Thank you for standing by, and welcome to the Pacific Smiles Group half-year results presentation. All participants are in listen-only mode. There will be a presentation followed by a Q&A session. If you wish to ask a question, you will need to press the star key followed by one on your telephone keypad. I would like to hand the conference over to Mr. Phil McKenzie, Chief Executive Officer and Managing Director. Please go ahead. Thank you and welcome everyone to the presentation of Pacific Smiles Group financial results for the December half. For those of you who don't know, I'm Phil McKenzie, the Chief Executive Officer and Managing Director of Pacific Smiles, and I'm joined today by Matthew Cordingley, our Chief Financial Officer. Together, Matthew and I will be taking you through the presentation lodged with the ASX this morning. This will include a detailed review of the company's first half performance and an update on our growth strategy and outlook. Before commencing, I'd like to provide some context for the presentation. Like many businesses around Australia, Pacific Smiles is operating in a difficult and uncertain environment, with the effects of COVID-19 still present two years on. COVID has affected our business operations and therefore performance during the December half. Lockdowns and outbreaks in parts of New South Wales and Victoria, which are key regions for us, limited movement and the availability of people, dentists, employees, and patients, with all months except for November impacted to some extent. Our ability to fully operate at normal levels in many locations was constrained and further impacted by high levels of fail to attend or unable to attend appointments for patients. The emergence of high volumes of Omicron cases in December also had a dampening effect on the demand, and that has continued into January. It was important that we work through these disruptions as effectively as we could, managing staffing and other costs nimbly while ensuring the patients and employees were kept safe in operations. It's been just as important that we position our company for the rebound when we emerge from COVID, which we will. Our business model and growth plan is the right one for PSQ, and when not impacted by COVID, patient demand is strong. I'm pleased to report that our growth strategy is on track, and we'll be detailing the progress made in growing our dental network during the most recent half. On Monday, the 7th February, Pacific Smiles Group announced the appointment to the board of Mr. Andrew Knott as a non-executive director. Up until January 2022, Andrew held the role of President of Verizon within the advertising agency, Publicis Groupe, based out of the United States. Leading over 850 staff, Andrew oversaw $1.5 billion of client spend and delivered over $200 million in group revenue. Andrew has extensive experience as a senior executive in Australia, Asia Pacific, and the United States. We extend a warm welcome to Andrew, and PSQ looks forward to benefiting from his many years as a marketing and customer strategy leader. Now, to the presentation. I'll provide a general business overview and highlights of the half one result. Matthew will discuss the results in more detail, and I'll finish with an update on the growth strategy and outlook. Of course, we're happy to take questions at the end of the presentation. Turning to slide three. It's imperative to all of us at PSQ to start with our true purpose, which is to improve the oral health of all Australians to world's best. At Pacific Smiles, we work to expand our position as the leading dentist service organization in Australia with three key value propositions that underpin our true purpose. Firstly, we respect the dentists that select us to manage and grow their practice. They know that we'll support them in every way in the delivery of professional dental care. Secondly, our patients. We appreciate and value their trust in us as their local dental experts. They know their dental health is our priority. Thirdly, our dedicated team members. They matter to us. Without them, we can't deliver service to our dentists and through them, care to our patients. Their work is important and makes a difference. These value propositions continue to guide everything we do. Turning to slide four, let's start with the key points for the first half result. I've explained the backdrop to the December half performance in the form of COVID-related restrictions, and these impacts are evident here. Patient fees were AUD 108.8 million, down by AUD 10.6 million on fees in the same period, FY 2021. Same-center patient fees were down 14%, with the two-year average for this metric coming to a decline of 0.9%. The same factors led to a 76.6% decline in underlying EBITDA to AUD 5 million for the half. Underlying net profit fell to a AUD 1.5 million loss, down from an underlying profit of AUD 10.4 million in the same period in FY 2021. A reminder that the underlying results exclude the impact of AASB 16, the Australian accounting standard relating to the recognition of operating lease liabilities. Despite this operating environment, it is important that we continue to execute on our strategy of measured growth, and we did. 10 new dental centers were added during the half, taking our total footprint to 119 Pacific Smiles dental centers by the end of the period. In addition, we opened a further three HBF Dental centers, taking the HBF centers number to five. No interim dividend was declared for H1 2022. Turning to slide five. This first chart is our patient fee and number of centers. The second chart is our underlying EBITDA. The two charts provide a historical performance context over 12 years. In this period, patient fees shows a growth trajectory, a direct result of our new center rollout program, which has seen our dental centers increase from 28 to 119 in the same period. With our strategic focus to accelerate our new center rollout program, this growth trajectory positions PSG well into the future. The EBITDA graph shows a similar growth pattern. Let's go to slide six for a look at the operations in more detail. With the 10 new Pacific Smiles Dental centers opened in the first half, six were in New South Wales, located at Cameron Park, Chullora, Corrimal, Goulburn, Hornsby, and Merrylands. two in Victoria, located in Doncaster East and Oakleigh, and two in Queensland, located in Coomera and Loganholme. These openings were supported by successful pre-booking campaigns to drive appointments from new patients. Forward bookings for these new centers were strong. For example, we generated close to 700 appointments for Coomera and Queensland, and more than 500 appointments in Cameron Park and Hornsby in New South Wales, and also in Oakleigh in Victoria. Our most recent Pacific Smiles Dental center at Chatswood, which is our 120th center, opened on Monday the 14th of February with a record 728 pre-booked appointments. We are delighted and pleased with this significant achievement. We've added three new HBF Dental centers in Western Australia, located in Cannington, Mandurah, and Joondalup, as part of our managed services agreement with HBF, noting these managed service businesses are not counted in the total PSG center numbers. The HBF Dental centers also performed strongly at opening, being booked fully for the first six weeks in advance. As well as opening new dental centers, expanding the number of dental chairs supporting our network is an important goal, which gives us the capacity to service more patients and grow fees. During the first half, we added 11 additional dental chairs to our existing centers, taking the total number of 41 dental chairs across the network for the first half. This takes the total number of operational chairs across our network to 508. We have more than 800 dentists practicing within our facilities, and we continue to achieve a retention rate of more than 90% for dentists, and this is a celebrated result within the organization. Our Net Promoter Score remains the cornerstone of the business, and we're very proud that it remains greater than 85. Turning to slide seven. We responded to the disruptive effects of COVID with new ways of working and communicating. Across the half, we facilitated webinars as part of our service offering to support the professional development of dentists practicing in the Pacific Smiles network. More than nine webinars were held with more than 1,400 participants joining and having access to the course content. Our center teams conducted outbound contact programs to reschedule appointments that were canceled as we complied with all government regulations across the various states. We have reduced administrative tasks in our centers and managed staffing levels closely during the periods of peak absenteeism to prevent center closures. Our focus, as always, was ensuring we could safely support dentists in their work. I'd now like to hand over to Matthew to take you through the first half financials in more detail. Thanks, Phil, and good morning to everyone on today's call. Slide nine outlines our income statement for the December half in more detail. The results are expressed on an underlying basis and exclude various one-off items, including Everything Dentures, asset impairment, severance, and executive long-term incentive plans. As Phil has also flagged, and as many of you would know, the underlying result as shown here also excludes the impact of AASB 16 leases. We've included in the appendix reconciliations of the underlying results presented here with the statutory results post AASB 16, and a restatement of the December half income statement, balance sheet, and cash flow statements to reflect AASB 16. Group revenue for the half was down 14.6% to AUD 66.9 million, which we attribute almost entirely to the 14% decline in same-center patient fee growth, driven by the government-mandated lockdowns in the half. The impact of the same-center fee decline was offset slightly by the incremental fee contribution of new centers opening in the half and the full half contribution of new centers that opened in FY 2021, most of which performed well. Underlying EBITDA was similarly affected, down 76.6% for the period. The result was distorted somewhat by the uplift of JobKeeper payments in half one FY 2021, which were not available to us in the most recent half. If not for the disruption of Omicron, PSG was certainly on track to achieve top end of guidance provided at the AGM for patient fees and EBITDA. In general, as lean as our cost base is, it was always going to be challenging to leverage it effectively given the reduced volumes we saw during the peak of lockdowns in New South Wales and Victoria. That's evident in the decline of the reduced EBITDA margin and EBITDA to patient fees margin. The accelerated opening of new centers in FY 2021 and in the December half, coupled with the investment in new technology, is evidenced in the increased depreciation and amortization charge, which is up by AUD 1.7 million or 29.3%. Over the next two slides, I'll take you through the EBITDA and EBITDA margin bridge, first to underlying EBITDA, the drivers of the decline to AUD 5 million in the half year. The largest contributor was the decline in same centers of AUD 9.2 million. Same centers saw a decline in patient fees of 14% on the same period in FY 2021 for reasons well explained. The EBITDA contributions of new centers opening in FY 2021 was down due to COVID restrictions hindering growth in practitioner hours. As usual, there were some start-up losses from new centers opened in the first half of FY 2022 and corporate costs associated with investment in technology and other support for the expansion strategy. The last and significant contributor to the decline in group EBITDA, of course, was the impact of JobKeeper payments in the first half of FY 2021, which artificially boosted EBITDA in that period compared to this half. Now to the EBITDA margin bridge on slide 11. The EBITDA margin in the most recent half year was 4.6%, down from 17.4% in the prior December half. This can be traced to COVID impacts, particularly on the same center EBITDA margins. The absence of JobKeeper subsidies, again, a big contributor to the same centers decline, as were technology investments for the future and limited track availability evidenced by reduced track hours, offset slightly by an increase in average services per appointment. In essence, for reasons largely out of their control, many centers were simply unable to fully leverage their fixed cost base over the period. There was also some margin impact from the center mix generally, with a greater proportion of newer centers in the period, which are less profitable than our mature centers. Finally, the periods saw an increase in the corporate cost margin to 8.6%, up from 6.2%. While we invested in technology capability that will support our future growth, the reduction in patient fees has obviously contributed to the increase in this ratio. Cash flow and balance sheet on slide 12 shows a brief discussion of the cash flows of the business and the balance sheet. To cash flow first. Clearly, the decline in EBITDA had the biggest impact on the reduction in operating cash flow. The change in working capital reflects the timing of creditor payments. CapEx during this December half was up slightly to AUD 14.2 million, and this funded the 10 new centers that were opened, a number of relocations, expansions, upgrades of technology and dental chairs, and refurbishments of some centers. Now, no interim dividend has been declared. In light of the uncertain outlook, the company has elected to be prudent with respect to balance sheet management. However, we will consider a final dividend relative to the performance in the second half. Current assets have increased, reflecting the increased inventory related to new centers and chairs. The impact of new centers opened in FY 2021 and the first half of the current year is evident in the increased property, plant and equipment by the end of the period. PSG has AUD 9.7 million of cash on hand, and while borrowings have increased to finance the rollout of new centers, our balance sheet remains strong. There is ample liquidity available to the company in the form of cash and undrawn facilities, giving us flexibility as conditions stabilize. I'll hand back to Phil now to take you through the remainder of the presentation. Thank you, Matthew. Before updating the growth strategy and outlook, I wanted to acknowledge our commitment to sustainability. We're engaged in embedding sustainability solutions through Pacific Smiles, and we've made significant progress in this journey. The key initiatives span recycling, water and efficiency in operations, safe data destruction, sustainable construction practices and sourcing in new centers, enabling our suppliers, ensuring our suppliers are ethical and socially responsible, and the selection of materials for their impact on the environment and communities. As I said, this is a journey and one that Pacific Smiles is committed to. We'll report on our progress periodically. Turning to slide 15. We know that COVID won't be a permanent feature in our operating environment, and that there's already signs that the fog of uncertainty is lifting. As challenging as the December half was, it has not knocked us off our long-term strategy plan. Our growth program projects a footprint of more than 250 centers, more than 800 chairs, and an EBITDA to patient fees margin consistently higher than 15%, and a goal of more than 5% market share in the Australian dental market. The fundamentals of this strategy are strong, clear culture, consistent operational excellence, agile innovation, and profitable network growth. Culture underpins every successful enterprise. For Pacific Smiles, it means ensuring our people share our purpose, love what they do, and operate together as a seamless unit. Our people are proud to be PSG. Operational excellence helps us effectively leverage a large growing network, lifts productivity, and underpins continued margin growth. Innovation is important to dental care. Agility with emerging technologies will help us attract and retain dentists and patients, and it's an ongoing focus for us. We'll continue to grow our dental network, attract quality dentists, and apply a whole of team focus to bringing these centers to profitability quickly. Our commitment to network growth is evident in the fact that we opened 10 more Pacific Smiles dental centers and a further three HBF dental centers during the first half, and we remain on track to open at least 5-10 new PSG dental centers before the end of the fiscal year. Slide 16 provides comments on network growth as it applies to new and existing centers and illustrates growth from existing centers. At the end of December 31, almost a third of our centers were less than three years old, or so-called immature. We see this as a tremendous opportunity for us, given the same center EBITDA growth contribution that we've seen from mature centers opened within the past 10 years. Across the business, there's a clear focus on innovation and targeted marketing to attract new patients, delivering a superior experience to existing patients, and engaging in post-appointment in ways to generate repeat visits and positive word of mouth. Our strong Net Promoter Score and repeat attendance speaks to the success of this great work. Currently, 85% of our available surgeries are commissioned, and we have a further 90 surgeries available to be commissioned with chairs to meet future demand. Turning to slide 17. This slide shows the incremental growth in patient fees, EBITDA, and EBITDA margin from new centers as they mature to five years and beyond. It shows the long-term and sustained growth that centers opened in recent years will deliver in years to come. Our target is to generate more than 400 appointments before a center opens and more than 2,000 appointments in the first six months of operation. As I mentioned earlier, the outstanding pre-bookings generated for the new centers in Coomera, Cameron Park, Hornsby, and Oakleigh were all well above these targets. New centers typically start with three chairs commissioned and have the capacity to increase that to five. We've targeted profitability between 9 months-12 months of opening and for the CapEx investment in the new centers to be paid back within five years. Turning to Slide 18, we showcase the managed service relationship we have with HBF in the west. Under this agreement, Pacific Smiles manages the operation of HBF Dental Centers in Western Australia. HBF is the largest health fund in Western Australia and is a fixture in that state's healthcare landscape. As I mentioned, we opened three new HBF Dental Centers during the first half, taking the number of centers currently in operation to five. The new dental centers performed strongly. All were booked out six weeks in advance with only emergency appointments available. HBF dentists are included in the PSG Insight Graduate Program and have access to online learning. The HBF dental employees also have access to PSG's leadership and mentoring programs. Now to outlook. Slide 19. We advised the market in our recent update, forward visibility, and therefore forecasting is difficult at this time. For this reason, we withdrew our full year guidance and undertook to return to monthly trading updates. Our trading update for FY 2022, as of the 14th of February 2022, is patient fees year to date, AUD 135.1 million. Patient fees decline year over year, 9.8%. Same center patient fees decline year over year, 13.9%. However, we're seeing activity start to increase in February. The total patient fees from the first of January to the fourteenth of February declined year over year by 7.1%. However, the last seven days of trading in February has seen total patient fees grow by 3.5%. These green shoots of year-over-year growth show signs of improvement in patient attendance at dental centers as key markets emerge further from COVID-19-related constraints. We remain on track to open 15-20 new Pacific Smiles centers over the full financial year. Our next trading date, trading update will be released March 2022. In closing, on behalf of the executive leadership team, I wanna say thank you to all the Pacific Smiles team. Whether they're field-based leaders, the dedicated employees in center operations, or those equally dedicated employees working in our support office, your efforts and energy is incredibly important and very much appreciated during these recent times. At the same time, to the dentists who practice at Pacific Smiles, I'd like to say a sincere thank you. The trust and respect you place in us by choosing to operate your practice in our network motivates our commitment to grow and deliver on our true purpose. We trust that today's update has given you a comprehensive insight to our business and as to our confidence for the rest of the full year. Matthew and I are now happy to take your questions. Thank you. If you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel the request, please press star two. If you are on speakerphone, please pick up your handset to ask a question. The first question is from Melissa Benson, from Wilsons. Please go ahead. Morning, Phil and Matthew. I just had a question around the gross to net revenue ratio. We saw in this half that flipped back to about 61.5%, but it's, you know, typically resided around that 65% level. I just wondered if you could please provide any commentary here, and also, you know, how we should think about this moving forward into the second half and you know, beyond that. Yeah. Melissa, hi. Thanks for your question. So, simply put, that's as a result of the mix of SFA dentists to locums during the half. Obviously, with the borders closed, there was a lower proportion of locums that were operating in the dental centers business. That impacts the way revenues are reported. The way to think about this is to look at the gross margin line as a percentage of patient fees, and that is just stable at just under 60%. It's not a bigger take from the SFA dentist. It's a locum SFA mix issue. We'd expect that... Got it. to stabilize once it's open. Okay, great. Thanks. Just one other quick follow-up. You did mention that the first half period was impacted obviously by COVID, pretty much in every month except November. That's right. Do you kind of have a quantitative kind of comment around the percentage of actual lost trading days? Or just to get a feel for, I guess, the lost trading days versus appointment cancellations and things that were kind of out of your control as well? Hi, Melissa. Phil here. We don't typically calculate the lost days trading. It really comes down to sessions to dentists and ultimately measured by the attendance of patients. I would say that it's been complicated and somewhat murky. We certainly call out the various percentages that we saw the business impacted. We're enthused by a positive November. As I just said, the green shoots we're seeing in February is giving me increasing confidence that we too will emerge in the normal fashion that we always have. Excellent. Thank you both. Thanks, Melissa. Thank you. The next question is from Tanushree Jain from Petra Capital. Please go ahead. Hi, Phil and Matthew. How are you going? Very good. Hi, Tanushree. Thanks for taking my questions. Just a couple from me. In terms of, Phil, the metrics that you're seeing in terms of new centers, you mentioned a few of them have opened over the 400+ appointment target. I'm more interested in getting some feel around the six-month target of +2,000 appointments. Can you perhaps talk about the FY 2021 cohort and how they have performed versus this target? Yeah, I would like to be able to give you a full dissertation without any impact of COVID, but I can tell you that I'm very pleased, hence the continued rate of opening of new centers. That this increase in performance prior to opening and the subsequent follow-up work that we're doing in the marketing team and operations team to continue bringing in new patients during that first six months is giving us good confidence that in a non-affected COVID period, these centers really would be, as they say, shooting the lights out. I'm pleased with the FY 2021 cohort's performance and delighted with the potential that we're seeing in these pre-booked appointments for FY 2022. Right. Just on the, Matt, probably more a question for you. Just on the expense side, I did see quite a bit of a jump in the marketing expenses, this half. Was there any particular new campaign driver for that, and how should we look at this going forward? Oh, look, I can take that, Tanushree. We're certainly not shying away from sensible investment in communicating with patients and dentists. Remember as a B2B with dentists and a B2C with patients, we think now is actually the time to be educating people on oral health, educating them on the safety that Pacific Smiles has got. I won't say we're doubling down, but we're consciously making sure that we don't shy away from great communications and emphasizing the positives of attending Pacific Smiles. All right. Just one last question on the HBF new centers. We're at five at the moment. Would you be able to give us some sense of the plans in new openings for this half and also for moving forward in terms of HBF? Yeah. The dialogue is ongoing with HBF as the centers open. We've certainly got several sites pending and in construction for this half. The reality is, Western Australia is still locked down to those of us in the east, and we'll be delighted to get across there and look at what's next. But we're in continuous dialogue with the team at HBF and very pleased with the trajectory of things. I think John Van Der Wielen, the Chief Executive, and his Chair have certainly espoused the desire to be not less than 15. I think some of the recent acquisitions into other healthcare areas demonstrate the commitment to servicing their members, and we're obviously an integral part of that. Right. I guess what I'm trying to understand is if COVID kind of impacted the rollout plans, especially with, you know, when it comes to Western Australia in terms of what you were planning to open? Oh, not in a negative way. I would suggest that it's difficult without being able to be in the state, but the centers on the ground are performing well, and we take site selections for HBF very seriously. No, I wouldn't say that we're being persuaded or slowed up on our plans at this point. Right. Would you be ready to give some color on how the economics are tracking for these HBF centers? I think in the fullness of time and in partnership with HBF and at their state of readiness, we'll be able to share more. I think as this full year develops and as we partner and look into the business as to whether we need to give more disclosure on our component of things, we'll certainly do so at the right time. It's not a matter of trying to be complicated with the market, but we do have to respect our partners' right to commercial confidence, and we're just walking very gently with them. Right. Great. Thanks so much. Thanks. Tanushree Thank you. The next question comes from Michael Gerges from Ord Minnett. Please go ahead. Thank you. Good morning, Phil. Good morning, Matt. Good day, Mike. Good day. Just a few questions, if I may. Just, first one perhaps on the cost line. Admin costs in absolute terms have obviously gone up quite a bit, and as you say, Matt, earlier, it was investment in IT and the like. Is there furthermore investment to come on that line, or should we take that now as a sustainable sort of annualized run rate? Oh, look, it's largely sustainable now. This really isn't sort of headcount, Mike. As we've spoken about in the past, there's investment in technology that's allowing us to scale. Whether that's upgraded licenses, data warehouse, the ability to provide insight into the growth trajectory of the business and allow us to be more on foot with our patients through Marketing Cloud and so forth is important as we continue to scale. We're towards the end of that trajectory now. I would see this as a stabilizing spend. Right. Okay. All the infrastructure that you require essentially is all there now? Just about, yeah. Yeah. Okay. That's fine. Just in terms of, you know, either to Phil or Matt, what you're sort of seeing in perhaps Queensland, given as there's about, you know, 23 odd centers there and obviously, you know, Vic and New South Wales are a little bit further along in the recovery. Is Queensland sort of ticking along on an underlying basis or what does that sort of look like? Just so we can get a sense as to, you know, perhaps what the third quarter may look like up there. Yeah, absolutely. I'm delighted as the rest of the management team is with the performance of Queensland. We've got a great team up there. We have some exceptional dentists that have been with us for a long period of time, and we continue to grow new centers up there. Our confidence in Queensland remains strong, and as it does in Victoria, Canberra, and New South Wales. I would suggest that we're on track and doing good things in the north. Great. Thank you. Just a final one, just on employee costs. They've come down about AUD 2 million relative to the second half of 2021. Would it be fair to assume that a large part of that sort of reduction has just been sort of staff, a reduction of casual workers and so on during the lockdowns. Would that be? Yeah. A reasonable assumption? Yeah, that's an unfortunate by-product of managing cost with reduced top line based on patient attendance. Yeah, you're spot on, Michael. As much as we're loathe to reduce the numbers working, we're compelled to do so based on demand and volume. The workforce has been very flexible. Our retention has remained high in long-term employees. We stand on the balls of our feet to rebound fully as demand comes back, as I just demonstrated further and further. Great. Thanks very much. [crosstalk] Thanks, Michael. Thanks, Michael. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from James Bales from Morgan Stanley. Please go ahead. Oh, hi, guys. I just wanted to follow up on some of the HBF performance. Have you guys set out how profitability is tracking this year? Can you give us a sense maybe of how you expect that to ramp into 2023? Yeah. We haven't issued to the market insights as to profitability. I think there's been some fairly accurate assumptions as to how the structure of the MSA financially works. If I was to give you the best steer that I can, given various constraints, we're very pleased with the development of the centers, confident that the trajectory is not dissimilar from a normal Pacific Smiles. Obviously further buoyed by the fact that these are HBF Dental branded centers, and excellent locations inside shopping centers with the full support of HBF. We're sensibly building into that market, and there's a continued capacity from us to add centers and support from HBF to do so. The dentists that practice with us are delighted, and we continue to build numbers of attendance of patients and dentists. It's going well, James. Okay. That's good to hear. I guess the flip side of the HBF relationship is understanding their market share trends ex-WA and whether you guys have crystallized any sort of deeper agreements in leveraging some of those customers into your centers. I can't speak specifically to HBF's members' numbers, but I can, you know, share that they are a dynamic and an enthusiastic brand to move into the East. We do have a preferred provider agreement for servicing their members in the East, and we're delighted to do so. We look to be becoming closer and closer partners with them as they build both members and scale with acquisitions and membership drives over here in the East. It's a really exciting time. Okay. Got it. Thanks, guys. Thanks, James. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Operator, I'd suggest if there's no further questions that we thank everyone for their attendance today, and we look forward to follow-up meetings in the days. Thank you very much. Thank you, ladies and gentlemen. That does conclude our conference for today. Thank you for participating. You may now disconnect.