Monash IVF Group had a very positive year in FY23, with strong performance in our domestic IVF business and improvement in the women’s imaging business driving Underlying NPAT1,2,3 growth of 14.7%.

This result was particularly pleasing given the challenging macro conditions including cost of living pressures, high inflation and monetary policy. Both the IVF industry and Monash IVF Group demonstrated great resilience which has created a good platform going into FY24.

This result was particularly pleasing given the challenging macro conditions including cost of living pressures, high inflation and monetary policy. Both the IVF industry and Monash IVF Group demonstrated great resilience which has created a good platform going into FY24.

Monash IVF Group delivered revenue growth of 11.1% to $213.6m. Growth gathered momentum across the year, with 2H23 revenue growth of 22% on prior comparative period compared to 1H23 revenue growth of 2% on prior year. Q1FY23 was challenging as COVID-19 and influenza in the community impacted activity in IVF and ultrasound resulting in the IVF industry declining by 6.6% compared to prior comparative period. Following the first half decline, the industry grew in 2H23 by 5.6% vs prior year. The ramp-up in second half growth indicated the current macro environment is not materially impacting patients’ willingness to afford and access fertility treatment.

The domestic assisted reproductive services, women’s imaging and international IVF businesses all achieved double-digit revenue growth in FY23. Revenue growth was driven by market share gains (both organic and from the ART Associates and PIVET acquisitions) and price increases. Second half performances in our domestic businesses were compelling, including 23% growth in 2H23 new patient registrations in our domestic IVF business, providing a robust growth platform heading into FY24.

The Group achieved Underlying EBITDA1,2 growth of 11.0% to $53.4m in FY23, driven by the domestic assisted reproductive services and and women’s imaging businesses, partially offset by a decline in earnings from international IVF business. Our domestic assisted reproductive services and women’s imaging business benefited from solid market share gains and price increases, partially offset by increases in certain costs including salaries and wages and supplier costs (largely reflecting the high CPI environment). In our international IVF business, the Singapore Greenfield clinic was impacted by key doctor availability in 2H23, which offset positive performances from our other clinics in the South-East Asia region.

The Underlying Group EBITDA1,2 margin was maintained at 25%, which was a reasonable outcome given the high inflationary environment. This demonstrates our ability to balance our commitment to maintaining access to our services, whilst addressing cost pressures by adjusting patient prices across all services and markets.

Monash IVF Group delivered strong cash flow outcomes during the year, with EBITDA to pre-tax cashflow conversion of 100%. Capital expenditure during FY23 was $28 million, which included new IVF clinics opening in Victoria, Gold Coast, Penrith and Darwin. Our new Gold Coast day hospital was commissioned in September 2023, with the Cremorne (Melbourne) day surgery unit progressing towards completion during 1H24. The finalisation of these sites will further expand the day surgery unit revenue stream and diversify Group revenue. The Group expects further capital expenditure at elevated levels during FY24 due to completion of the day hospitals and new IVF clinics in Sunshine (Victoria) and Brisbane (Queensland). We anticipate return to historical replacement capital expenditure levels beyond FY24 subject to new strategic growth initiatives.

Monash IVF Group spent $12.7m on business acquisitions in FY23. The ART Associates QLD acquisition was completed in late September 2023, delivering strong market share gains in Queensland in FY23. The PIVET acquisition was completed in late May 2023 with clinics in Perth and Cairns, resulting in Monash IVF Group having true national mainland presence.

Despite the major investments we have made in future growth across our businesses in recent years, our balance sheet remains in a strong position. Net debt was $31.0m as at 30 June 2023 and balance sheet capacity remains strong to fund domestic and South-East Asia market growth where Monash IVF Group is under-represented.

In closing, I would like to thank our people and clinicians for their hard work and dedication, and to thank you, our shareholders, for your continuing support. We are energised about the journey ahead for Monash IVF Group, as we move closer to achieving our strategic objectives.

Malik Jainudeen
Chief Financial Officer
& Company Secretary

1. Non-IFRS measure.
2. Refer to page 32 for reconciliation of Reported EBITDA, EBIT and NPAT to Underlying EBITDA, EBIT and NPAT.
3. NPAT including minority interest.