Announcement PDF Cryosite Limited Appendix 4E Preliminary final report 1. Company details Name of entity: ABN: Reporting period: Previous period: Reporting Currency: Cryosite Limited 86 090 919 476 For the year ended 30 June 2024 For the year ended 30 June 2023 Australian Dollars 2. Results for announcement to the market $'000 Revenues from ordinary activities up 5.7% to 12,612 Profit from ordinary activities after tax attributable to the owners of Cryosite Limited up 30.6% to 1,840 Profit for the year attributable to the owners of Cryosite Limited up 30.6% to 1,840 Dividends On 20 August 2024 the Board of Cryosite Limited declared an unfranked dividend of 2 cents per share will be paid to shareholders for the year ending 30 June 2024. This compares with a 1.5 cents unfranked final dividend, paid to shareholders, for the year ending 30 June 2023. The profit for the Group after providing for income tax amounted to $1,840,000 (30 June 2023: $1,409,000). Commentary on the results to the market Results for the year ending 30 June 2024 reflect a strengthening of trading conditions in the second half of the financial year. ● ● ● ● ● ● ● Revenue of $ 12,612,000 from ordinary activities up 5.7%. Net profit of $ 1,840,000 up 30.6%. Earnings per share of 3.77 cents, up 30.6%. 2 cents per share unfranked final dividend declared for the year ending 30 June 2024, up 33%. 5 cents per share capital returned to shareholders in February 2024. Cash and cash equivalents of $4,703,000, down $28,000 from prior year’s cash on hand of $4,731,000. No bank borrowings. A further explanation of the result of the current period is set out in the Directors' Report contained in the attached Annual Financial report 3. Net tangible assets backing Net tangible assets per ordinary security Reporting period Cents Previous period Cents 3.34 5.86 The calculation of net tangible assets excludes right-of-use assets, intangible assets, and lease liabilities. Cryosite Limited Appendix 4E Preliminary final report cryosite& 0 4. Dividends Current period Amount Franked per amount per security security Cents Cents 1.50 Final dividend for the year ended 30 June 2023 Previous period Franked Amount per amount per security security Cents Cents Final dividend for the year ended 30 June 2022 1.00 5. Audit qualification or review The financial statements have been audited and an unmodified opinion has been issued. 6. Attachments The Annual Report of Cryosite Limited for the year ended 30 June 2024 is attached. 7. Signed Signed Mod/_(� ,7 Mark Kerr Non-Executive Chairman Date: 20 August 2024 Annual Report - June 2024 Cryosite Limited Contents 30 June 2024 Corporate directory Chairman's message Directors' report Auditor's independence declaration Consolidated statement of profit or loss and other comprehensive income Consolidated statement of financial position Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the consolidated financial statements Consolidated entity disclosure statement Directors' declaration Independent auditor's report to the members of Cryosite Limited Shareholder information 1 2 3 5 19 20 21 22 23 24 51 52 53 56 Cryosite Limited Corporate directory 30 June 2024 Directors Mark Kerr (Non-Executive Chairman) Andrew Kerr (Non-Executive Director) Scott Thomas (Non-Executive Director) Company secretary Dray Andrea Notice of annual general meeting The details of the annual general meeting of Cryosite Limited are yet to be announced. Registered office 13a Ferndell Street South Granville NSW 2142 Tel: +61 2 8865 2000 Email: corporate@cryosite.com Principal place of business 13a Ferndell Street South Granville NSW 2142 Share register Link Market Services Limited Level 12, 680 George Street Sydney NSW, 2000 Sydney NSW, 2000 Auditor Forvis Mazars Risk & Assurance Pty Limited Level 12, 90 Arthur Street North Sydney NSW, 2060 Stock exchange listing Cryosite Limited shares are listed on the Australian Securities Exchange (ASX code: CTE) Website www.cryosite.com www.cryosite.com.au Corporate Governance Statement The Directors and management are committed to conducting the business of Cryosite Limited in an ethical manner and in accordance with the highest standards of corporate governance. Cryosite Limited has adopted and substantially complied with the ASX Corporate Governance Principles and Recommendations (Fourth Edition) (`Recommendations') to the extent appropriate to the size and nature of its operations. The Corporate Governance Statement, which sets out the corporate governance practices that were in operation during the financial year and identifies and explains any Recommendations that have not been followed, was approved by the Board of Directors at the same time as the Annual Report and can be found on the Company's website at: https://www.asx.com.au/markets/company/CTE 2 Cryosite Limited Chairman's message 30 June 2024 20 August 2024 Dear Shareholders, FY24 has been an exceptional year for Cryosite. With one of the largest single site liquid nitrogen tank farms in Australia, a skilled scientific team, and extensive specialised industry knowledge that underpin Cryosite's strength in biological and clinical trials logistics, we are well positioned for strong industry growth. We expect these segments to generate increased revenue and profit in the coming years as Australia continues to be a sought-after destination for pharma and biotech firms seeking highquality clinical trials. I am delighted to present to you the following highlights from the financial year 2024: • NPAT of $1.8m - an increase of 31% on prior year • EBITDA of $2.8m – an increase of 28% on prior year • Revenue from ordinary activities $12.6m - an increase of 6% on prior year • Earnings per share of 3.77 cents - an increase of 31% from prior year (on a fully diluted basis) • A dividend declared for FY24 of 2 cents per share – an increase of 33% on FY23 – payable in October 2024 • A capital return of 5 cents per share paid in February 2024 • Cryosite has no external borrowings It is pleasing to see that Cryosite’s cash balance of $4.7m at 30 June 2024 has remained steady on prior year. This is following $3.1m returned to shareholders in FY24 in the form of: • A capital return of 5 cents per share paid to shareholders on 29 February 2024 ($2.4m) • A dividend paid for FY23 of 1.5 cents per share ($0.7m) – an increase of 50% from FY22 In addition to the funds returned to shareholders in FY24, we have utilised our cash flow to undertake an extension to the footprint of our state-of-the-art facility in South Granville, NSW. This additional space will be utilised to, approximately, double Cryosite’s number of minus 80degree freezers and minus 192-degree liquid nitrogen tanks to support future anticipated growth. This will increase the footprint at site by 17%. I am pleased to advise that the works to increase the footprint at our current site are near completion and ahead of the December 2024 scheduled date. In addition, Cryosite continues to look at options for additional premises to help meet anticipated future growth. After several years of significant investment in our facility, plant and equipment, Cryosite is in a position to leverage these assets. To facilitate this growth, we have appointed an experienced market professional in the role of Business Development Manager. 3 Cryosite Limited Directors' report 30 June 2024 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Cryosite Limited (referred to hereafter as 'Cryosite', the 'Company' or 'parent entity') and the entity it controlled at the end of, or during, the year ended 30 June 2024. Directors The following persons were directors of Cryosite Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Mark Kerr (appointed on 8 December 2023) Andrew Kerr (appointed on 22 February 2024) Scott Thomas (appointed on 9 May 2024) Andrew Kroger (resigned on 25 June 2024) John Hogg (appointed on 8 December 2023 and resigned on 22 February 2024) Steven Waller (resigned on 8 December 2023) Nicola Swift (resigned on 8 December 2023) Luis Antonio (resigned on 8 December 2023) Non-Executive Chairman Non-Executive Director Non-Executive Director Former Non-Executive Director Former Managing Director Former Non-Executive Chairman Former Non-Executive Director Former Non-Executive Director Dividends Dividends paid during the financial year were as follows: Consolidated 2024 2023 $'000 $'000 Final unfranked dividend for the year ended 30 June 2023 of 1.5 cents (2022: 1.0 cents) per ordinary share 732 488 Principal activities During the financial year the principal continuing activities of the Group consisted of: (1) Clinical trials and biological services logistics: Specialist temperature-controlled storage, sourcing. labelling, status management, secondary packaging, schedule drug distribution, destruction, returns, biological services and cell gene therapies depot services. (2) Cord Blood and tissue storage: Storage of cord blood and tissue samples. Review of operations The profit for the Group after providing for income tax amounted to $1,840,000 (30 June 2023: $1,409,000). Earnings per share Basic earnings per share Diluted earnings per share 2024 Cents 2023 3.77 3.77 2.89 2.89 Overview The financial result for the year ended 30 June 2024 was strong. The Group posted a net profit of $1,840,000 which exceeded the previous financial year’s result for the year ended 30 June 2023 by 31% (prior corresponding period). There has been a return of year-on-year positive momentum at Cryosite in the financial year of 2024 as customers' trading patterns emerge from the aftermath of the pandemic. ● ● ● ● ● Revenue from ordinary activities $12,612,000. An increase of 6% on prior year. Net profit after tax of $1,840,000. An increase of 31% on prior year. Earnings per share: 3.77 cents. An increase of 31% on a fully diluted basis from prior year. $4,703,000 of cash and cash equivalents as at 30 June 2024. No external borrowings. Net cash from operations of $2,743,000 up by 14% from the reported $1,408,000 adjusted by $1,000,000 put into term deposit in the prior year. 5 Cryosite Limited Directors' report 30 June 2024 The Group generated revenues from ordinary activities of $12,612,000 (30 June 2023: $11,935,000) and delivered a net profit after tax of $1,840,000 (30 June 2023: $1,409,000), a 6% growth in revenue from ordinary activities in 2024. Despite of the pressures of persistently high inflation, the Group has seen an increase of gross profit margin and operating profit margin. The Group tightly controls costs but purposefully invests in facilities, systems and staff, to optimally position the Group for continued growth. The Group has continued its positive year-on-year growth. As at 30 June 2024, the Group has utilised all carried-forward tax losses and is now in a tax payable position. This means that the Group may be able to issue a partially-franked or a fully-franked dividend to shareholders in future years. Franked dividends, provide a tax benefit to shareholders. Based on past business performance, the Group paid 5 cents per share as a capital return to shareholders on 29 February 2024. Net tangible assets per ordinary share have decreased by 2.52 cents, from 5.86 cents on 30 June 2023 to 3.34 cents on 30 June 2024. The Board declared a 33% increase in the final unfranked dividend to 2.0 cents per share for 2024, following a final unfranked dividend of 1.5 cent per share declared for 2023. Cashflow The Group continues to hold $4,703,000 cash on hand as at 30 June 2024. This cash balance was after the 5 cents per share, $2,400,000 return of capital to shareholders on 29 February 2024. The reported net cash from operations of the Group during the financial year 2024 was $2,743,000 (2023: $1,408,000, including a $1,000,000 term deposit for comparison purpose). The 14% increase of $333,000 was driven by the increased collections in the year of 2024. Cashflow from investing activities was $727,000 (2023: -$1,223,000). To make a meaningful comparison, the figures of both years need be adjusted by the $1,000,000 term deposit. Then the adjusted cashflow from investing activities was -$272,000 (2023: -$224,000). The $48,000 increase represented increased cash outflows for capex payments in 2024. Cashflow from financing activities was -$3,498,000 (2023: -$796,000), which include the dividend payment of -$732,000 (2023: -$488,000) and the return of capital -$2,441,000 (2023: $nil) in 2024. Environmental, social and governance Our facility improvements reflect decisions to improve the design, construction, and operations of the site to reduce our environmental impact. Past and current investments in new capital equipment contribute to our GHG reduction strategy. Our unwavering commitment to sustainability has resulted in our recent achievement of a silver medal from EcoVadis in February 2024. Our updated Governance Policies reflect our commitment to ethical, transparent, and responsible business practices. Stability in the state of affairs Our stability in a changing industry landscape reflects effective strategic planning and execution. It highlights our ability to maintain a steady course while adapting to the evolving needs of our clients and the market. Governance and Management In Governance and Management, our Board steadfastly upholds the highest standards of corporate governance and ethical behaviour. We significantly enhanced our ESG policies in the last quarter, integrating environmental guidelines, a robust supplier code of conduct, and stringent modern slavery policies. These updates are designed to align with and reinforce our Group's strategic objectives while enhancing transparency and accountability at all levels. Further demonstrating our commitment to continuous improvement, we actively engage in external assessments through the EcoVadis platform. These assessments not only provide valuable insights but also serve as a crucial benchmark against industry standards, guiding our ongoing efforts to elevate our operational practices and ethical standards. 6 Cryosite Limited Directors' report 30 June 2024 Material business risks We remain vigilant in the face of macroeconomic risks, climate change and regulatory compliance challenges. We continue to update and invest in the latest HVAC technology and equipment to manage and monitor the impact of the climate on our operations. Our diverse customer base and strategic partnerships are key in helping us manage these risks. Macroeconomic Despite our strong position in the specialist clinical trials storage and logistics sector, we recognise that we are not immune to external economic factors such as inflation, supply chain disruptions and new competitors. Our strategy involves monitoring economic indicators, maintaining strict internal controls, and diversifying our customer base into the new growth sectors such as biological storage and cell & gene therapies storage and depot services leveraging our 22 years of cryogenic cord blood expertise. Regulatory compliance The Group's purpose-built, modern facility is licensed by the Therapeutic Goods Administration (TGA) of Australia and is Good Manufacturing Practice (GMP) certified to support the specialised needs of highly regulated, temperature-sensitive products. We take our quality obligations and responsibilities seriously. Cryosite maintains accreditations, has thorough knowledge of regulatory systems and utilises best-in-class management systems to ensure our quality processes. Cryosite employs regular and extensive audits to mitigate our risk and ensure our storage facilities meet TGA and our customers' standards. Additionally, the Group maintains sufficient internal controls to ensure continued compliance with its regulatory obligations as well as all Australian laws and regulations. Privacy and cybersecurity In an era where data security is paramount, the Group has continuously invested in staff training and infrastructure to protect sensitive information and maintain cybersecurity. Cryosite has initiated its journey to align with the Australian Signals Directorate (ASD) Essential Eight Maturity Model. Work, health and safety (‘WHS’) The Group has a zero-risk tolerance for serious safety incidents. The Group deploys a continuous improvement process to its WHS practices, emphasising its established safety culture throughout the organisation, and providing scheduled training for the workforce. Operating risks ● Supply Chain disruption: The Group is part of a global supply chain facilitating the conduct of clinical trials in Australia. Disruption to this supply chain, as we saw during Covid, brings both challenges and opportunities requiring the Group to remain agile in its response. ● Commercial Partners: The Group is aware of the importance of global pharmaceutical and bio-tech companies within its Clinical Trials division and mitigates risk through consistently high levels of customer service, the attraction of new clients, and expansion of its licenses and services. ● Competition: The Group is vigilant regarding the possibility of a new market entrant or a change in the delivery model for Clinical Trials in Australia. It mitigates this risk by holding a number of licenses and certifications, investing in its facilities, services and people and by remaining closely connected to its customers. The Group continually invests in its brand and enjoys a high reputation in Australia and internationally. Employees and diversity As at 30 June 2024, the Group employed 25 full-time equivalent employees (2023: 25 employees). We are proud that our staff have a rich mix of backgrounds, experiences and perspectives, giving the Group a unique culture and a competitive advantage. The Group strives to create an inclusive environment that empowers everyone to contribute and make a real difference. This enables our teams to support the success of our clients, and helps our people reach their full potential. The Group recognises the value of diversity in the workplace. With over ten different ethnic backgrounds, our staff create a culturally and linguistically diverse workplace. There are numerous religions and cultures. Where possible the Group endeavours to offer flexible work practices. Work life balance is seen as a key retention tool. 7 Cryosite Limited Directors' report 30 June 2024 The Group is committed to providing equal opportunity for all its staff. An overall staff mix of 48% females and 52% males, is also reflected in the direct reports to the CEO with 50% female. Cryosite is committed to providing a workplace free from any form of harassment, bullying and discrimination. 30 June 2024 Male Female Total All employees Management Team lead Age range 13 12 25 3 3 6 2 2 4 All employees % Management % Team lead % 52 48 100 50 50 100 50 50 100 31-69 34-63 Board of Directors 3 3 30 June 2024 Male Female Total Average age 45 42 Board of Directors % 100 100 Significant changes in the state of affairs On 15 February 2024, the Company approved a return of capital of 5 cents per share by way of an equal reduction in accordance with sections 256B and 256C of the Corporations Act 2001 (Cth). There were no other significant changes in the state of affairs of the Group during the financial year. Matters subsequent to the end of the financial year No matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years. Likely developments and expected results of operations Information on likely developments in the operations of the Group and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Group. Environmental regulation The Group provides a range of services that require compliance with legislation and regulations administered by government authorities and statutory bodies, including the Therapeutic Goods Administration (TGA), the Office of Drug Control, the Australian Government Department of Agriculture Fisheries and Forestry and the New South Wales Department of Health. The Group holds and maintains a Good Manufacturing Practice (GMP) Certification. Additionally, the Group must comply with environmental guidance within the quality system requirements of many of its customers. Cryosite has a Group-wide quality management system to ensure that it meets or exceeds the requirements of all these interests. There have been no significant known breaches of Cryosite's license conditions or any regulations to which it is subject. The Group, to the best of its knowledge, is not subject to any specific environmental regulations. 8 Cryosite Limited Directors' report 30 June 2024 Information on directors Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Mark Kerr (appointed on 8 December 2023) Non-Executive Chairman LLB (The University of Melbourne) Mark Kerr has a long and successful career with public companies. He is the founding Chairman of Nido Education Ltd, an ASX listed company (ASX: NDO). Mark was also the founding Chairman of Think Childcare Group which was sold to Busy Bees in 2021. Chairman – Nido Education Ltd Managing Director – Hawthorn Resources Ltd None 9,000,000 ordinary shares None Andrew Kerr (appointed on 22 February 2024) Non-Executive Director CPA, GAICD, BCom (The University of Melbourne) Andrew is an experienced financial services professional in both the Australian and international markets. Andrew has previously worked at Macquarie Bank (Green Investment Group & Commodities and Global Markets divisions), Bank of America Merrill Lynch, and Meridian Energy Australia (Powershop Australia). None None Chair of Audit and Risk Committee; Member of the Remuneration and Nominations Committee None None Scott Thomas (appointed on 9 May 2024) Non-Executive Director Diploma of Financial Strategy (Oxford University), Master of Applied Finance (Macquarie University), Bachelor of Commerce (The University of Melbourne) Scott has strong experience in the financial services profession both in Australia and the United Kingdom having held senior roles at ANZ and Vanguard Investments. None None Chair of the Remuneration and Nominations Committee; Member of Audit and Risk Committee None None 9 Cryosite Limited Directors' report 30 June 2024 Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Andrew Kroger (resigned on 25 June 2024) Former Non-Executive Director BEc., LLB (Monash) Andrew Kroger had a career in stockbroking, law and general management including two years running Forsayth Group in 1990 which was Australia’s ninth largest gold producer at that time. Andrew is the owner of Process Wastewater Technologies LLC, a company with its major business being in wastewater in the United States. Andrew has a Bachelor of Economics and a Bachelor of Laws from Monash University. Andrew was appointed to the Cryosite Limited board in November 2011. None None None Not applicable as no longer a director Not applicable as no longer a director John Hogg (appointed on 8 December 2023 and resigned on 22 February 2024) Former Managing Director Logistics and Supply Chain Management John has strong experience in the supply chains both in Australia and the United States having held senior roles at Allegan, Johnson & Johnson, and Philips None None None Not applicable as no longer a director Not applicable as no longer a director Steven Waller (resigned on 8 December 2023) Former Non-Executive Chairman B Pharm (Sydney), MBA (Macq), GAlCD. Steven Waller was appointed as a Non-Executive Director of Cryosite Limited as of 19 November 2021. On 10 March 2022, Steven replaced Bryan Dulhunty as Non-Executive Chairman. Steven has extensive experience with large pharmaceutical companies, both in Australia and internationally. In Australia Steven held senior management roles at Sigma Healthcare Limited and Aspen Pharmacare Australia Pty Limited. Between 1996 and 2007, Steven held several international roles in sales, marketing and general management with Johnson and Johnson in the Middle East, Europe, the US and Asia-Pacific. Steven also owns a consulting business which provides services to the pharmaceutical industry and the broader health care industry in Australia, including government agencies. Steven is a registered pharmacist, has Master of Business from Macquarie University, and is a graduate of the Australian Institute of Company Directors. None None Former Member of Nomination and Remuneration Committee Not applicable as no longer a director Not applicable as no longer a director 10 Cryosite Limited Directors' report 30 June 2024 Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Nicola Swift (resigned on 8 December 2023) Former Non-Executive Director BA (Mod) Legal Science (TCD), MA (TCD), CFA, GAICD. Nicola Swift has an extensive background in the international investment management and securities industry as a research director, portfolio manager and equity analyst in London, Sydney and Boston with various global institutional investors. Nicola is a Chartered Financial Analyst, a graduate of the Australian Institute of Company Directors and holds an Honours Law degree and a Master of Arts from Trinity College Dublin. Nicola was appointed to the Board on 3 November 2016. None None Former Chair of the Remuneration and Nominations Committee and Former Chair of Audit and Risk Committee Not applicable as no longer a director Not applicable as no longer a director Luis Antonio (resigned on 8 December 2023) Former Non-Executive Director BA (UNSW), BA (CSU), MBA (Curtin), CPA, GAICD. Luis Antonio brings more than 20 years’ experience in the pharmaceutical and medical device industries to this role. He is an accomplished finance professional who, over the last 6 years, has held senior sales, marketing, and general management roles in international medical device companies. His experience and expertise complement Cryosite’s logistics and storage business. Luis has professional interests in operations and finance excellence, new information systems and analytics, commercial collaboration and business strategy. Previously, Luis has held positions as Head of Finance for Johnson & Johnson Medical Asia-Pacific, Vice-president of International Finance at Wright Medical, Vice-president Sales and Marketing Europe, MEA and Canada at Wright Medical, and Vice-president Asia-Pacific and MEA at Wright Medical. Luis is currently Area Vice-president Asia Pacific for Paragon28. None None Former Member of Audit and Risk Committee Not applicable as no longer a director Not applicable as no longer a director 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Company secretary Dray Andrea (appointed on 18 January 2023) Dray is a member of the Company Matters Pty Ltd team (part of Link Group, including Link Market Services share registry). Dray has over 8 years of experience in registry management, general meetings and shareholder communications. Dray holds membership of Governance Institute of Australia and the Chartered Governance Institute (UK). 11 Cryosite Limited Directors' report 30 June 2024 Meetings of directors The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2024, and the number of meetings attended by each director were: Attended Mark Kerr Andrew Kerr Scott Thomas Andrew Kroger John Hogg Steven Waller Nicola Swift Luis Antonio 6 4 2 12 2 6 6 6 Nomination and Full Board Remuneration Committee Held Attended Held 6 4 2 12 2 6 6 6 1 1 1 1 - 1 1 1 1 - Audit and Risk Committee Attended Held 2 2 3 3 3 2 2 3 3 3 Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee. Remuneration report (audited) The remuneration report details the key managemen