Thank you for standing by, and welcome to the Vita Group Limited FY 2022 half year results presentation. All participants are in listen only mode. There will be a presentation followed by a question -and- answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Peter Connors, Chief Executive Officer. Please go ahead. Good morning, everyone, and thank you for joining us today for Vita Group's half year results announcement. I'm Peter Connors, CEO of Vita Group, and joining me today is Andrew Ryan, our CFO. Before we commence, I'd like to respectfully acknowledge that we're joining you today from the lands of the Turrbal and Jagera peoples. On behalf of Vita Group, I would like to acknowledge and pay my respects to the traditional custodians of the country throughout Australia and recognize their continued connection to land, waters and culture. We pay our respects to their elders, past, present, and emerging. This morning I will make some introductory remarks and take you through an overview of Vita Group's results for the half year to December 2021. Andrew will then step you through the numbers in more detail. Before I talk more about our focus on investing in Artisan's growth, Andrew and I will then be happy to take any questions. 2021 was an extraordinary and transformational period for Vita. While the group continued to navigate COVID-19 impacts, Vita also finalized the divestment and transition of its retail ICT business, including Sprout, to Telstra. The divestment involved a significant amount of work and focus by management and the Vita team to deliver an outcome that was intended to be in the best interest of all stakeholders, including negotiation, due diligence, change and transition management, and the establishment of new support IT infrastructure for the ongoing business. Let's turn to the financial headlines starting on slide two with continuing operations for H1 FY 2022. Total revenues decreased 16% on prior year to AUD 12.6 million, in line with guidance provided in November 2021. Underlying EBITDA, excluding the impact of AASB 16 leases and including the full allocation of corporate overheads and a one-off gain on contingent consideration was half a million dollars, down 31%, a loss of AUD 4.2 million. Net profit after tax decreased 26%, a loss of AUD 3.4 million on a recorded basis. Profitability was adversely affected by COVID-19. In particular, government-mandated lockdowns forced extended closures of many of our clinics in New South Wales, Victoria, and the ACT, resulting in a significant number of trading days lost. Turning to discontinued operations for the period of 1 July to 12 November 2021. Revenue was AUD 178.9 million and net profit after tax was AUD 1.7 million, which included a preliminary gain on sale of the ICT business of AUD 2.6 million. Prior to the divestment, the ICT business was also impacted by COVID-19. Together, group revenues for the period, that is ICT revenues to 12 November and Artisan revenue for the full six months, were AUD 191.5 million, and net profit after tax was a loss of AUD 1.7 million. As you can see on slide three, Vita ended the period with net cash of AUD 43.6 million and low levels of debt, which provides us with flexibility to invest in Artisan's growth. As I mentioned, Vita finalized the divestment and transition of its ICT business to Telstra in November 2021. Vita received settlement funds of AUD 107.4 million, being AUD 110 million initial cash consideration, less net working capital, net debt adjustments, and including tax exit consideration based on a locked box mechanism calculated at 30 September 2021. As announced on 12 November 2021, the first tranche of two tranches of a special dividend being 39 cents per share, equating to AUD 64.6 million, was paid to eligible shareholders on 26 November 2021. The board has elected to utilize Vita's current position to invest in the growth of the Artisan business and has determined to not pay an interim dividend for half one FY 2022. However, the final tranche of the special dividend relating to the ICT divestment, approximately AUD 0.03-AUD 0.06 per share, equating to AUD 5 million-AUD 10 million, is expected to be distributed in H2 FY 2022, subject to finalization of exit costs and post-completion adjustments. For a more detailed review of the financial results, I'll hand over to Andrew. Thanks, Pete, and good morning, everyone. Let's go to the continuing operations income statement on slide four. Our continuing operations delivered revenues of AUD 12.6 million, in line with guidance announced to the market in November of last year. A 16% decline on prior year and on a like-for-like basis, down 22%, primarily as a result of COVID-19 impacts. Many clinics, including some of Artisan's largest across New South Wales, Victoria, and the ACT, were required to close from July through to mid-October due to government-mandated lockdowns. Artisan lost over 500 or approximately 21% of total trading days throughout that period. Additionally, our teams were required to comply with various state-based vaccination requirements and to keep our teams in clinic locations safe, we introduced a client and visitor vaccination policy. Artisan also experienced impacts from higher than expected loss of team members in Queensland. Gross margins improved to 74.5%, up 1.7 basis points due to the mix of products and treatments delivered. This partially offset a decline in gross profit from restricted trading, which was AUD 9.4 million, down 14% on prior year, primarily due to the COVID-19 impacts I outlined earlier. EBITDA, excluding the impact of AASB 16 leases and including the full allocation of corporate overheads and a one-off gain on contingent consideration, decreased to a loss of AUD 3.7 million. After excluding the gain on contingent consideration in the current year and the JobKeeper receipts from the prior year, underlying EBITDA was a loss of AUD 4.2 million, down 31% on prior year. Excluding the allocation of corporate overheads, operational clinic EBITDA was AUD 1.2 million, also in line with guidance provided to the market in November of last year. Underlying EBIT after excluding the gain on contingent consideration in the current year and the JobKeeper receipts from the prior year was down 14% to a loss of AUD 5.6 million and NPAT was a loss of AUD 3.4 million. Moving now to slide five and the income statement for our discontinued operations. Prior to transaction completion, the ICT division was impacted by COVID-19 with store closures from mandated lockdowns, reduced foot traffic, social distancing capacity constraints, and an increase in service-related transactions. Revenue for the period up to 12th November 2021 was AUD 178.9 million and net profit after tax was AUD 1.7 million. Underlying net profit after tax was a loss of AUD 0.9 million after excluding the preliminary gain on sale of ICT of AUD 2.6 million, which remains subject to finalization of exit costs and post-completion adjustments. Now on to the balance sheet on slide six. Following the divestment of the ICT business and a material change in assets and liabilities, the group's balance sheet remains strong. The group ended the period with gross cash of AUD 45.3 million, including cash retained to finalize the ICT divestment exit costs from the distribution of the final tranche of the special dividend expected to be paid in H2 of FY 2022 of approximately AUD 0.03-AUD 0.06 per share and to underpin the investment in the growth of Artisan. Current assets ended the period at AUD 6.7 million, consisting of a security term deposit of AUD 2 million, inventory of AUD 1.3 million, and prepayments and other assets of AUD 3.4 million. Non-current assets consist of plant and equipment, including clinic fit-outs and equipment technologies of AUD 8.5 million, right-of-use assets of AUD 6.9 million, intangible assets of AUD 24.9 million, and deferred tax assets of AUD 5 million. Liabilities of the group are made up of trade and other payables of AUD 5.9 million, borrowings of AUD 1.7 million, lease liabilities of AUD 12 million, provisions of AUD 2.9 million, and other liabilities of AUD 4.1 million. The group ended the period with net cash of AUD 43.6 million. I'll finish up on the cash flow statement on slide seven before handing back to Pete. Starting with continuing operations, operating cash outflows after tax were AUD 4.4 million, primarily reflecting the trading impacts from COVID-19 described earlier. Investing cash flows included AUD 1 million of capital expenditure directed towards the purchase of aesthetic equipment and AUD 2 million placed as a security term deposit. Net financing cash outflows from continuing operations was AUD 69.8 million, reflecting lease payments of AUD 1.6 million, net drawdowns of AUD 0.3 million, and dividends paid of AUD 68.6 million, including the first tranche of the fully franked special dividend of AUD 64.6 million and the final FY 2021 fully franked dividend of AUD 4 million. Moving to discontinued operations, operating cash flows after tax were AUD 15.9 million, reflecting pre-completion COVID-19 impact of trading conditions described earlier and including movements within the lockbox adjustment period. It's important to note that increases in cash during the lockbox period corresponded with the movement in net assets, including payables, all of which were transferred to Telstra on completion. Investing cash flows included AUD 0.4 million of capital expenditure directed towards the purchase of ICT equipment and net ICT divestment inflow of AUD 79.9 million. Financing cash flows reflected lease payments of AUD 5.3 million and debt repayments, including the full repayment of all ICT debt of AUD 5.7 million. I'll now hand back to Pete to take you through our focus on Artisan going forward. Thanks, Andrew. Turning to slide eight. Given that we've just transitioned out of the ICT business and are now solely focused on Artisan, I thought it would be useful to briefly recap Artisan's journey thus far, which as illustrated in this calendar year timeline, is early in its life cycle. To summarize, we realized our ambition to extend our existing competencies into the skin health and wellness industry with the acquisition of Clear Complexions in Canberra and Sydney in November 2017. In May of 2018, the Artisan Cosmetic and Rejuvenation Clinic was acquired in Fortitude Valley, Brisbane. Shortly thereafter, the national Artisan brand was launched, including our brand promise, identity, and premium positioning. During 2018 and 2019, business foundations were built and the number of clinics was expanded to 16 through a combination of Artisan greenfield openings and M&A activity. With initial scale achieved, focus during 2020 was directed to refining and enhancing operating mechanisms and beginning the process of rebranding and upgrading fit-outs of non-branded clinics while we continued our footprint expansion. As with many industry sectors, unforeseen disruption occurred due to COVID-19. Additionally for Vita, in February 2021, Telstra announced its intention to transition the Telstra brand of retail store network to a full corporate ownership model. As mentioned, this resulted in significant management and team effort being directed towards the ICT business divestment. This brings us to today and to slide nine. With the disruption of the ICT transition largely behind us, Vita's recast management team will now focus its time solely on Artisan. Vita is well positioned to execute on our priority to organically grow Artisan. Additionally, we will optimize and continue to rebrand our clinic footprint and expand through greenfield openings and prudent acquisitions. To do so, Vita will leverage its strengths, including Artisan's premium positioning and brand promise, "Master the artistry of you," our disciplined processes and team culture, both of which draw on our clinical expertise and client-centric consulting skills, our expertise and capability in operationalizing and scaling retail businesses, our investments in advanced modality technologies within bespoke and premium destination clinics, and our developed intellectual property, including our proprietary software, cosmedcloud. Additionally, as outlined on slide 10, being a premium 100% owned business model, Vita enjoys direct engagement and relationships with our team members. We see this as a significant strength as it enables us to develop team member capability and experiences aligning to Vita's ambition of being an employer of choice within the skin health and wellness industry, consistently deliver premium client experience focused on high quality and safe outcomes, and to efficiently execute business development and clinical governance programs in a highly disciplined and effective manner. Turning to slide 11. As mentioned, our priority is to grow Artisan organically and sustainably, leveraging our strengths to enhance Artisan's brand awareness, offering, and degree of standardization, client value creation in particular through holistic and individualized multi-modality treatment plans and exceptional standards of service, team member experiences with emphasis on capability, skills expansion, and career development, risk and clinical governance frameworks, leadership development and executional frameworks, and business tools and efficiency processes and programs. Moving to slide 12 and looking ahead. The Omicron variant of COVID-19 has reintroduced some uncertainty and headwinds, particularly with client and team isolation requirements affecting trade. However, the medium and long-term growth prospects of the skin health and wellness industry is strong, with increasing awareness and demand for an evolving range of treatments and services. The skin health and wellness industry is also fragmented with many market participants, which is likely to present consolidation opportunities, particularly as we anticipate an increase in industry regulation. These factors, combined with Vita's strengths and the execution of operational priorities, represent significant growth potential. Before I finish up today, I would like to reiterate the last 6-12 months has been an extraordinary period in Vita's history, and I would like to thank everyone involved for their professionalism and efforts and convey my very best wishes to both the old Vita ICT team and to Telstra in their future endeavors. With a great team, solid business foundations in place, and the ability to leverage our investments and strengths, I'm excited to lead the business, and I'm confident that we are well positioned to achieve our growth ambitions. I'd also like to express my thanks to the Vita and Artisan teams who have demonstrated resilience and commitment while maintaining their focus throughout a challenging period on delivering exceptional client outcomes. Andrew and I will now be happy to take any questions. Thank you. Your first question comes from Charlie Kingston with CSK Capital. Please go ahead. Hey, Charlie. Yeah, guys. Can you hear me? Yeah. Very good, thank you. Just first question. I've got a few, but first question, just can you comment on the overheads expense? Obviously, it's a legacy now that you've gotten rid of your biggest division, but I think it was sort of running at AUD 8.5 million. What's the current run rate and when do you expect, you know, or what do you expect the target to be now that it's just Artisan, please? Thanks, Charlie. Appreciate your question. I might start that, the answer to that, and then hand over to Andrew. I'll give it a bit of context first. We've kept a subset of Vita's great team and capability as an investment in growth in our business model, which I've just gone through. There are some legacy transition costs relating to the ICT divestment in our numbers. As we finalize the divestment, we of course will look for efficiencies, but without compromising any growth programs. You know, as we said, investment, like any investment, we will continue to monitor it and look for an appropriate return on that investment. Andrew, would you like to add to that? Thanks for the question, Charlie. I guess just reiterating what Pete says, overheads at this period in time are an investment that we're making in the growth of the business. We do have some legacy ICT costs to deal with and to wash through. We will be constantly reviewing the level of overheads and looking for efficiencies. Having said that, we're not gonna compromise our growth plans. As far as where we think it will settle, we're not reporting on that today. I can assure you that it is something that's kinda front of mind for us and something that we will monitor closely and run as efficiently as possible. Okay. You know, it's obviously gonna come down going forward. You know, can you give some sort of a rough estimate? You know, I think your revenue is probably gonna come out at AUD 30 million or so. You know, AUD 8 million is clearly not sustainable, but half of that, is that something fair to think going forward once you have invested accordingly? Look, I wouldn't expect it to halve. The AUD 8.5 million that you saw in the pro forma was an allocation, and it was an allocation of previously unallocated corporate overheads. It was just a portion of a much larger Vita Group corporate overhead. It was a reasonable estimate of last year's unallocated corporate overheads. As I said, we will look to run it as lean and efficiently as possible, but we do have the strategic growth plans and programs of work in place that we need to support. For us, for now, it's all about supporting those growth aspirations and running it as efficiently as possible. Yeah. Thank you. Just on the growth ambitions, I think historically you've sort of said 70-90 clinics was the target. I presume it's not that at the moment, but do you have a longer-term target? Obviously there are plenty of bigger players out there with a lot more funding than what you guys have got. You know, with how is Artisan gonna compete with those larger players? Would you look to partner with them? You know, you've spoken plenty about the potential for consolidation and the existing consolidation occurring. Maybe if you could just comment on what your growth ambitions are and how you do or will look to compete with some of those larger players, please. I might take that. It's a two-part question. I'll talk about the growth ambitions and I'm still forming a view. I'm pretty early on in this role. I still think that 60-70 clinics is possible. I think I mentioned at the AGM that in the short term you may see us merge a few clinics with a slight reduction in the total number of clinics. We've also identified that, you know, clients will be prepared to travel a little bit more in certain locations. It depends on density. You may even see some of our clinics get slightly larger because of their relationships with our team and the services they're getting, which obviously has benefits in terms of overheads, CapEx and spread of income. You may see our rooms go up from a range of around four to seven or eight to the top end of that range being nine or 10 in some locations. Over the next year or so, I think I said at AGM we'd be around 2-4 clinics in FY 2023, but I do see the possibility of accelerating beyond there. As to the second part of the question, it's not something that's on our radar at the moment. We're very focused on growing the Artisan business both organically and via the footprint expansion that we've described today. It's not currently on our radar. Okay. Just last one from me, and I'll jump back in the queue. The franking credit balance, you know, we've spoken about that. It's obviously a significant asset for shareholders. You know, it's almost your entire market capitalization at the moment. Is there a focus on somehow returning that to shareholders in the near term? Or, you know, is that just gonna remain stranded? Any comments on that would be appreciated. Thank you. I might let Andrew take that one. Yeah. Thanks, Pete. Well, I guess firstly, we were really pleased to be able to distribute around AUD 30 million of franking credits as part of the first tranche of the special dividend during the half. As we've announced today, we expect to distribute more via the second tranche in the second half of this financial year. We're really pleased to be able to do that as part of the ICT divestment. As for going forward, as we've outlined today, our focus really is on building the business and returning the groups to profitability as quickly as we can. That's really our focus for now. As we've outlined, organically grow Artisan, optimize the Artisan footprint, expand through greenfield clinics and expand through prudent acquisitions. 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. Your next question comes from Lauren De Zilva with Ryder Capital. Please go ahead. Hi, Lauren. Hi, Lauren. Hey, Andrew. Hey, Pete. Just a quick question around the second tranche of dividends. Will that be paid from the AUD 45 million cash currently held on balance sheet, or are you waiting on any sort of further payments from Telstra? Yeah, Andrew, can you take that one? Yeah. No, that'll come from there. There are still some adjustments to finalize, but that shouldn't materially change the number. The second tranche of the final dividend will come from existing cash, yes. What are the sort of swing factors between AUD 0.03 and AUD 0.06? We're not disclosing that level of detail today, Lauren. All right. Any sort of detail on timing you can give? I mean, it feels like it's probably taking a little bit longer than we thought. Yeah. Well, the share sale agreement with Telstra was subject to a 90-business day adjustment period. We need to wait for that to complete. We still have a transition arrangement, transition services arrangement in place with Telstra as well, until June 30. There's a few other exit costs that we need to finalize and resolve. As we've said, we expect it to be in the second half of this financial year. Right. As in the payment in the second half, or it'll sort of be finalized post the transition services and then paid? We're hopeful for payment to be in the second half. Yeah. Okay. All right. Thanks, guys. Your next question comes from Shane Bannan with PAC Partners. Please go ahead. Hi, Shane. Good morning, guys. Just a couple quick questions. I mean, you called out the issue you had with staffing in Queensland. Could you dimension that as an issue and whether it's been fixed, A? Secondly, how do you mitigate these sorts of problems arising in the future? Right. Thanks. I might take that, Shane. Thanks for the question. We don't typically share details of turnover, and it's very difficult to quantify the 'cause there's so many factors involved at a clinic level. Rest assured though, as we obviously take measures to mitigate, and that's all in the mix of making it very hard to quantify. People leave for various reasons. Many of those personal, like any business. That always represents an opportunity to take learnings, adjust programs if indeed you need to, and you'd expect us to be doing that. As we said earlier, we see that our 100% owned business model is a competitive advantage. That direct relationship with team members has the benefits that I've outlined earlier, and it really will help us, you know, through our priorities and our program of work. We think that program of work will actually enhance our employee value proposition if that goes to the second part of your question about what we intend to do. At the end of the day, the culture that we have and that I wanna lead is where people love what they do. They love the environment that they're in. They feel really a sense of purpose and aligned to our purpose, our brand promise, and what we're doing as a business. They see potential to achieve their own personal and career goals and, you know, including career progression with Artisan. If we can get that alignment and that team culture, then I think we will have gone a long way to mitigating any key person risk, for instance. We do understand, though, Shane, that attracting, retaining, and developing our team is critical to the business' success. We're very focused on it. Our ambition, as I said earlier, is to be an industry employer of choice. All right. Thank you. I understand. The industry itself or the broader industry, 'cause I appreciate you don't delve into certain areas, has obviously come under increasing scrutiny more recently. I'd just like to understand your reading of that dynamic, going forward and the implications for a business such as yourselves. Yeah, that's a great question. We do anticipate, I think we mentioned, greater regulation requiring business and practitioners operating in the cosmetic industry to do so within appropriate risk frameworks in place. Maybe what you're referring to as an example, the Medical Board of Australia is currently conducting a review into cosmetic surgery. As part of that review, Ahpra is working with the Medical Board to look at patient safety issues within the industry, including how to strengthen risk-based regulation of practitioners in the industry. The Medical Board has also indicated their recommendations may be relevant for the cosmetic industry more widely. As I mentioned earlier in our, when we went through the PAC, we have terrific risk and governance frameworks in place, and we wanna continue enhancing them. We actually see that as a significant enhancement to our employee value proposition. Right. Thanks, Peter. The last question I had for you is, you called out the full ownership model that you're pursuing, and I can understand why. I just wonder, obviously a lot of your peers that use the term loosely have gone to a franchise model as an addendum to the ownership model. Do you see yourself doing that at all, or are you just going to hold the 100% owned? We're 100%. Sorry to keep using 100%. 100% focused on our business model. Like we've gone through, we see that direct engagement with our team having significant advantages. Particularly in, as I said before, the development of the team and the experience that they have with us, we have that direct relationship. We can be involved directly with each and every individual. The consistent delivery of client experiences focused on that, as we said, high quality and safe outcomes. Then the efficiency and speed of executing business development and clinical governance programs in a very disciplined and effective manner. Overlay all that with a great team culture and we're pretty focused on our model at the moment. Great. Thanks very much. Your next question comes from Charlie Kingston with CSK Capital. Please go ahead. Hey, Charlie. Yeah. Just to follow up on some of those questions, and then you speak of returning to profitability and, you know, being that a 100% company-owned model. Does that, you know, so positioning yourself as a premium operator, do you have any sort of targets in terms of your margins on that basis? Because you are a 100% company-owned, are you gonna be able to? Are you targeting higher margins than some of your peers? Are you gonna be able to charge more? Can you just talk a bit about the Artisan model and how that premium positioning actually, you know, impacts on your margins? My understanding, I'm no expert on the beauty model, but it sounds like a lot of offerings are somewhat commoditized. Yeah, if you could just talk to that, please. Well, I'm still forming a view on everything. You know, this industry is growing. Having said that, there are a lot of entrants, and there is some price pressure out there. When you get a lot of entrants in market participants, you tend to get that. Keep in mind what we just spoke about in regards to regulation. I kinda see upside in all of our modalities. One of the big trends, early days, is the use of combination therapies and multimodality in treatment plans. Whilst there is some pricing pressure, I think we have levers to pull, certainly in volume and efficiencies, and what that mix ends up being through those combined therapies is hard to pinpoint right now. Certainly if there is some compression over the periods ahead, I think we can well and truly offset that through our volumes and efficiency programs. Do you have any specific sort of either dollar targets at a clinic level or gross margin targets? What's the sort of weighting of the Artisan model? You know, some of your peers disclose where most of their revenue is coming from. Do you have any clarity on that, please? At a high level, are you talking about mix of treatments? Yeah, mix of treatments and, you know, how that. About 50-55% of our business is currently injectables, which is, you know, coming from your muscle relaxants and your volumizing types of products and also biostimulators, which is a big growth area. About 25-30% from technology, which is mainly around your skin rejuvenation and resurfacing type technologies, skin tightening. We include in that body contouring, which is an emerging category, whether it's fat reduction, cellulite treatments, muscle stimulation, and that is another growth category. Probably 15%-20% at the moment is from skincare and products and mainly home care. Like I said before, Charlie, we kinda see upside. I actually not sure what our best mix is gonna look like in a few years' time. Like I said, we see upside in combination therapies and treatment plans. Have you got a margin target at a clinic level? No. Well, we're not going into that level of detail today. Okay. Thank you. There are no further questions at this time. I'll now hand back to Mr. Connors for closing remarks. I'll just my first go at this, guys, so I appreciate you joining us. I'd like to thank you for being on the call. Andrew and I will obviously look forward to sharing our progress in our full year results announcements later in the year. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.