final installment of the packaging machine, which arrived on Monday. On top of that, it's just going to be incidental requirements in R and D and manufacturing, tooling and things like that. So any what products we're developing and what stage are red will drive that, but it's going to be very much a CapEx light here. I can't give you exact number at the moment, but it's not going to be over 1,000,000 euros
that's for sure.
Your next question comes from Andrew Payne from CLSA. Please go ahead. Yes.
Hi. Just a quick one from me. Just looking at the Australian BTM revenue, the revenues grew 25%, but volume was up 35%. So that looks like it's reflecting a fall in average sales price, which you called out from penetration into smaller wounds and elective procedures. Can you just provide some insight into that mix going forward?
And if there are similar trends being seen in the U. S. Or other markets?
John, I'd celebrate seeing that continued trend. As I said, our average selling price in the U. S. Has actually gone up. Small sizes don't always equate to falling average selling price, particularly when you're adding volume to your business.
So, if we were only selling 20 by 40s and only to burn, you'd be celebrating the high average selling price of a device. But you would getting you'd be getting very sporadic income based on incidental unpredictable trauma. So this is actually giving us good cadence, good move towards predictable incomes and it's per square centimeter, it's not a dilution.
Thank you. There are no further questions at this time. I'll hand the conference back to Mr. Williams for closing remarks.
Well, thank you everybody for coming. It took a lot longer than I expected, but I hope you appreciated the detail and I hope you take away the sort of helicopter view that I started with, which is this really is a numbers game and it should be self funding. We've got our costs pretty much under control. They will go up because we put on new salesmen but as I said they'll self fund themselves. We think this is going to be a very exciting year in terms of guidance not given any, but I think we said that the last quarter of FY 'twenty one was extremely strong.
The last month was a record and July has continued very strongly as well. But it's patchy, who knows what's going to happen in the southern states of the U. S. But we're continuing to book people on. We probably didn't make as much out of it as we could have, but we've been very strong in webinars, both driven by us, but also some doctor groups who are driving themselves to their colleagues around the world, especially out of Germany and out of some Indian doctors out of New Zealand.
So we're getting a lot of there's a lot of social media happening that's kept us in the game. And even though 49% growth rate in the U. S. Might for some people be disappointing, for me, we celebrate that because that's just the tip of the iceberg about what's now happening over there as the country opens up and what we see happening in Europe as well. So stay with us and thank you for being shareholders and thank you very much to all our staff in particular.
So talk to you soon.