Revenue nearly halved as losses and cash burn both deepened

Revenue fell 47.4% to $11.5 million from $21.8 million, the direct result of the loss of US Medicare coverage for the company's core diagnostic test, which under Medicare rules prevents revenue recognition until a pending appeal is resolved, expected to take six to nine months. This is not a like-for-like comparison; the prior year carried a full run-rate of Medicare-eligible revenue that FY26 largely did not.

The net loss widened 19.5% to $35.8 million from $29.9 million, with no tax distortion (effective tax rate nil in both periods), so the deterioration is a clean operating read. Operating cash outflow worsened 29.1% to $31.9 million from $24.7 million. Cash and equivalents fell 18% to $7.8 million, total equity fell 59.1% to $10.7 million, and total assets fell 52.5% to $17.6 million. The Commercial segment result deteriorated to a $22.6 million loss from $14.9 million despite the revenue collapse; the Research segment loss narrowed to $13.1 million from $15.0 million.

Capital raise adds balance-sheet context, with NZ$24m capital raised, but borrowings and gearing are the direct leverage evidence.

Capital raise adds balance-sheet context, with NZ$25.4m capital raised, but borrowings and gearing are the direct leverage evidence.

Capital raise adds balance-sheet context, with NZ$36.1m capital raised, but borrowings and gearing are the direct leverage evidence.

Revenue recognition is now contingent on a regulatory appeal with a six-to-nine-month expected delay, so the 47.4% revenue decline should not be read as evidence of a shrinking addressable market; it reflects an accounting recognition block tied to a specific payer decision. This matters because near-term top-line recovery depends on an external appeal outcome the company does not control.

Cash burn is accelerating against a shrinking balance sheet. Operating cash outflow of $31.9 million against year-end cash of only $7.8 million means the reported cash position covers a small fraction of the current annual burn rate, which is the central funding-adequacy question for the business independent of any single financing event.

Inventory days rose sharply while revenue nearly halved. Working-capital calculations show inventory days increasing to 64.7 from 26.9, even as receivable days fell to 34.7 from 47.2. This divergence signals inventory built for a volume base that did not materialise, raising the risk of future write-downs or write-offs if consumables are not consumed at the pace originally planned.

The half-year period contributed 51.6% of full-year revenue and 53.4% of the full-year net loss, implying a second half of roughly $5.6 million in revenue and a further loss of around $16.7 million, both similar in scale to the first half rather than showing a within-year recovery.

This matters because it indicates the Medicare-driven disruption persisted through the full year rather than resolving mid-year, and because without disclosed targets there is no external benchmark against which to judge whether current cost or cash trajectories are considered acceptable by the board.

Capital expenditure fell 61.5% to $0.5 million, taking capex intensity down to 4.5% of revenue from 5.8%, consistent with a deliberate capital-preservation stance rather than reinvestment for growth.

However, the free-cash-flow-to-NPAT ratio of 90.7% (versus 86.9% prior) should not be read as healthy conversion, since both the numerator and denominator are negative; it indicates cash losses are tracking close to accounting losses, not that earnings are being converted into cash surplus. The rise in inventory days adds a further balance-sheet quality caveat, since unsold stock sitting against a shrunken revenue base is a use of cash that has not yet shown up as an impairment.

This briefing cannot assess the outcome of the Medicare appeal or the company's funding sufficiency beyond the balance date.