I would now like to hand the conference over to Hartley Atkinson, CEO. Please go ahead.
Thank you very much, and welcome everyone to our presentation of the FY 2025 financial results. I'll just turn you through the different pages and let you know which page you're on. Obviously, the first page we've just talked about. The second page has the standard disclaimer notice, so please just be aware of that. Moving on to page three, the agenda. We'll just go through key highlights, strategic initiatives, and pipeline financial results, which Malcolm Tubby, our CFO, will cover. Then the FY 2026 and long-term outlook, and then, of course, questions and answers. That's that page. Moving on to the next page, building the foundation for the next phase of growth. This is just a quick sort of overview summary, really, of where we're at.
On the box on the top left, we exceeded NZD 200 million worth of sales, sales of NZD 208 million. Strong performance from our local operations in Australia and New Zealand, which got up to almost NZD 181 million. We are still very much focused on our growth target of hitting NZD 300 million by the end of FY 2027. Looking at the other top hand box on the right, a key chunk of work this year has been, and a lot of work's gone into this, expanding our global footprint, so Europe, the U.K., and the EU. Being in Europe, sorry, in the U.K., a good kind of couple of years is fully operational. We are just starting to get to that point now where we will get to break even this financial year, which is important.
North America, the U.S., and Canada, a lot of setup work's gone, and we've just started launches, really, and got a number of further launches coming on North America. Asia, China, Singapore, Malaysia, Hong Kong, and also South Africa as well. On the bottom boxes, it's pretty important as the R&D pipeline. At the moment, and we think often people don't really recognize this, we have a pipeline of eight patented products. That's actually quite an extensive pipeline. We also have a further bundle of off-patent injectables. We only really started that project about this time last year, and we're going to file our first dossier next month. It's actually pretty good progress.
Looking over to the other product launches, driving commercial traction, we have also got a number of programs that have come out or just coming out of the R&D program. This is important as well because it starts to generate money now. Obviously, we need to generate money as well to assist with funding our R&D spend. This is really the crux of this part. On the bottom box, it is just really the partnerships that we have been building and will continue to build on. We now have sales in nearly 80 countries, or actually it is about 80, and agreements still in 100 countries, so over 100 countries around the globe. Flicking on to the next page, page number five. Strategic efforts continue to drive the underlying momentum.
You can see on the bottom left graph ongoing progress with sales now growing to over NZD 200 million. Looking on the right-hand box at the bottom, the operating profit, you can see from when we floated, we made those losses that we talked about back at the IPO days. As we said, we would move into profit. You can see, though, I guess if you look at the last kind of four years, profit has been some ups and downs due to chunky licensing income, but profit's been relatively flat. Part of this, though, has been a lot of investment going into the new offices around the world and also starting to increase the R&D pipeline and portfolio as well. Last year, I know we did talk about extra investment into the Australian market, which did cause some concerns.
If we look at the end result, we saw this year, we believe that investment was vindicated, where we grew profit by 65% in Australia, and we grew top-line sales by 17%. These sort of investments obviously have a short-term impact, but we believe in the medium term, they are the right thing to do. It's page number five. Flicking on to the next page, number six. Yeah, look, we're sort of talking about getting near inflection points, and it's quite important with our different affiliates where we're starting to make sales, and that'll temper some of the losses that we've been carrying, which are basically buried in the G&A. You can see as well in terms of advancing on the whole financial side, that bottom graph, equity and net debt, you can see that kind of net debt peaked about FY 2019, FY 2020.
Despite the investment, it's been slowly decreasing over that time for about NZD 30 million. At the moment, we're down to NZD 14.5 million, which we're pretty pleased with, really. We spent a lot of investment this year, and we're still able to improve that net debt from NZD 16.2 million last year to NZD 14.5 million this year. That's well down from the figure a couple of years ago, which was about, I think, NZD 29.9 million. Also, we increased our dividend payments. Last year, we paid NZD 0.016, gone up to NZD 0.018. Maybe we could have paid more, but we still do conscious that we still have got the ongoing investment. It's just trying to balance the two things together. I think it's important that we've got an increased dividend payment for shareholders, and we'd look to plan to keep on increasing that over time.
That's page number six. Flicking on to page number seven, this is quite a good sort of snapshot of the global map and kind of where we are at. You can see the red circles on it. Australia, New Zealand, offices have always been there for almost every day. Singapore, Malaysia, we run that out of Singapore, so we have an office there. Hong Kong, we have an office up in Hong Kong where Lorraine Poppleton, who's our Asia manager, is based, which is certainly very handy because when someone has to pop across to China, she literally can do it at a drop of a hat. We have also recently purchased a license from Sanofi for South Africa. That's pretty important because that saves us a good couple of years.
Setup is well and truly underway, and we would be launching products in South Africa during this financial year. Going across to North America, we have our office in the U.S. in Detroit. Basically, the main function of that is more coordinating our licensees. We're sort of seeing that people do want to work closely with us. We're working actually closer and closer with partners in our larger markets like the United States and China. It seems to be an important thing. Certainly, that office helps that. We do have some OTC products as well that we are also selling and building up in the U.S. North of the border in Toronto, in Canada, we have our office there. We are doing our first big launch, which is happening in July, launching Combogesic IV into the Canadian market.
We have Europe, which is run out of Ireland. Also, the U.K. in London, which has been there for a few years and basically making some good progress there now. We're looking at that growing sort of going forward. You can see countries where we've launched are yellow. There is more and more yellow now with China featuring on the yellow list and more yellow starting in Africa as well and also in the Middle East. The obvious bits are like Latin America, Brazil. We have signed an agreement and still working upon registration. We have a few white areas where we appear not to have anything. Venezuela is not really a target, and India and Bangladesh are certainly not really targets. Japan is definitely a target.
We are having a number of discussions in Japan, and we would hope to be able to announce something in the next few sort of six months for the Japanese market. Being the third largest pharma market in the world, that is still also an important end market. That is a look at a global overview on page seven. Flicking to page number eight, our largest current market, Australia. Yeah, look, we thought it was a pretty solid result. We grew at 17%, had NZD 127 million, had good sort of strong sales in eye care, pain sort of supplements, and basically our broad portfolio all performed pretty well. Certainly, though, we see there are ongoing growth prospects in the Australian market. I mean, growth data is still, and we have been asked about this before, is still primarily actually from existing products.
I'd often say products that are three years and older. However, the important thing is, as the new launches happen, those products grow, but it's probably only after about three years they get big enough that they start to actually make a difference to the top line. It takes a bit of time, but it's all very much growth across the board. It's not just because we're launching new products. There's certainly good solid performance from our existing portfolio. Very pleased, profit increased, as I mentioned before, 65%, which we believe was in part attributable to investment decisions we made last year. That's Australia. Flicking on to page number nine, New Zealand, our home market. Yeah, I mean, we read various things about the economy, as I presume you all do, but we were pleased.
We had double-digit growth in New Zealand, 10% growth, which we thought was pretty solid. Also, operating profit improved by about 20% in the New Zealand market. We surpassed NZD 50 million. Look, we see we have got an active program to improve and keep growing the New Zealand business as well. We are obviously just going to keep bashing away at that. We see that as not driving the whole company, but sort of being a pretty solid contributor to our overall bottom line and our overall result. That is the New Zealand market, page number nine. Page number ten, Asia emerging inroads into China. We did not want to be too presumptuous and say inroads. I think really it is only the very start.
The revenues rebounded nicely in the second half as the Korean doctors went back to work, which was welcomed by our partner, the sales of Maxigesic IV in Korea. We certainly got a solid rebound. We launched Crystaderm into mainland China kind of right at the end of the financial year. It is only kind of one order going in there. It had some contribution. Actually getting pretty good results in things like cross-border e-commerce sales, even though we see that as ultimately a declining channel, still getting some pretty solid results, which we are pleased with. There was quite a lot of investment, and that certainly has depressed presently that bottom line operating profit declined, as we said, from NZD 2.5 million to NZD 1.8 million.
We were not really too concerned about that because we do see there's quite a lot of investment needed, and we're sort of basically doing that at this stage. That is that slide number 10. Moving on to page number 11, international expansion investing for long-term growth in new markets. The key thing, I think, as you're aware, most of you, was the first half of this financial year. This last financial year, we had some major destocking from some key customers who did not order at all, and that put a dent. We have seen that recovering well in the second half, where sales were 86% greater in the second half than the first half, which is roughly what we would have expected. It was not such a good year for licensing income. We got NZD 0.7 million, which was less than the year before.
The year before, we sort of had a big chunky amount associated with the launch of Maxigesic IV into the United States. There always will be an element of lumpiness in the licensing income, but it's still pretty important. We are pursuing licensing income. It's not the main driver, but it certainly helps to offset R&D expenditure. This year, there was an operating loss in the international side. We do see that there is potential, though, going forward to get ongoing incoming licensing income. At the moment, we're negotiating at least 20 deals. Some of them may be not that big, but they all add up. Certainly, with our existing R&D as well, there's quite a lot of ongoing discussions as well. That's page number 11. Page number 12, expanding AFT's global footprint and scale. There really is a lot of work that goes into this.
It's one slide, easy to gloss over it, but just even simple things like getting all the different licenses and paperwork sorted. Pharmaceuticals is very bureaucratic. In the U.S., for example, you have to get the local state license and have inspections, and there's all sorts of bits of paperwork. The same in Canada, same in Europe. A lot of things have been set up and a lot of work done prior to kind of sales rolling in the door in a meaningful manner. As I've said, with the U.S., we've got ATC launches and coordinating our licensees' distributors. The U.K., we've launched Combogesic Tablets and IV. That's our name for Maxigesic in a number of markets. We're also launching multiple products. We do have a significant pipeline in the U.K.
It all takes time to come through the regulatory process, but certainly, we have got a good pipeline, and we've got a number of launches. Also, we've got some good results with the NHS, where we've got a reasonable amount of contracted business with the NHS over there. We say U.K. is a big market, 67 million people, so there's good potential there. AFT Pharmaceuticals Europe, as we mentioned, we purchased their product licenses from the bankrupt German company, and the launches are now underway. We actually got our first profit shares coming in literally last month. The money we spent on that German company, we would retrieve it by the end of this financial year. Probably within two years, we would have recouped our investment.
Certainly, we are being pretty, I think, careful about how we're spending our money, and then we are getting a return on it. Canada, as I mentioned, we're launching Combogesic IV and some OTC products. Once again, we've got a pipeline in Canada. South Africa, we actually got a significant pipeline anyway as part of the deal there that we made. Also, we've got that license, which isn't that easy to get. It takes two years, but we purchased that. That means we can start selling products during this financial year. In our existing sort of markets we've had for quite a while, Singapore and Hong Kong, we are really beefing up that pipeline and getting growing business in both of those markets, which is still a reasonable number of people. Singapore has more people than New Zealand, and so does Hong Kong.
That's page number 12. Flicking on to page number 13, progressing research and development investments. As I've mentioned, several programs have exited development and are moving towards generating revenue. This is, as I mentioned before, the significant number of licensing agreements we have underway. We still have a few little gaps with even Maxigesic. We've still done some agreements recently for the intravenous and some of the other dose forms. Crystaderm , we're just finalizing that. We launched in Canada. We launched in China, but we have got other interests further afield, and we're just finalizing the regulatory dossier for that to file in European countries. Mycolite, we bought this product a while ago, and we're just finalizing manufacturing and the dossier. Kiwisoothe is a gut product and that as well, just doing our first launches for that.
Capsaicin Cream, similarly, we're just finishing off the dossier for that. These will all generate various deals, and Stuart will generate some licensing money, which will then help to offset other expenditure. You can see on the graph on the right, we have R&D spend, which has been, as we signaled, kind of slowly trending upwards. We're about NZD 15 million this last year. We do have those eight R&D projects, and we do get a lot of bang for our buck, but we still do have to spend some money, and that's NZD 15 million last year. That's page 13. Moving on to page 14, R&D pipeline. Look, we're using our cash flows, our profitability to invest in R&D.
Most R&D companies are endlessly raising capital, and I know certainly people overseas almost cannot believe that we can have a pipeline of all these products, and we're not raising money. We're literally funding them out of our own profitability. I think that's something that is not appreciated by our market, and I think the value and potential of these R&D products as well is probably not yet appreciated. We have our hospital injectable portfolio, and this really helps too. We've got our own affiliates, so we know we've got a pipeline that's ready to be fed into all those affiliates. Literally, we're filing our first dossier next month, which is pretty good. As I mentioned before, we only really started that project less than a year ago, so we made some really good progress on that. That also costs a bit of money too.
You have to buy different sort of materials, and there's quite a lot of also cost that goes into that as well. Then we've got our R&D pipeline. We've got an antibiotic eye drop for drug-resistant eye infections. One big one we did was the iron infusion, so we licensed that in last year. It's a late-stage development in partnership with Hyloris. This is quite an exciting product, and we've got a large clinical study there to do. It's going to be a good 800 patients. We're just getting that lined up at the moment and had our first FDA meeting, which we were pleased with. It was successful. Plazomacin, we're doing some work on that. The biggest indication by far is port wine stains, which has quite a significant number of patients.
Currently, we're doing studies, the first study in that, and also completing our facial angiofibroma program, which is an orphan disease, which is smaller because there's not that many patients. We're completing that as well. We have a number of other projects, Strawberry birthmarks. This is a pretty common condition in babies. They have Strawberry birthmarks, so that has, we believe, good global potential. Burning mouth syndrome, BMS, is a nasty condition. It does affect a reasonably significant number of female patients. Keloid scars as well are scars that kind of keep growing, and there are no treatments. Quite a number of these projects, what we've deliberately chosen and targeted is conditions with no real treatments, and that'll certainly be easier from a competitive land space, sort of competitive position when you're offering a treatment that there isn't another competitor.
Certainly, I mean, we're happy with pain, and our pain work has gone well, but the pain market is a very competitive space with multiple players. Everything being equal, it would certainly be nice to have areas such as keloid scars, BMS, burning mouth syndrome, Strawberry birthmarks, where really there aren't registered products available. That's page number 14. Now I'll flick on to page 15 and hand you over to our CFO, Malcolm Tubby.
Thank you, Hartley. Yeah. As we look at the, we'll start with the revenue, up NZD 12.5 million last year. The increase from product sales and ROI is up NZD 20 million and then brought back down by the lower licensing, kind of NZD 8 million. That affected the next line, the gross profit.
Gross profit overall, up NZD 3.5 million from product sales and revenues, up NZD 11.5 million then brought back down by the lower NZD 8 million less licensing income. Operating expenses increased NZD 10 million, significantly from the investments we are making into the new affiliates in North America, U.K., and South Africa. The increased R&D spend, so the total spend that Hartley talked about of NZD 15 million, a large proportion of that now has to go into the P&L rather than be capitalized. The last increase is the marketing for the new products and the new markets. Operating profit down NZD 6 million- NZD 6.5 million to NZD 17.6 million. The bulk of that is to do with the NZD 8 million lower licensing income. Without the licensing income, the profit actually increased by NZD 1.5 million.
If we look at the bottom of the page, the gross profit from the product sales and royalties, they actually grew at 14.5% ahead of the revenue growth of 11%. That is due to the improved percentage point improvement in the gross profit margin on product sales. If we turn to the next page, the balance sheet. Key feature here is the continuing reduction in the net debt down to NZD 14.5 million from NZD 16.2 million a year ago. You see the current assets have not increased that much. We have made some good improvements in inventory. Inventory is flat or is actually slightly down on last year despite the increased revenue. We are bringing our inventory days down over time. Debtors were up 11% in line with the revenue growth. If we move to the next slide, number 17, the cash flow.
You see slightly lower cash generated from operating activities. That's because we have lower creditors at the end of this year, higher debtors, and we have been paying some tax this year. We are into we've absorbed all our tax losses now, which means we'll be paying tax, which means that there will be more imputation credits becoming available, not this financial year, but in future financial years. The reduction in the cash invested in investing activities, that's lower. Again, that's because we're expensing more of our R&D spend. If you look at the financing activities, we reduced the debt by another NZD 2.6 million. That's the highlights for the cash flow. I'll pass back to Hartley.
Thank you, Malcolm. Just to go to page number 18, which is our outlook position to drive future growth in both revenue and earnings. We are working hard on extending our growth record, and we are aiming to achieve NZD 300 million by the end of FY 2027, so within two years. We believe the operations are now getting to the stage they're scaled and will benefit from the expanding geographical reach that we've talked about and also increasing product diversification. We have seen this diversification has been quite important. I mean, lots of people ask us about our views about the US. What we've done as a company is our income comes from lots of different places. We've got customers, strong customers in the Middle East, cross-border customers in Europe, even in African countries, one of our top of our list as well.
Yeah, we've purposely built a diversified geographic reach and also diversified product base as well rather than just relying on one kind of big bang. We have a strong program of new products in our core Australasian markets. We still see this as continuing for a number of years, and we do see continued opportunities for growth across existing portfolio. Certainly something that we do periodically, dive into the portfolio and work out and try and work out anyway, at least where we can strengthen it and where we can add products. Growth will also be supported by new product launches, especially in the international markets, to get further momentum building in those new business hubs and also to improve profitability with commercialization of the products now in development. That's sort of the pipeline starting to eventually feed in.
In terms of outlook and guidance, we see targets where FY 2026 guidance anticipating that to be in the range of NZD 20 million- NZD 24 million. Also, we have got ongoing significant investment, and that is sort of where we are seeing things as landing up. Thank you for your attention and happy to open it up for questions and answers. Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you're using a speakerphone, please pick up the handset to ask your question. The first question comes from Matt Montgomery from Forsyth Barr. Please go ahead.
Hi, guys. Good morning. Just on the rest of world profitability in the year you've just reported, are you able to quantify the extent of the losses in your startup businesses, your U.K., North America, and South Africa?
Yeah, I can do that. We've invested around about NZD 2.5 million into those this year, Mal. And then there's also those further marketing costs too that can be assigned to those businesses, isn't it?
We've got on top of that, yeah, for the products
Yeah,
on top of that as well.
Maybe two and a half, in EBIT, more than NZD 2.5 million losses in the year.
Yep.
Yep.
Yep. Yeah, look, I mean, I think it's to be expected. I know. I mean, once we've been asked by a person who sort of seemed to think we could start up and make profits straight away, most businesses struggle with that, and we're not saying we're any different. Typically, U.K. lost money for a couple of years, but we see we're getting to break even this year, which we're pretty pleased with.
Yep. Yep. And then just on R&D and your guidance for FY 2026, are you able to comment on what you expect as going through the P&L and then sort of total R&D cash outflow for the year as well?
Yeah. Total spend around about NZD 15 million and probably about the same sort of ratios as this year. Probably around about NZD 6 million, maybe NZD 7 million into the P&L.
Generally, the earlier phase projects, Matt, are going to be ones that we definitely have to expense where some of the later stage ones where you might have done X number of trials and proved it, then that can be capitalized. Certainly earlier, which you've got a number of earlier phase projects, they end up being expensed, don't they, Mal?
Yeah. In NZD 6 million capitalized, not expensed. NZD 9 million expensed.
Yeah. I was just going to bet you reported NZD 11.5 million expensed in the year just being. Are you saying it's going to be NZD 9 million or NZD 11.5 million?
I'd say it's going to be in that range, 9-11. It depends to a degree on the timing of the clinical trials, but I'll put it in that range.
Okay. I suppose on that basis then, you sort of reported a second half EBIT of NZD 19.5 million, and your guidance is NZD 20 million-24 million overall, and you're sort of lapping the one-off factors in the first half. Just trying to get a bit more color in terms of what's underpinning your guidance as you look down the P&L because if you're saying R&D is maybe going to go backwards, just any other color would be useful.
We are looking to grow the operating profit by about 25%. That really gets reflected through the P&L. We obviously anticipate revenue growth and gross profit growth. Marketing will have to grow with that.
Yeah. What's the extent of revenue growth affected and the licensing income as well within that?
We don't give guidance on revenue growth. We anticipate higher licensing income this year than last year. It won't be up to the, we don't think it's, barring, we haven't included any significant licensing income in the guidance, which is a consistent thing that we don't do. If there is any, we would let the market know. In the underlying number, we do see growth in the license, a bigger number in license income.
Okay. Just one more, and I'll pass it on. Just your FY 2027 target of 300 million, you're sort of looking at a two-year revenue CAGR of about 20% from FY 2025. You've delivered sort of 15% over the last five, ten years. What gives you the confidence in that step up in revenue growth over the next two years versus more recently? What's the extent of line of sight on that target?
Yeah. It's basically bottom up, and it's built on more significant contribution from the new offices or affiliates or whatever you want to call them, hubs. Literally launching in South Africa this year, then launches in Canada, a partner in the U.K. starting to come through. There is a greater contribution from those sort of areas on top of Australian and New Zealand growth continuing on track pretty much as it is. Asia also having some additional growth as the various projects come online in China and some of the other Asian markets.
Just to clarify, in Australia and New Zealand, you'd expect that sort of mid-teens type growth to continue?
Yep.
Yep. Cool. Thank you.
Thank you. The next question comes from Adrian Orbon from Jarden. Please go ahead.
Good morning, Hartley and Malcolm. Just the first question.
Hi, David.
Good day. Just in terms of the Australian performance for FY 2025, it's a AUD 10 million EBIT improvement. I get the top line sort of moved up nicely, and you're calling out leverage on the FY 2024 investments. As you look into 2026, which I imagine you're looking to sort of compound another AUD 20 million at the top line, should we be anticipating that EBIT moving back down as you kind of reinvest for the back half of 2026 into 2027? Is that a cyclical investment, or is it like you've got a sort of an infrastructure investment that you predominantly made in 2024, and we should expect some further profit leverage in 2026?
Yeah. So that one is what we see, Adrian. We do not see a decline in the operating performance of Australia. We did make that step up over the last, not this year, but a couple of years before that. We do see it improving.
Your 20.
We won't expect it.
You're saying it.
Yeah. It'll grow. With that revenue growth, we see that it'll continue to be operating profit will grow also.
Okay. And then just, I guess, a similar theme to sort of what Matt was asking, but if you kind of if you sort of look at I know the 2024, so the last two years of kind of 2024 had a big license income, and 2025 had a sort of first half that was sort of dogged by a few, yeah, the doctor's strike and customer de-locking stuff. If you sort of went back to 2023, which was kind of a relatively clean year, I mean, you're sort of doing revenues at NZD 160 million. As you sort of progress into 2026, you're kind of looking for revenues probably in the NZD 240 million range. The difference, I guess, is NZD 80 million. At a GM level, it's kind of NZD 35 million. And the sort of the EBIT performance is kind of the same.
When you sort of think about that cost-based attribution, there is sort of 35 million. I get there is sort of 5 million more in R&D, which we can all see. Yeah, there is probably 10-15 million more in A and Z. I mean, the rest must be presumably supporting these new offices and the international revenues. Is that the right way to think about it?
Yeah. Yeah, it is. Yeah. It is the increase in that revenue spend. Just to clarify Matt's earlier question, it is that higher number of R&D that we anticipate spending more around that NZD 11 million mark in the P&L.
Yeah. Okay. Okay. If you sort of took the 35 million at the gross margin level, which would, if you're trying to bridge a 2026 to 2023 as a base, the R&D is kind of 5. Now you're at 30. Probably the A and Z business is probably another 10 in terms of the infrastructure spend you've put into that.
Yeah.
The rest of it is actually quite a sizable investment in all those international offices and supporting the international revenues.
Yeah. I mean, look, there is because I guess once we've analyzed it carefully, for instance, South Africa, we've mainly focused on the private hospital market. The private hospital market is similar to the whole Australian hospital market put together. Then Canada is bigger than Australia, and the U.K. is clearly bigger than Canada. I guess, yeah, we are investing, yeah, to get more meaningful operations in those jurisdictions.
I guess, again, for the 2026 number, because I mean, I guess you had a little history of the first half of sort of generating NZD 3 million- NZD 4 million of EBIT, and then the second half, NZD 20 million. As we kind of, and I know last year was kind of stuffed up with the one-off items. When we think about 2026, which has got another decent compounding of revenue, otherwise your target looks way too stretched for 2027. Presumably you're factoring in quite a lot of investment into the international markets still. Otherwise, we would be seeing profit leverage.
It is ongoing. It is ongoing investment. The other one I was just looking at is the regulatory fees, which we include in selling and distribution. They have become more significant in the P&L as well. Yeah, we are going to continue, we do need to invest to get this future revenue growth.
Right. Sorry. I mean, obviously, I'm laboring this point because it's quite an important point because I think we all kind of acknowledge that the revenue performance of the company has been strong and very consistent. It's just been the cost base, which we've been underestimating, I suppose. On that basis then, when would you—you've given a revenue target. When do you kind of see in your projections, when do you sort of see the inflection point in terms of the margin expansion in the cost base?
Yeah. We see it more in that sort of, I was going to say 3-5, but it could be before 3. Yeah.
Couple of years, I know.
Yeah.
Okay. So it's sort of after the NZD 300 million of revenues kind of thing.
You should see it being there as well.
Yeah.
Okay. Cool. Thank you.
Thank you once again. To ask a question, please press star one on your phone. The next question comes from Fiona Rotham from NBR. Please go ahead.
Sorry. I didn't actually have any questions.
No worries.
I've already asked Hartley my questions. So no, I didn't have any questions.
Thank you.
Thanks. The next question comes from Matt Montgomerie from Forsyth Barr. Please go ahead.
Sorry to jump back in, guys. I just want to piggyback on Adrian and sort of what I was trying to ask earlier. In your FY26 guidance for this coming year, are you expecting EBIT margin expansion versus FY25 in Australia and New Zealand?
Yeah. Matt, let's see what I know. Yeah. No, I'm just having a look at it now. Yeah. A small one. Yes. Small.
Okay. What is factored in in terms of losses around the rest of world business? If we exclude Asia, just the rest of world in isolation then?
The rest of the world, we see around break-even. A lot of the performance, the difference, the delta this year was the license income was the biggest factor in that, in the international.
Maybe we take it offline, but the maths then does not, unless you're expecting Asian losses to be materially negative, the maths do not really work on that basis. Your incremental EBIT growth is, let's call it NZD 5 million. And if you're saying rest of world's going to zero, that's NZD 7 million of it. And you're saying A and Z EBIT margin's going to grow. There is a massive missing piece in here somewhere.
Yeah. We can type and take it further offline, Matt.
Okay. That would be useful, I think. Yeah. Thanks.
Thank you. At this time, we're showing no further questions. I'll hand the conference back to Hartley for any closing remarks.
Good. Thank you very much, everyone, for your attention. I guess the message we're trying to get across is we have been making significant investments and are sort of carrying on making those investments. We see as the international business grows and the R&D portfolio progresses, and that's going to really help to drive the business going forward. That's our kind of main message, really. Thank you. Look forward to meeting in person and answering any additional questions. Thank you.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.