Good morning, and welcome to the Novacyt Investor Presentation. Throughout the recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated in the right corner of your screen. Just simply type in your questions and press Send. The company may not be in a position to answer every question received in the meeting itself, but the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll, and for the benefit of those joining us from France:
I'd now like to hand you over to the management team from Novacyt. Good morning.
Good morning, everyone, and thank you for taking some time to join us this morning. Just by way of introduction, I'm delighted to be sat here today, you know, having newly been appointed as the CEO of Novacyt on the first of May. For those who don't know me or worked with me before, I've spent the last 6 years being the CEO of Yourgene Health, you know, driving the acquisition strategy and the growth strategy of that business. And prior to that, I was the CEO of an organization called the BBI Group. So I've been in the diagnostic industry for about 25 years, and I'm really pleased and excited to be here today as your CEO. I'd just like to hand over to Steve to do a quick introduction as well. Steve?
Thanks, Lyn. Good morning, everyone. So I'm the CFO. I was appointed to that role at the start of this year. Prior to that, excuse me. Prior to that, I was Group Finance Director for around four years, and I've been at Novacyt now for around seven years. Prior to that, I spent around 10 years working at Hewlett-Packard in various different roles. Thank you.
Excellent. Thank you, Steve. Okay. So I think the first sort of slide I really wanna run through is kind of how the group has been structured post the acquisition of Yourgene Health. So, you'll see from this picture, we've got the Novacyt Group, which is obviously our head company. And underneath that, we've got three very distinct business units. On the left-hand side, as I'm looking at the screen, you'll see Yourgene Health, and this is where we have our clinical assays, our DNA size selection, and the, you know, the core product offering from Yourgene Health. In the middle, we have Primerdesign. These are our research qPCR kits. This part of the business has got a tremendous reputation in the global marketplace for developing primers and probes to make products.
And we've taken Primerdesign back to its core offering. So this is research qPCR kits. And then, on the right-hand side of the diagram, we have our IT-IS, and our Ranger Technology. This is where we're making instruments or machines that our customers can use to run our content. The main markets that we work in, in human health are reproductive health, precision medicine, and infectious disease, and in our non-human applications, and in our research use-only markets, it's veterinary, animal health, food, water, agriculture, and plant genomics. Just turn to the next slide. In terms of our footprint as a business, the picture you can see on the left-hand side of your screen is our Manchester location. In addition to that, we also have a facility in Southampton and a facility in Stokesley.
We have a small sales office in the U.S., we still have our Taiwanese facility, and I'm sure we'll be giving you an update on that a bit later in the presentation. We have a commercial office in Singapore. We have a manufacturing and R&D presence in Canada. And more importantly, we've kind of got commercial presence in over 65 countries now. So truly a global player in this market space. We're headquartered, obviously, in France. We're listed on the stock exchange, on the AIM market in the U.K. and on the Euronext market in France.
Now, before I hand you over to Steve, who's gonna run through the numbers and give you an overview of our financial results, I'd just really like to talk about some operational highlights that the business has been through. Obviously, the most... You know, the biggest thing that happened to Novacyt in the last 12 months was the acquisition of Yourgene Health. You know, Novacyt was pursuing a clinical strategy and was trying to develop a clinical business to support the RUO business. But buying Yourgene Health meant that that was completed on day one. So the acquisition of Yourgene Health has brought, you know, a complementary set of clinical products and services to Novacyt. You know, and I think that was a significant achievement of the business in the last 12 months.
In addition to business development, we recently announced that we've become a compatible partner for PacBio. PacBio have launched a new sequencing capability in the global market, long sequencing, and they've, you know, after some trial and some validation work, think that the Ranger Technology really enhances and supports their new systems. They've put about 200 new sequences into the market in the last 12 months. And I'm delighted and very proud to be able to say that our Ranger Technology supports that platform in the market. The regulatory landscape is changing constantly in the industry, and for those of you that keep an eye on the market space, you'll have read a lot about the IVDR certification.
I think the need for IVDR has been pushed out again by another year or two, but Novacyt remains ahead of the curve on that. You know, we've already got our DPYD assay accredited, and we've already submitted applications for our reproductive healthcare range of products as well. So, you know, being able to take the right product to the right market with the right regulatory requirements is essential. And I'm delighted to say we've made significant progress on our IVDR journey with a great quality team that we have at Novacyt. The board's been strengthened. Obviously, myself and Steve have joined in our capacities as CEO and CFO, but we also welcomed Jo Mason onto the board. Jo's got extensive experience developing really cutting-edge molecular products.
I think as we move this business forward, content is gonna be the key to our success. Having more products and services, you know, is really important to the organization. In addition, you know, we welcomed John Brown onto the board as well. Extensive experience in the diagnostic market, as well as the general city stock market. So, you know, real enhancement and bringing a lot of industry people onto the Novacyt board. In terms of product development, we've launched MagBench, which is an automated DNA extraction platform for our NIPT workflows. The Primerdesign part of the business has launched CO-Prep, which is another automated DNA and RNA extraction. So these are things that allow our customers to process samples more quickly.
Primerdesign, rather excitingly, has launched master mix alongside its sort of core assay offering. So historically, if you were to buy an assay from Primerdesign, you need to go and buy a master mix from another provider. We now make our own master mixes available to the market, so it's kind of a range sell that we've launched this year. I'm gonna talk a little bit more about products and services and where our growth plans are, but before we do that, I'm gonna hand over to Steve, who's gonna talk us through the numbers.
Thanks, Lyn. Good morning, everyone. It's great to be with you today to chat you through the Novacyt FY 2023 financial results. Now, as you read the financial statements, please note that they cover 12 months' worth of trading activity in the legacy Novacyt business, with only 4 months' worth of trading activity in the legacy Yourgene business. This is the post-acquisition period, September through to December. So we kick off from a revenue perspective. Group revenue totaled GBP 11.6 million for the year, down from GBP 21 million in the prior year. Now, this decline was driven by a reduction in COVID-19 sales of GBP 14 million, offset by the inclusion of Yourgene revenue.
If we look at revenue from a business unit perspective, the legacy Novacyt business delivered sales of GBP 6 million, and that was split GBP 5 million Primerdesign and GBP 1 million IT-IS, with the remainder, GBP 5.6 million, delivered from Yourgene Health. The Yourgene Health share was just under 50% of the total group revenue. Now, what we expect to see going forward, is that Yourgene Health will deliver over 70% of the total group revenue in the future. From a geographic perspective, the acquisition has really helped broaden Novacyt's international reach, and if we look at it from a regional perspective, the top three regions are as follows: In first place, the UK delivered just under 30% of total revenue, and that's where we have the largest number of sales staff on the ground, as you'd expect.
Next, Europe, excluding the UK, delivered around 25% of total revenue, or GBP 2.9 million. Now, what we expect to see going forward there, is that France is gonna be a key player because of its strongly established NIPT customer base that Yourgene brings with it. And then finally, the Asia Pacific region delivered just under 25%, or GBP 2.8 million. But importantly, we saw a year-on-year increase of nearly 50%. And again, that's because of the inclusion of Yourgene sales, where they have a heavier number of in-region sales staff there that is helping to drive growth in that area. From a gross margin perspective, we delivered a gross profit of GBP 3.7 million, or 32% for the year.
Now, the margin was heavily impacted again by further stock provisions, mainly as a result of providing for all the remaining COVID-19 associated stock. Now, if we exclude the impact of these items, that totaled over GBP 3.3 million, the gross margin would have been in excess of 60%. And this is an important metric for us as a business, this is what we're looking to achieve post-acquisition. If we move on to OpEx costs, group OpEx costs fell by around 10% to GBP 1.9 million, and that's largely as a result of the restructuring programs that we've undertaken during the year. Now, we would have seen further reductions in our OpEx costs, but it was offset by the inclusion of costs in relation to the Yourgene Health business.
From a headcount perspective, we kicked off the year at Novacyt with 137 staff, and it fell down to around 118 pre-acquisition. And then we closed the year, post-acquisition, with around 237 staff on the books, and we're at a similar number now. Post-acquisition, we've made really good progress on reducing the bottom line cost of our business, and we've done actions that will deliver over GBP 4 million of savings to the bottom line. However, we're not finished. We're still on this journey of right-sizing the cost base of our business, and we need to do more. From a profitability perspective, our EBITDA was broadly flat year-on-year, at a loss of GBP 13.7 million.
Now, in addition to the EBITDA loss that I just talked us through, we've seen exceptional costs totaling around GBP 11.7 million, and it's made up of five key items. Firstly, there were impairment charges that totaled around GBP 5.8 million, and that was split GBP 4.1 million in relation to Primerdesign and GBP 1.7 million in relation to the IT-IS acquisition. Next, we incurred around GBP 1.9 million of costs in relation to the ongoing DHSC dispute as it nears trial. We then incurred GBP 1.7 million of acquisition-related fees. Now, importantly, this excludes the deal advisory fees incurred by Yourgene Health, which totaled around GBP 2 million, as these are treated as a pre-acquisition cost. Next, we incurred around GBP 1.6 million of restructuring expenses, and that was predominantly redundancy payments.
The balance, around GBP 700,000, was a combination of other expenses. Our other financial income and expense netted to an income of just under GBP 1 million, and within that, we received over GBP 2 million of interest on our cash pile. So this meant overall, the group reported a loss after tax attributable to the owners of the business of GBP 28.3 million. Now, if we just focus on the results from a pro forma perspective, as if Yourgene Health had been acquired on the first of January, 2023, then the group would have reported sales of GBP 22.8 million, and we would have generated a net loss of over GBP 50 million for the year. Now, Yourgene Health in-house pre-acquisition results included various one-off charges totaling over GBP 13 million, and there were two big items in there.
First one was obviously acquisition-related costs, and they totaled over GBP 8.5 million. And one of the big items in there was the GBP 6.5 million contingent liability that crystallized upon the acquisition. And then there was around GBP 5 million of other exceptional costs, covering items such as stock provisions, bad debts provisions, and impairing the ROU assets. As such, if you look at the pro forma loss for the year, it's not a good indicator of our likely future performance of the business. Can we just turn to the next slide? So from a balance sheet perspective, what you'll see is that there's a number of moving parts, and nearly all of the balances have changed, and that's all by the acquisition. And that's because—Apologies about that, if you just heard the phone go off.
So the balance sheet has changed substantially year-on-year, and that's as a result of including all the assets and liabilities of Yourgene Health now in the Novacyt balance sheet. If I just pick up a couple of the big items. Goodwill has increased year-on-year, substantially, and that's as a result of creating a circa GBP 19 million asset on the purchase of Yourgene Health. And this has been offset by impairment charges totaling around GBP 4.4 million in relation to Primerdesign and IT-IS. And the other large mover is ROU assets and lease liabilities that have increased by over GBP 10 million. And that's predominantly as a result of the inclusion of the long-term lease liabilities associated with Cityl abs and Skelton House in the UK.
From a cash perspective, we closed the year with around GBP 44 million in the bank, down from GBP 87 million at the start of the year. Now, the main driver, clearly, for this decrease in our cash position was the acquisition of Yourgene Health, and that consumed in excess of GBP 27.5 million, including the cash consideration that we paid. Now, that was a quick run through of the FY 2023 financials, which can be viewed on the company website. Now, I'll just give you a quick update of how we've kicked off the year from a trading perspective. Perfect. So for the first four months of this year, April, until the end of April, we delivered sales of just under GBP 7 million, GBP 6.9 million, and the Yourgene Health business contributed to over 70% of that number.
This run rate is a reasonable indicator of our likely full year revenue position. From a cost perspective, as I mentioned earlier, we've delivered savings already that will deliver over GBP 4 million this year, and we're still on this journey of right sizing the cost base of our business. As a result, we're not in a position to give full year guidance at this stage. From a cash perspective, we closed April with GBP 36.3 million in the bank, down from GBP 44 million at the start of the year. So cash outflow of GBP 7.8 million in the first 4 months of the year. There were a couple of large exceptional items in there that include items to do with the DHSC legal fees and the Coastal Genomics deferred consideration.
That was a short summary of how we kicked off this year, and I'll now hand that back to Lyn, who will give us an update on the integration.
Thank you, Steve. Very comprehensive overview on the figures there. Okay, looking at this slide, I think the most important bullet for me on this slide is probably the last one. We are obviously on track to deliver the GBP 5 million of annual on cost savings that we identified at the start of the, of this integration project. I think more importantly, though, as, as, as Steve has said, we've delivered about 4 of that. I think there's a lot more to go after. You know, our, our corporate mantra, I think, for the next 12-24 months, has got to be to cherish our cash.
You know, cash is king currently in the marketplace, and we wanna make sure that we really look after the cash that we have in the business, so that we can invest in R&D, and we can push the right products into the right markets. So there's a key focus at the moment on making sure that we rightsize the cost base of this business, and Steve and I are working very, very closely together on that. We've kind of been a partnership for only a month now, in terms of me being in my seat. So, we're gonna take our time over the next couple of months to really, really get an understanding of the numbers, get an understanding of what the potential synergies and cost base of this business could really be.
Then hopefully, we'll be coming back to the market in the future to give you an update on what that looks like. So that's the real focus of the integration project for me. It's preserving cash and making sure that we cherish our cash in this organization. To do that, we're gonna be utilizing the strength and expertise that we have from this combined leadership team. I mean, for existing Novacyt shareholders, when you, you know, when you acquired Yourgene, you acquired a lot of, you know, diagnostic horsepower and experience. And it's been a joy to watch that experience being deployed all across the business, you know, in all of the facilities, in all of the product ranges, in all of the decisions that we make. We do bring a much wider product technology portfolio to the table now.
You know, Novacyt was investing in clinical and trying to develop a clinical market. Novacyt doesn't need to do that now 'cause it fundamentally acquired a clinical business. So we've accelerated the route to market, and we've got a very strong end-to-end customer offering. So whether it's assays, whether it's custom development, or, or whether it's hardware or technology to use those assays, we've got an offering for our, for our customers. We spent a bit of time at rationalizing our distributor and our sales, organization. As I said, you know, there's not much synergy between the types of customers. You know, a Yourgene customer is typically a clinic that's running a result that's gonna make an impact on a patient outcome, whereas Primerdesign or the old legacy Novacyt business is more kind of research institutions, academic centers, et cetera.
So there's not a huge crossover in terms of the actual customers that both businesses supply, but there is a crossover in the way that we get to the market. You know, most of our distributors have research and clinical sales, so we've been able to really rationalize and leave ourselves with a high-quality distribution network and a direct-to-customer market network as well. We've refocused the Primerdesign business to being an RUO business. I just mentioned that, you know, we bought a clinical business when you acquired Yourgene, so we don't need to redevelop that or recreate that. That exists now within the group, post the acquisition of Yourgene. Primerdesign was known for being the best developer of primers and probes for the research global market. You know, world-class leading organization in that space.
We've gone back to basics with that, which will have more conversations with customer. We've made our regulatory systems in that side of the business fit for purpose, and our clinical systems, which are lumpy and complicated, you know, nice, flexible research-use quality systems, which allow us to return or respond to a product inquiry within about two weeks and get a product out the door. We supply master mix with those products now. So there's a real focus on bringing Primerdesign back to its past glories. You know, and the initial signs are really positive in that side of the business. We've completed the integration of all the operational departments.
You know, we've cleared up the back office, whether it was two teams, there's now one team, where we've been able to share skill sets and experiences. We've certainly done that, which has led to the elimination of, you know, multiple duplicate corporate functions. We've got a strong balance sheet to accelerate growth in key areas such as NIPT, Ranger, precision medicine, you know, and the rebuilding of the Primerdesign business. You know, and when I first discovered that Novacyt were interested in acquiring Yourgene Health, as being the CEO of Yourgene Health at the time, it just felt like an amazing fit. You know, Yourgene Health had all of these opportunities, but I found it difficult to raise money and had a cash constraint.
You know, post-COVID, Novacyt had all this cash and was wondering in what direction to take the business. So by putting the two entities together, I think personally, you get a really, really strong story, and Steve and myself are gonna spend the next five to six months, guys, keeping working on the cost base, making sure we have very accurate numbers, so we can come up to you and share those updates with you in due course. Again, there's gonna be a bit of repetition now. I kind of sort of laid out how the business is split out. You can see that from this diagram. You know, on the left-hand side, we've got our clinical and IVD products, non-invasive prenatal screening, and cystic fibrosis, rapid aneuploidy tests.
These are all things that mums and babies get tested with at their either their first trimester or when baby is born. Our precision medicine, DPYD, I'll talk a bit more about that later on. And our infectious disease products, the Winterplex products, all of those get sort of lumped into one clinical category using the same sales force, distribution, regulation, product management, et cetera. Then in the middle, we have our instrumentation. These are the brilliant team up in Stokesley that make the MyGo products, our fantastic team in Vancouver that manufacture our LightBench and our Ranger Technology and consumables. And then, of course, we have this research-use-only business, which is the legacy Primerdesign business, focusing on human health, agriculture, animal health and veterinary, environmental.
And we've organized Yourgene's old service offering, which is whole exome and whole genome sequencing into that side of the business as well. You know, in a bit more detail, you know, reproductive healthcare, I think what's happening in the market right now, we continue to see governments adopting the technology. Gosh, when I first started presenting about this 6 years ago, it was really emerging technology. I think it is the go-to technology now, national routine screening. And there hasn't been a commoditization of the market. If anything, the market is asking to test for more things, you know, at 12 weeks when mum-to-be comes into clinic. So microdeletions, CNVs, or copy number variations, Rhesus D.
There are a wider range of things that patients are looking to be tested on, which continues to, I think, you know, increase the demand for this kind of product offering and the democratization of that product offering, because nobody likes to wait for these samples, especially when you're, you know, you're 10-12 weeks pregnant and desperate to find out the results of that work. cystic fibrosis, you know, Steve mentioned earlier that APAC is growing like a weed at the moment, you know, sort of 50% up year-on-year. A lot of that's driven by the reimbursement and the way that new babies are tested for cystic fibrosis.
We obviously have a world-class cystic fibrosis product, and as a result of that change to reimbursement, approval of new drugs and gene therapies, we've seen significant growth in that product range in the APAC region. Precision medicine, for those new to the story, we have a product called DPYD, which is used for patients that unfortunately have to have the 5-FU chemotherapy. 5-FU is the most widely used chemotherapy in the world. There's about 2 million prescriptions written for it each year on a global basis. 10%-30% of those patients will suffer severe side effects, hospitalization, et cetera, as a result of taking that drug, and up to 5% of the population dies as well.
So our DPYD assay screens to see if this life-saving treatment they're about to have, if they're genetically able to take that. We've seen it uptake driven by government reimbursement. It's now been introduced into most cancer care clinical pathways. There's even FDA drug label changes in the U.S. as a result of some fatalities in that market because patients didn't have a DPYD assay. So lots of future opportunities there. There is more competition for this product. We were kind of the only company that had launched this product two years ago. As always happens, people are jumping on the bandwagon.
So, I think it's important that as an organization, we continue to refresh that offering, making sure it is up to date as possible, and hopefully with the capital that we can deploy from the Novacyt Group, develop some more products and services to sit around what is currently an orphan product at the moment. When we look at Ranger Technology, opportunity across multiple markets, you know, the key industry challenges remain: How can we process more samples more quickly at higher purity? And the good news for them, and for us, and for you, I guess, is that Ranger Technology does that.
So I think the partnership with PacBio certainly gives us a significant increase to the number of conversations we can have with customers, and our brilliant marketing team have been spending a lot of time doing trade shows, traveling throughout the world, you know, post-COVID, that, you know, the ability to shake hands with someone and look them in the eye and talk to them about your technology is open for us, so we're certainly taking advantage of that. So the market conditions, I think, in summary, look really, really positive for our business. In terms of sort of strategy and growth drivers, let's keep this simple. We wanna do more sales. So the remit for the sales organization is more face-to-face meetings, more time with customer, and we're seeing that coming through.
We've just signed up our first South American NIPT system, so congratulations to our Americas team. We've launched MagBench in APAC and Middle East, and we've got this really strong growth of cystic fibrosis that we've seen, as I've already mentioned, in APAC. The second strategy is just to rebuild this RUO business, to take what is a fantastic business with an unbelievable reputation in its marketplace, and just go back to basics with that. We've got 1,200 products that we've developed that are on shelf. You know, so if there's a monkeypox outbreak in South Africa, which we're currently seeing at the moment, you know, we've got a product that we can just slot perfectly into that supply chain.
In addition to that, we've delivered 500 new projects and custom assays, so if we have something that the customer doesn't, if we don't have something that the customer wants, we can develop it ourselves. There's nine new genetic products, and we've got a new range of complete assays and master mixes to sell. So again, lots of opportunities. And I think those two need to be complemented by R&D. You know, we've got Jo Mason joining the board, which is just excellent, you know, Jo and her team, really high caliber, highly experienced, you know, in terms of getting new products and new technology into the market. Somewhat handcuffed over the last two years at Yourgene because of the inability to raise money and to properly support those initiatives.
But, you know, having received, you know, IVD approval for DPYD in November 2023, you know, just now going through the process with our reproductive healthcare range of products, I think the future is really exciting. And I look forward to watching Jo, 'cause I certainly won't be presenting that, present to you her product pipeline and the plan moving forward in the future. And we have to be realistic of the size of the organization that we are as well, so business development partnerships are critical. You know, to get that announced that we're partnering with PacBio, you know, we've already got other existing partnerships and collaborations that we've already launched before, and so a willingness to partner to help expedite our growth journey.
I guess, bringing that all together into more like one sort of summary slide before I hand back and we open the floor to some questions. You know, we are an international molecular business. We sell products in 65 countries. We've got a deep focus and expertise on reproductive healthcare, precision medicine, and infectious disease. You know, Novacyt was kind of looking what was the next big thing for them, and they started this journey of developing clinical products. That journey stopped when Novacyt acquired Yourgene Health, 'cause you've now got clinical products in your portfolio, and an exciting set of new products to come, as well, you know, to give scale and diversification to this business. Our technology portfolio is broader now.
You know, the capability in qPCR development that the Primerdesign team bring to the table for the Yourgene, sort of commercial lines to really take advantage of and sell is really exciting. You know, we've got multiple platforms from next-gen sequencing to qPCR in multiple markets. Again, giving great diversification for investors that, you know, we're not a one-trick pony relying on a single product on a single market. We've seen the benefit from the early synergies. You know, we're already at GBP 4 million of the GBP 5 million cost plan. But Steve and I are not satisfied that GBP 5 million is the top. There's more to go after here.
And as I mentioned at the start of this presentation, we need to cherish our cash as an organization, and the key to doing that is taking on all of these synergies, having complete transparency, and controlling the costs. And it's a pleasure to work with a CFO like Steve, who has that attention to detail on the numbers. So Steve's gonna concentrate on the numbers. I'm gonna concentrate on the sales. Jo Mason's gonna concentrate on bringing the new products to market. And hopefully, that's a nice, clear, concise summary of what we're gonna be trying to do over the next couple of months. So I think I'm gonna hand the presentation back now, 'cause we've finished our slide deck.
That's great. Lyn, Steve, thank you very much once again for updating investors today. Gentlemen, please do continue to submit your questions using the Q&A tab, situated on the right-hand corner of the screen. But just while the guys take a few moments to review those questions submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your Investor Meet company dashboard. Lyn, Steve, you've received a number of investor questions from investors ahead of today's event, a number throughout your presentation. So firstly, thank you to everybody for your engagement. I think what the guys have done is they've tried to package some of these questions into a number of different themes. First, really around cost synergies.
Where, where have you made the cost synergies, and what's left? That really touches upon a number of the life questions.
Sure. So I think I'll take that point. So I think, Lyn briefly touched upon it in his presentation, and I think I touched upon it, but maybe just to call out a few of the key areas. So the first one, obviously, was we refocused the Primerdesign business on being an RUO business. So we removed a significant amount of clinical associated costs. So that was one big bucket of cost out of the business. Next, we obviously had duplicate listing fees. So when you go, obviously, buy another company that's also listed, it has its own board fees, it has its own advisors' fees, it's corporate and AIM costs. So again, we've removed the duplicate costs there. And then, the other large key cost bucket was from the leadership perspective.
So we had two management teams, and post the acquisition, we've now streamlined the management team. So they are sort of the main core areas where we've been able to generate the, the most savings. And I think in terms of what's left, well, I think, I think no area is untouched. So I think we continue to look at all areas of the business for future cost savings. And like I said, I think during my presentation, we're on a journey of right-sizing the cost base. We haven't finished that, and there is more to go after, and there's more to do for us as a business.
That's great. Thank you very much indeed. I guess the next topic that we received a number of questions around was around capital raising. Will you need to raise money if you lose the DHSC case?
Yeah. I'm listening, guys. I'm unable to comment on that. I mean, we've been waiting for this DHSC case to arrive. You know, the court date is the tenth of June, so we're a couple of weeks away from starting that process. There are a range of possible outcomes. As you've seen throughout the last 6-12 months, every time there's an update, we update you. But I'm not able to specifically comment on that topic, 'cause it could... As I said, there's a range of possible outcomes, and we'll keep you updated as that process takes place.
That's great. Thank you very much indeed. I guess another kind of category, a lot of questions around kind of potential M&A. Are you pursuing additional M&A opportunities?
Ooh, that's, I mean, a great question. I mean, the market has certainly turned into a buyer's market for the first time that I've seen in the last couple of years. But I think the acquisition of Yourgene is probably enough for the business to be focused on at the moment. And I think, as we keep mentioning, you know, cherishing cash and just making sure we've got the right cost base for this business is absolutely critical in the next six months, and I don't want anything to distract us from that. I mean, as I said, Steve's and mine working relationship at CEO to CFO level is a month, you know, we're a month into it.
So we've got a lot of work to do over the next 5-6 months to understand the true potential of this business, the true cost base of this business. And I think looking at M&A opportunities, and a lot of the M&A opportunities that are out there at the moment are out there because they need cash, and that doesn't really support our message of cherishing our cash. For the foreseeable future, I'm focusing on the business, and nothing else.
That's great. Thanks ever so much, Lyn. Next question reads as follows, if I may just read it out as it, as it was received: What are the latest developments with the Taiwanese business? Are you still looking for a buyer, and what are the costs of running this business?
Yes, certainly. So let me take that one then. So I think, I think we should acknowledge that, first of all, it was disappointing that INEX called out the prior transaction, but in terms of that business, it's business as usual at the moment, while we evaluate a number of options that will deal with the best return for our stakeholders, so.
That's great. Thank you. Why are you no longer pursuing UKCA for your multiplex infectious disease tests?
Yeah, I mean, when the two businesses got together, one of the first thing we did was, you know, review the multiple R&D projects and opportunities that are in the business. And as I mentioned earlier, the acquisition of Yourgene fundamentally gave Novacyt a clinical platform. So, you know, I see no need to double up on that effort. You know, we deprioritized certain clinical developments there, because, as I said, we just don't need to do that now, because those products exist in Yourgene. So what we focused on is making every product which comes from Primerdesign to be strong for the research use only market. And I think we're already seeing steady interest from our customers. We're re-engaging with them again.
These are customers that we didn't really access or weren't able to access during COVID because, you know, we were making such high volumes of COVID products. So this is the customer base that we've gone into, we've re-engaged with. We've asked them what it is they want from us, so that's where the master mix discussions come from, and we're really focused on just growing and rebuilding our reputation in that research-use-only market, and leaving the Yourgene side of the business focused on the clinical side.
Thank you very much indeed, Lyn. A number of questions, I guess, around, partnerships. Is your partnership with Eluceda, to develop a novel biosensor technology, still an ongoing project?
Yeah, and great investor memory from whoever posted that question. Very straightforward answer. No, it isn't. Again, nothing to do with the technology or the opportunity in the biosensor market. It was just that we felt we had more of an opportunity in some of the pipelines that were a little bit more developed within the enlarged group. So, you know, you can't do everything, 'cause if you try to do everything, you always end up failing. So we focused on, I say we, Jo Mason has focused on a small number of projects to maximize the opportunity of succeeding those R&D projects. So as a result of that, the Eluceda opportunity was put on the back burner, and we're currently not exploring it.
Thanks, Lyn. Thanks very much indeed. I guess a number of questions again, around profitability, from investors today and ahead of today's call. You know, when do you expect to be profitable?
I should probably take that one then.
Yeah.
So, I think our expectation then is that we can reach break even, and then obviously on to profitability without needing to raise additional capital. So at the moment, we've obviously got a very healthy balance sheet, and we think we can self-fund our way to break even and profitability. We've obviously already delivered savings to the bottom line of over GBP 4 million, and we're not stopping there. We've still got a way to go to deliver further savings. So I think just try and be reassured that, you know, internally, we're working to a plan that, you know, does not require external funding, 'cause at the moment in the market, you know, it's very difficult to do so. Am I gonna give a date at this stage?
No, because there's so many plans we're working internally, but when we are ready, we're gonna come and present a refreshed story of the business and set out, you know, a forward-looking three-year plan in the future.
That's great, Steve, Lyn, thank you very much indeed. I know we've got a lot of questions, given the attendance on today's call, and if we haven't read out your question specifically, we hope we've covered a lot of the themes of those questions. And of course, if there are any other responses, we can make those available post today's meeting. Lyn, Steve, I know that feedback will be particularly important to you both, and I'll shortly redirect those on the call to give you their thoughts and expectations, but before doing so, Lyn, if I may just come back to you for a couple of closing comments.
Yeah. I'd just like to obviously thank everyone for their time and commitment today to listen to this update, and we really do appreciate your, your support, and we're working hard for you to ensure that we, we maximize this fantastic opportunity of bringing these two businesses together.
You know, I made the comment earlier. It just feels like such a strong collaboration, two businesses that almost were destined to become one, and Steve and myself, while we're very early in our tenure as your CEO and CFO, we are determined, as I said, to really focus hard on initially the cost line of the business, so we can cherish that cash and make sure that we've got money that we can hand to Jo Mason and the team to continue to develop world-class leading projects and products that continue to grow our sales, because we've got this international sales footprint that we need to sweat. And the more content we can give them, the more, you know, we get on our return on our investment there. So I'd like to ask for a bit of patience.
You know, Steve and I are only one month into this. We look forward to coming back in due course, with a much clearer plan of strategically what we're doing with our products in the business, with much clearer understanding of the numbers. You know, you just heard Steve say, now, it is not our intention to raise money again. You know, we're gonna get to profitability, and we just need a bit more time. Having made significant progress already integrating these businesses, we need to complete that work. And I can't wait to come out and present that result to you and that story to you in the forthcoming months. So thank you, everybody, for your time today, and we look forward to following up again with you soon.
That's great. Lyn, Steve, thank you once again for updating investors. Can I please ask investors not to close this session, as we'll now automatically redirect you for the opportunity to provide your feedback in all that management can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Novacyt, I'd like to thank you for attending today's presentation, and good morning still to you all.