Good morning, and welcome to the Novacyt full-year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Just simply type in your questions and press Send. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO, Lyn Rees. Good morning to you.
Good morning, Alex, and thank you. Good morning to all of our investors as well. I understand there's potentially up to 150 people joining us online this morning. As ever, we thank you for your time and your commitment this morning. I'm joined today by Steve Gibson, our CFO. Between myself and Steve, we'll be going through the results presentation. This represents pretty much our two year anniversary as a CEO and CFO of this organization. Really looking forward to updating what I think has been some really solid progress over the last 12 months for this business. I'm just gonna start with a quick introduction slide of what we do. I mean, what we do, sorry. Obviously, a lot of people will realize that we're an international molecular diagnostics company with a portfolio of clinical assays.
That's the Yourgene Health side of the diagram. We have a series of research tools and instrumentation that are done on a research use only basis. That's the Primerdesign side of this little diagram. In the middle there, you'll see a brand-new part of our business, a distributor part of our business as a result of the acquisition of Southern Cross Diagnostics. We'll be talking a little bit about that as we go through this deck. Okay. The business is fundamentally still as per the last presentation, you know, located in Manchester. That's our headquarters in Manchester. We obviously added Sydney, Australia to our list of international territories now. We currently sat about 230 people within our organization.
In terms of the first sort of main slide I really wanna talk through, this is a sort of operational and post-period highlights. I'm gonna start on the bottom right-hand corner. You know, a couple of months ago, we launched our strategic plan. We'd had a lot of feedback that the market didn't really understand where we were going coming out of COVID. Obviously, the merger of a clinical business and a research use only business. We launched our strategic plan. Steve and I sat down and shared the investment thesis, which is fundamentally putting some more money into R&D so we can get new product launches and more content for our customer. Keeping an eye on the cost of the business, streamlining the group from an operational and a cost perspective, and delivering market expectations.
They were the three sort of key areas that we said we wanted to commit to as a leadership team. I think then if you look at the remaining boxes on this page, you know, let's start with that strategic investment in R&D. Well, what did we launch last year? We launched a brand-new LightBench Discover. As Steve will talk through in the figures a bit later on, that drove a, you know, 20%+ growth in the instrumentation side of our business. We received IVDR accreditation for our Yourgene QST*R base assay. I mean, probably worth just taking a bit of time to talk about IVDR. I've kind of tried to be raising its profile over the last couple of sessions that we've done with our shareholder base.
IVDR is critical to be able to sell products long-term into this marketplace. It's a very high regulatory barrier. It takes a lot of investment, a lot of time, a lot of expertise. We're very, very well positioned on this IVDR journey. We've been ahead of that curve for some time. We've got a fantastic regs and quality team, and we continue to have our products approved. Whilst, you know, it doesn't make huge news when those approvals are given, when the market changes to you have to have IVDR approval in order to be able to sell products, I genuinely believe that this regulatory advantage that we have will mean that there are less people in the market selling products, 'cause the non-regulated products will simply not be able to be purchased. We're in this really strong position.
I think the fact that we're launching new products or have launched new products, the fact that we are getting continued IVDR accreditation for those products creates a really strong foundation for this business. And in addition to the products that we launched last year, obviously we're very much looking forward to the launch of our new DPYD assay, which is currently scheduled to be launched live into the market at some point in May. You know, ticking the box for the first strategic investment that we've delivered the product portfolio. We've put an extra couple of million into R&D, and that's starting to reap rewards with the product category growth that Steve's gonna talk through a little bit later on. Looking at the core business, our NIPT business, this is the clinical part of our business.
You know, our clinical products in total equate to about 70% of the sales of the group. We were delighted to win the St George's University Hospital tender for the NHS, which basically, you know, does all of the south of the country's NIPT tests. We picked up that contract for another two years. We've won the tender in Iceland for NIPT, and I've just been over there installing new systems and processes and training up teams for the Icelandic market to deliver NIPT solutions to the marketplace. Midway through last year, the Thailand government, the Thai government reimbursed NIPT, it made it available for every mum and dad to be in the Thai region. We've been busy installing our services and processes into 4 key labs in region, working with a new distributor.
We feel we captured about 40% of the market share in that part of the world. As, as reimbursement continues to happen for our NIPT products and services, you can see that we are winning back existing contracts that we had, and we're winning new business, which has delivered another, you know, double-digit year of growth for our NIPT franchise within our organization. New products are being launched, existing products are being sold more, and then the final growth pillar was looking at inorganic growth. You'll have seen obviously that we've acquired Southern Cross Diagnostics, which was immediately earnings accretive. Steve's gonna talk through a rather complicated preferential subscription rights issue that we had to do in order to complete the transaction.
Hopefully the summary here is over the last two years, you know, myself and Steve, alongside our executive leadership team, our board, and the 230 people that work in our organization, have made real strides into giving the business a strong foundation of existing product, approved product to be sold continuously in the market with no gaps, new product coming through, and we've accelerated that plan by doing a bit of M&A work on top as well. We're really pleased, and we're really encouraged of the foundation that we've built for this business in the last couple of years. I know we sent out a video recently on Southern Cross, for those that weren't able to catch that, just a bit of an understanding on who Southern Cross are and why we acquired them.
They're a relatively small organization, just 11 people, with one founder director, but those 11 people generate, you know, north of GBP 6 million worth of revenue, a revenue line that has been growing and tripled since 2023. The business was established in 2028, and gross profit is continually increasing. The founder, Nick, who I've known for, gosh, a long time in this industry, probably over 15 years or more, Nick decided to invest some of the money that we paid him for the business and is now a shareholder in Yourgene, sorry, in Novacyt, has committed to the business long term.
We're looking forward to working with Nick to leverage and sweat his database of opportunities, customers, products and businesses in the region so we can continue to see growth in what is already a fast-growing part of our business. The clinical market in Australia is growing. It's valued at about $1.4 billion at the moment, it's expected to grow and pretty much more or less double in size because the Australian Government is reimbursing a lot of diagnostic tests. Understanding the importance of getting a quick diagnosis always leads to better or more efficacious treatment. The Australian Government is one of the most forward-thinking from that perspective. We see a lot of growth in this market. We were seeing growth via our distributor SCD for sales of our Cystic Fibrosis.
DPYD has just been reimbursed in the Australian diagnostic market. We have a new product launch coming up. It made sense to get a little bit closer to that customer base where we can have conversations with the key opinion leaders and the people are shaping the way that diagnostics is done in that region, as well as being able to capture a larger share of the margin associated with those sales, which naturally accelerates the pathway to EBITDA profitability, you know, for the Novacyt Group. When we looked at this acquisition, it was a fast-growing market. We had great people that we'd known for a long time. The business was winning more and more business through delivery and reputation. It aligned with our plans for geographic expansion and the increase in international sales.
It gave us access to key accounts, not just from a commercial perspective, but also the key opinion leaders that sit within those accounts, and was an inorganic step change in terms of increasing our revenue and profitability. In addition to that, you know, Nick and his team take a wide range of products, you know, from diagnostics, infectious disease, serology into Australia and New Zealand. Nick is visiting and spending a bit of time in the U.K. over the next couple of weeks so that we can meet with some of the owners of these third-party products and hopefully discuss opportunities for wider distribution and give us a, you know, a chance to grow our sales and grow the number of products that we take to market.
When we looked at all of those things, the acquisition made perfect sense, and I'm delighted that we were able to complete it. It was a process that came with a bit of challenges. I'm going to hand over to Steve now, who will explain just how we did the acquisition and what it's meant to our business. Over to you, Steve.
Brilliant. Thanks, Lynn. Good morning, everyone. Hope you're well. If I just talk you through the consideration structure. We acquired Southern Cross for around $8.5 million. That was an upfront cash payment. Then on top of that, there's the ability for them to earn an earn-out of around AUD 16.5 million over a four-year period. That's dependent on hitting certain EBITDA targets. To put it into context, for the full deferred consideration to be paid, they will have to deliver an EBITDA of over AUD 30 million cumulatively over those four years. We think it's a win-win situation. Now, straight after the acquisition of Southern Cross, we launched this preferential subscription rights process. We did that because it was the only option we had following the AGM last year in terms of raising capital.
We launched this process. We issued just under 2 million new shares. I would just like to take this opportunity to thank shareholders who participated in that process 'cause we were oversubscribed. Thank you for that. At the end of it, over 50% of the newly issued shares were given to the prior owner of Southern Cross, and we'll use that cash to strengthen our balance sheet going forward. Now we're gonna turn to look at how we've done in 2025. I have a number of slides to run through. I think we were really pleased as a business that the 2025 results exceeded all market expectations. Revenue totaled GBP 20 million.
However, when you strip out the impact of the Taiwanese divestment, that meant that revenue grew year-on-year by about GBP 800,000 or 4%. In addition to that, we've seen half year-on-year growth since the end of 2024, so a pleasing set of revenue figures. From a gross profit perspective, that ticked up to GBP 12.6 million when you strip out the impact that the DHSC settlement had on the 2024 numbers. From a gross margin perspective, it remains strong, and we delivered a 63% gross margin, and that was helped by sales of our PCR range of products. In particular, our Primerdesign business continued to deliver a gross margin of over 80%.
Costs continue to track downwards, and we've reduced our OpEx from a pro forma of GBP 27.5 Million when we combined Yourgene and Novacyt down to around GBP 20.4 million this year. That's against the backdrop of continued investment in R&D, and I'll talk about that more in detail later. All of that accumulated an EBITDA loss, reducing by around 14% down to a GBP 7.8 million loss. If we move on to look at revenue from a segment perspective, then the product mix year-on-year remains fairly consistent. Our clinical business delivered around 70% of our total revenue or just under GBP 14 million .
As Lyn mentioned earlier, NIPT technologies is up around 10%, and that delivered around GBP 5 million of new revenue, and that was predominantly driven by winning a new customer in Asia Pac. The RUO business, that delivered around a fifth of our total revenue at GBP 4 million, and that remains our cash cow of the business. Instrumentation grew by around 25% to GBP 2.5 Million , and that was driven by the successful launch of our new product, the LightBench Discover instrument. If we have a look at revenue also from a geographic perspective, you know, we remain well-balanced and have a diversified income stream, and we're not reliant on any one region, which is really important in the current geopolitical situation that we're in.
Our largest region continues to be Europe, and that delivered around 50% of our total revenue or just over GBP 10 million. If we look at it in a little bit more detail, the U.K. and Ireland region, which is where we've got the most boots on the ground, delivered around GBP 4.2 million of revenue. Asia Pac is growing like a weed. It's growing at double digits and delivered around 30% of our total revenue or just under GBP 6 million. Again, we continue to see strong demand for our reproductive health range of products in that region. What we are seeing in some of the countries out there, that they are price sensitive, so it will put pressure on our gross margin percentage going forward.
If we look at the income statement and we move down to operating costs, what you'll see is that they decrease. OpEx has down to GBP 20.4 million from GBP 41 million in the prior year. Last year's costs were inflated by around GBP 20 million because of the bad debt provision that we booked. If we strip that out and we're comparing apples with apples, it means that our underlying OpEx costs have decreased by about GBP 700,000 or 4%. That's against the backdrop of increase in our R&D expenditure on a net basis by around GBP 1.3 million, and that took our overall R&D P&L cost to just over GBP 4 million.
We were able to offset that expenditure due to the successful site consolidation program of work that we've done that's reduced our footprint and has also reduced the cost base of our business. From an EBITDA perspective, as I mentioned earlier, we made a loss of GBP 7.8 million. On top of that, we incurred exceptional costs that totaled just under GBP 16 million. The majority of this was not cash impacting. Around GBP 14.5 Million of it related to impairment charge, covering the goodwill and the tangible assets associated with Yourgene Health acquisition. The actual cash impacted items and the exceptional charges totaled just under GBP 1.5 million , and that included site closure costs and M&A related fees.
This meant overall, the group reported a loss after tax attributable to the owners of GBP 22.9 million, which is significantly down on the prior year's loss of GBP 42 million. We've made good progress. If we move on to the balance sheet, there's a couple of areas that have decreased and have moved year-on-year. The first one is non-current assets you'll see at the top, has decreased by around GBP 19 million. Now, the bulk of that is what I mentioned earlier. GBP 14.4 million of it relates to the impairment charge, and then the remainder is the usual amortization and depreciation charges that we see. The other big mover is cash.
You'll see that cash has decreased by around GBP 11 million. We'll go on to look at that on the next slide in a little bit more detail. Look, we closed 2025 with GBP 19 million in the bank, a GBP 11 million outflow. Now, the main cash outflows were driven by core operations, consuming around GBP 8 million of cash during the period. Now, on top of that cash outflow, there were some one-time items. Clearly, there were costs around the site consolidation program of work. They totaled around GBP 1.3 million. Then we had some M&A related costs that cost GBP 200,000. Look, if we strip out those one-time entries, it meant our cash burn per month in 2025 was around GBP 825,000.
I just wanna touch on the closing cash position at the end of March 2026. We announced in the RNA today that we have GBP 11 million in the bank at the end of last month. That means it was a Q1 cash outflow of around GBP 8 million. GBP 5 million of that related to the acquisition of Southern Cross and covered the initial consideration, plus the working capital adjustment, plus fees. Fees associated with the preferential subscription rights offset with cash that came in from the successful PSR process. On top of that, there was around GBP 500,000 of non-repeating items as well. That was a quick run through of the financials, and I'll hand back to Lyn now.
Thank you, Steve. Just looking to summarize this and pull some of this together. You know, where are we today? I think we're making strong strategic progress. We just talked through the acquisition of Southern Cross, which gives us immediate earnings and revenue, strengthens market reach and access to third-party products. It's only been a couple of weeks now since we acquired this business. I think it was done on March the 2nd. I've just spent the last two weeks in Australia with the team, making sure that they feel comfortable, they feel confident as part of the new group. They hit their first target. You know, their first month of sales was the March month of sales, I was delighted to see them hit that over the line.
They've got an exciting pipeline of potential new products to take into region. We've got a team that feels very comfortable being part of a wider group, a team that we've known for some time. You know, I think that acquisition accelerates our pathway to profitability, has allowed us to use our balance sheet to support our growth. It was great to see some of the shareholders supporting that process through the PSR. I really thank everyone for contributing to that. You know, I think we delivered a, what would be a very successful acquisition for this business, and that's gonna bring growth to our organization. From an organic perspective, you know, our key products have hit those key milestones.
I took a bit of time out to talk about the importance of IVDR and the importance of reimbursement. I was asked a question, a couple of weeks ago, you know, are they clinician-backed products? Well, they kind of are because, you know, the governments in the various territories where we sell these products have decided to reimburse this testing, so they must see a clear value in it. We often work with key opinion leaders.
You know, to launch these products, to see the growth that we continued growth in NIPT of double-digit, to see the 20% growth that we saw in the range of technology shows to me that we made the right decision to invest a bit more in R&D, as we look to you know, drive the content within our organization. That portfolio expansion will continue. You know, we are on a precipice of launching our DPYD assay.
This is an assay that, unfortunately, patients who are Stage 3 or 4 in cancer, and are having a cyclophosphamide or a 5-FU chemotherapy treatment, this is a test that every one of those patients will have before that treatment, because if they don't, you can lose, you know, up to one patient in every 100 that are tested for this. Our original DPYD product we launched four or five years ago had been overtaken a little bit by the market. You know, more targets were added into the competitors, we lost a bit of market share. We're just about to launch a brand-new product that has a full suite of targets in there. It's being developed alongside some pretty hefty key opinion leaders in the market globally. We're looking forward to driving that out.
Whilst that's really good news, you know, I think we're launching the AUR version in May, and the regulated IVDR approved version will probably be out June, July. We have hit a snag with the SMA product that we were also working on. That was an OEM product that we were bringing in from a third party, and as that went through the regulatory journey, there were a couple of questions that we were unable to answer. We've gone back to investigative mode on that and deciding whether we continue to look for a third-party product or we just develop it ourselves. One will be quicker, one will be more profitable. We're just having that discussion at the moment, but we continue to invest in our portfolio.
I expect us to have more range of technology available either at the end of this year or very early 2027. As I said, we've got the DPYD product coming out in the next couple of weeks. We will continue to look for opportunities to partner with our customers, with our partners and bring out more content into this space. In terms of the business itself and its cash position, you know, I still think we have a well-funded and a strong balance sheet. We are now delivering sustained growth. I think we've had four consecutive half-year periods of growth over the last two years. For the first time, you know, we put market expectations out there. We overachieved them, albeit slightly, still a tick in a box to overachieve those expectations.
I think that gives us a real solid foundation of growth for this business. You know, Steve and I have pretty much spent the last two years working hard with our leadership team, with our board and in general, all the people in our organization to create a real solid base, to create an identity for the business, to create a strategy for the business. During that period, we were quiet, and in the last couple of months, we're opening up our communication, and you will be seeing more of us over the coming months. We're gonna attend some retail investor shows, and we, you know, are committed to give you more updates, especially as we launch our new technology and we bed in this new acquisition.
I think that reduced cost base for the group, you know, in Steve's presentation, all the arrows were going in the right way. That will be a continued focus for us. That's probably one of the challenges is deciding when to stop investing in the new products and to claw back the cost. I think we're probably at a point where we can look to do that as an organization, continue to manage cash, as if it's our own because we understand the importance of it in the market, and just create a strong foundation for the business. It's a delight and an honor to be here in front of you today to say, "Look, we hit our numbers. We met expectations. We launched product when we said we'd launch product.
We won the new business that we said we would. The growth's at 4%, and we're targeting double-digit growth for 2026 and beyond. You know, after the 1st quarter's performance, we certainly hit that number after Q1. We really appreciate your time, we really appreciate your patience as investors and shareholders in our business. For those non-shareholders that are on this call today, hopefully you've seen enough to convince you that we're worth your time and energy and investment. For those existing shareholders, as I say, thank you very much for your continued support. We're doing all we can to make this business successful long term, and we believe the work that we've done over the last two years really builds that foundation.
We've got products that we can sell all over the world 'cause they are very highly regulated. We've got new products coming out which will continue to excite and delight our customers. We're investing and growing our commercial footprint organically and inorganically. We look forward to updating you on the progress throughout this year as we go through the journey. Thank you everyone for your time today. Thank you.
That's great, Lyn, Steve.
Yes
for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the top right corner of your screen. While the company takes a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published can be accessed by our investor dashboard. Lyn, Steve, if I may now hand back to you to take us through the Q&A session, and I'll pick up from you both at the end. Thank you.
Thank you very much, Alex. Okay, we received a number of pre-submitted questions. If you could bear with me as I read these through and between myself and Steve, we answer them. I'm not gonna try and read out the French version. For any French shareholders on the call, I do apologize. I think we're having some translation added when this video goes out into the market. Steve, can you comment on the auditor's opinion and indicate whether there are any emphasis of matter or material uncertainties going concerns in the audit report?
Yeah, certainly. There were no material uncertainties that were flagged, and we wouldn't expect that in terms of the going concern because we have adequate funds for the next 12 months, which it looks forward to the end of April 2027. And then in terms of the emphasis of matter, in the group accounts, there is no emphasis of matter. In the French social accounts, so the local Novacyt SA accounts under French GAAP, they have flagged an emphasis of matter. That's just to bring to the reader's attention that we've adopted the new French chart of accounts. It's more of a disclosure saying we've changed the look and feel of the accounts, but nothing to worry about.
Thank you, Steve. Staying on a financial note, what is the cash position and the cash runway after the capital increase? How have the raised funds been used, and what portion remains available for operations and growth? Looking to understand the impact of the capital increase on liquidity and the capacity to execute strategic plans is crucial for assessing the shareholders' financial risk.
Okay. Yeah, thank you for that. I think I covered some of that in the presentation deck, but at the end of March, we have GBP 11 million in the bank. I think Lyn alluded to it or mentioned it earlier that again, as a business, we think we have enough cash to reach EBITDA profitability, as long as we hit our forward forecast. In terms of the PSR process, why do we do it? We did it to allow existing shareholders to participate in a capital raise post the acquisition of Southern Cross and also to bring in new shareholders. Cash is being well managed, as Lyn said. We're treating it as our own.
In terms of liquidity, we have a high retail shareholder base, so it's as you would expect for that sort of share offering. I think that's probably it.
Thank you, Steve. The next question was asking around the, can you give any detail on the operational and commercial integration of Southern Cross Diagnostics, synergies realized to date, contribution to revenue and the expected timeline to achieve integration objectives? Yeah. Well, as I said earlier, I've literally just got back off a plane from Oz. I can tell you, I mean, this is a business that doesn't make any product. From an operational perspective, it was a pretty easy integration process, you know. They'd already been supplying our products into the market for the last four or five years. There, there's a strong relationship there. We have a 90-day integration plan that's managed through our project management office or PMO. As it stands at the moment, we are 75% through all of the tasks.
We've completed 75% of the integration tasks within about 60% of the duration of the project. We're well on plan for the integration. It certainly help when you know the principals and you've worked with the organizations for so long. Naturally, we're leveraging that strong relationship that existed. I think commercially, whilst I was over there, we launched the LightBench into the Australian market. You know, Southern Cross hadn't previously taken that product to market. We attended a big genomics conference, and we walked away with over 50 leads for LightBench 'cause it's the first time we've showcased that there. We've got some conversations going around in NIPT, and we're really focused for the launch of DPYD into the Australian market. I think commercially, the integration is going really, really well.
How do we assess that? Well, they've got a budget, they hit their first monthly budget, and they're on track for what we can see for the budgeted year. So far, so good with those guys. The initial project will take 90 days, so I think it comes to an end at the end of May. As I said, I'm very comfortable and confident on where we are with that integration right now. In terms of potential synergy, we do have a lovely base now in Sydney, there's opportunity to look at running more of our processes, holding maybe more stock there. We will update the market with any further synergy plays. This was more about buying a business that would accelerate growth.
We've been in cost-cutting mode and consolidation mode for the last two years. We're really looking forward to jumping into growth mode, and this acquisition was more about growth. Obviously, if there are any synergies to be taken, we will be taking them out there. Okay. What are the main drivers of revenue and margin fluctuations in the 2025 fiscal year, and which ones are recurring versus one-off? What guidance do you provide for 2026? Thank you, [Marke], you've also put in a similar question about guidance for 2026 EBITDA and revenue. Steve, do you wanna
Yeah, I can take that. That's absolutely fine. I think, in terms of you look at the margin year-on-year, we're very consistent at 63%. Maybe I'll break that down into a little bit more detail. Our clinical business that does around 70% of revenue, that runs at a blended gross margin of around 60%, and that covers our NIPT and our PCR chemistry businesses. We have the RUO business, and that's about 20% of our revenue, and that runs at around an 80% plus gross margin, and that's all our PCR technology. We have the instrumentation business, and that's about 10% of our revenue, and that runs at about 50% gross margin. That's how we get the blended group overall margin of about 63%.
As I said, it's consistent year-on-year, but there is some differences depending on the product that we're selling. I think one of the questions was there any material one-offs in 2025? Nothing material. There wasn't a big GBP 2 million or GBP 3 million one-time revenue item in the 2025 numbers. Addressing the guidance query. Look, as a business, we don't specifically give forward-looking guidance. What we do have is via one of our brokers, so Singer Capital Markets, they launched an initiation note back in October last year. They just issued an updated note this morning on our results, that gives some updated forward-looking guidance from their perspective for the next couple of years.
Please, I would ask people to go and have a look at that if they wanna have a look at what our forward numbers might look like.
Yeah. Just to clarify that for anyone who doesn't have access, and we know that's one of the challenges in this market space at the moment. I'm looking at the Singers note now, and the expected revenue for 2026 is GBP 26.4 million. Hopefully that's giving you some clarity there. Steve, another one for you. What are your capital deployment priorities for the next 24 months? R&D, acquisitions, debt repayment, dilution, dividends, or share buybacks? What criteria will trigger new market transactions?
Okay, lots in that question then. Look, I think the key is that we're gonna continue to invest in opportunities that will drive growth, right? I think that's our fundamental ambition. There's no plans to pay any dividends until we're profitable. We need, at the moment, all of our cash to get us to EBITDA profitable. Once we're profitable, we can look at distributable profits and potentially paying dividends. In terms of the question on debt, we have no debt, there are no repayments of debt at the moment. I think our general principle is, you know, we're always looking at opportunities to accelerate, you know, the break-even position of the business, whether it's organically through increased R&D expenditure like we've seen for the last 12, 18 months, or inorganically through the recent acquisition of Southern Cross.
This is where we're gonna prioritize deploying our cash. Pulling forward the break-even position of the business and driving growth in the top line.
Thank you, Steve. We've had a further question from one of our French shareholders. Novacyt is positioned as a player in global health in tests which have obtained the IVDR label, theoretically give it an advantage in technical, regulatory, and legal aspects compared to its competitors. Has the idea occurred to you that due to the global situation, the company could also become a major player for the U.K., Europe, and Australia in terms of food security or defense contracts to protect populations across the environment and agri-food production? Thank you for the question. I guess in first part, yeah, I completely agree. Our IVDR position and the fact that our products are already approved is an advantage over the competitors.
It's an advantage we're not seeing commercially yet at the moment, because you can still buy what are called RUO products, research use only products, that don't need the IVDR badge of approval. That's changing and it's changing quickly. We'd expect within the next 24 months to see a reduction in the number of competitors and opportunity for us to take advantage of the strong regulatory position that we have. In relation to food security and, you know, military or defense contracts, you'll need two different levels of regulatory approval for that. To do any defense contract work, you need something called List X security status. We don't have that. It's a very expensive accreditation to gain. I've gained it before in a previous organization, and we have no plans to go into that side of the market.
Similarly for food, whilst we do provide a lot of products into the vet, the food, the sort of animal testing area, you need AOAC approval specifically for food, and that's something that we don't have. We continue to sell our products in research-only capacity, and that gives us enough of a market to go out with our Primerdesign range of products and services. We have no plans to increase the scope of that to get into military or some of the bigger food opportunities because the timeline and the costs would, you know, we just couldn't afford that, and we don't have the time to do it. Next question. Steve, what do you expect in the payout to be on the current LTIP?
Okay. For people that don't know what LTIP is, the long-term incentive plan. It's just to remind people of the scheme. It looks at the average share price in January of 2024 and compares it with the average share price in December 2026. At the moment, I've no idea what the share price will be in December 2026. We can't quantify what our liability is. The other point just to remind people is that it is not a cash settled LTIP, it is an equity settled LTIP from a business perspective as well.
Thank you, Steve. Next question. "Are you able to provide some detail on what product launches Novacyt expect to deliver in 2026, and with which divisions?" That's nice and easy for me to answer. Our first product launch is weeks away. It's the launch of a new DPYD assay. This is the pharmacogenomic assay that's used to treat patients that are about to start a chemotherapy journey, the 5-FU capecitabine. This product is a very inclusive product, so it has loads of additional markers.
As we saw the product originally roll out, you know, it started off, I think in Wales was its first ever introduction. Before we knew it, we're selling it globally and we needed to add in more markers to manage the global population that we were all of a sudden testing as opposed to more of the U.K. population. That work's been done. We're looking forward to launching the RUO version of that product in May. We should get regulatory approval, I think early July. We're gonna be launching that product hard at the European Society of Human Genetics show. We've been doing lots of soft launches and talking to customers about that over the last couple of months.
In addition to that, I think we have the usual couple of new products in from the Primerdesign team. We're looking at a new version of the LightBench that can measure RNA as well as DNA. That looks scheduled to come out towards the end of the year. I think this year we're really focused on bringing some partnerships. We've got a lot of development capability within the Novacyt Group. A lot of skill sets both in Next-Generation Sequencing and PCR. As the race to provide content for the market becomes more acute, I think there's opportunity to do contract development work there and partner up with some of the, the players in the global market to create content and work together.
You know, there's two products that we hope to launch this year. There's some other announcements that, as soon as we're in a position to share with you, we will be doing so. The next question is on SCD. I think we've covered the integration and where the tangible operational financial benefits are. I've got another question here. "How has the conflict in Middle East affected the group?" I think Middle East accounts for, and Africa, about 6% or 7% of our sales. We haven't seen too much disturbance there. I think there's still a lot of testing going on in these regions. And thankfully so because these are important products, regardless of the geopolitical situation. In terms of what effect has it had on us as a business, it's slowed down some of our supply chains.
We've had to reroute, you know, certain supply lines to avoid flying over certain areas or being shipped through certain areas. We've seen a slight delay to our lead times. Other than that, I would say the conflict hasn't really affected the business so much, but we continue to keep a careful eye on that and watch what's happening in the global markets. So far the impact has been minimal for the organization. Just looking at the questions that have come in. RC, you're asking me a couple of questions here. You're asking me about when can we be cash positive? Share price has been hitting lows. What are the management doing to boost that? Because market seems not to be happy with Novacyt management.
Are there any big deals that Novacyt is expected to win in coming months? I can't talk about deals that we'd expect to win. I can only talk about deals that we have won. We will update you as we have done this trip with the news of the St George's contract, the updates in, for the tender in Iceland and for the new opportunities that we won in the Thai marketplace. We are of course on a pipeline. We have projects and opportunities around us all the time. We will update you when we win those. We can't update you beforehand. With regards to the share price, what is the management doing?
We kind of listened to all the feedback and we listened hard to that feedback and it was around more presence, you know, being more visible. Unfortunately a lot of the information that talks about us, you know, the analyst reports and what have you, the retail investment community doesn't always get access to that. I think this year we're gonna be doing more kinda catch up videos with Steve and myself. We're gonna be attending some investor shows. I think we're attending the Mello show coming up in the next couple of months. I'm trying to get more visibility in front of retail investors whilst we wait for the institutional investors to wake up. You know, I think we've done everything that we said. We've beaten all the market expectations for our business this year.
We launched new products. We've got a sustainable business, we've got growth, and we've got cash in the bank. Other than waiting for the market to respond, the market did seem to be getting a bit better, before the war in the Middle East started. I think we're gonna have to work our way through that. I can assure you, RC, we're doing everything we can to increase the valuation of this company. We think this company is a very different organization from the one that we took on two years. Much more clarity, much more control over cost, much more control over where the business is growing and investing in the right areas for that growth. We've trimmed the business down, made it more lean, and we filled in some management gaps.
You know, to see the business, I think in a much stronger position two years after Steve and myself, you know, took up our roles. To see the capitulation in the share price during that period is very frustrating for us as well as you. We absolutely share that pain. We bought some shares in the open market this year. We, you know, I will continue to invest in the business as it continues to invest in itself. Other than waiting for, you know, the macro market conditions to improve and just keep delivering on our promises, I think that's all we can kind of do right now. Steve, a couple of questions on cash burn that are coming through. One in French I can't understand. Have we got any comments? I think we covered that, haven't we really pretty much?
Yeah. In terms of the cash burn money, I think we covered that in terms of the Q1 outflow around GBP 8 million, and just breaking it down in terms of the Southern Cross acquisition was GBP 5 million all in because there was this additional working capital adjustment, and then there's all the fees associated with that and the PSR process, so they need to be factored into the cash consumption. I think the essence is, you know, do we expect the cash burn to reduce this year? Absolutely. Obviously with acquiring Southern Cross, that will help our EBITDA as they're EBITDA profitable, so that will reduce our cash burn. We'll have the unwinding of the working capital from a Southern Cross perspective.
As we grow the business, we expect our EBITDA to improve, and therefore that will generate more cash or reduce our cash outflow. They're the key drivers why we think our cash outflow will reduce going forward.
Thank you, Steve. Unfortunately, that's all we've got time for today, so I really appreciate for everyone that submitted questions in advance. Thank you for those guys that have submitted them during this call. We really appreciate, you know, the opportunity to respond to your specific questions, and I apologize if we can't answer everyone's, but we've got a limited set of time for this. I just wanted to say thank you to everyone. I wanna leave you with the thought that, you know, I'm more excited about this business than I've ever been. The last two years have been hard doing consolidation, shutting sites, making those decisions, understanding where the best place to invest in terms of new technology is. I think the decisions that we've taken alongside our board have been the right decisions.
I think we're investing in the right areas as a business. I think we've consolidated the business to the best commercial and operational footprint that we can. It was a real delight to be able to use some of our cash to accelerate that plan through the acquisition of Southern Cross Diagnostics. I think that will be a very good acquisition, as Elucigene has proved to be, as Coastal Genomics has proved to be, and hopefully as Yourgene has proved to be for the Novacyt Group. I think, you know, if we can bed that in and make that a real successful acquisition, there's more potential to come in there. There's very much a buyer's market. But even the organic plan of this organization, you know, it's starting to really work.
Our products are getting more traction. The things we're invested in are growing at double-digit growth. This is the year as a business, having done the consolidation, that we're really focusing and targeting double-digit revenue growth, and reaching that profitability as soon as we can. We really appreciate your continued support. We look forward to updating you in coming months at the various investor shows that I've said we'll be attending and little update videos that we will provide for you. Thank you for your continued support, everyone, and enjoy the rest of your day. Thank you. Bye-bye.
Fantastic. Lyn, Steve, thank you very much indeed for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we'd like to thank you for attending today's presentation, and good morning to you all.