Anagenics Cuts Costs Sharply, Narrows Cash Outflow in Q2 FY25
Anagenics reports a marked reduction in operating cash outflow and expenses following a strategic restructuring, setting the stage for improved financial stability in the coming quarter.
- Operating cash outflow reduced to $0.3m in Q2 FY25 from $0.9m in Q1 FY25
- Significant cost cuts: advertising down 45%, staff/director costs down 42%, admin costs down 66%
- Payments to related parties decreased to $65k in Q2 FY25 from $116k in Q1 FY25
- Restructuring benefits expected to fully materialize in Q3 FY25
- Core BLC Cosmetics sales remain stable despite divestment of Face Medi
Restructuring Drives Financial Improvement
Anagenics Limited (ASX: AN1) has delivered a promising update for the quarter ended 31 December 2024, revealing a substantial reduction in its operating cash outflow and overall cost base. The company’s latest activity report highlights the tangible impact of its recent restructuring initiatives, which began in late October 2024.
Net operating cash flow improved significantly, with an outflow of $0.3 million recorded in Q2 FY25, compared to a $0.9 million outflow in the previous quarter. This improvement reflects the company’s focused efforts to reset its monthly cost structure amid a reduced revenue base following the divestment of its Face Medi business.
Sharp Cost Reductions Across Key Areas
The restructuring has driven notable cost savings across multiple expense categories. Advertising and marketing expenses were slashed by 45% to $124,000, down from $224,000 in Q1 FY25. Staff and director costs fell by 42% to $409,000, while administrative and corporate expenses plummeted by 66% to $156,000. These cuts underscore management’s commitment to streamlining operations and preserving cash.
Despite these changes, the core BLC Cosmetics business, a wholly owned subsidiary focused on distributing Australian and international cosmetic and wellness brands, has maintained steady sales. This stability suggests that the restructuring has not disrupted the company’s primary revenue streams.
Related Party Payments and Market Reinstatement
Payments to related parties and their associates, including wages and fees paid to former directors, decreased to $65,000 in Q2 FY25 from $116,000 in Q1 FY25. This reduction aligns with the company’s broader cost containment strategy.
Anagenics continues to work towards reinstating its securities to quotation on the ASX, with the process expected to conclude by the end of February 2025. This reinstatement is a critical step for restoring investor confidence and market liquidity.
Looking Ahead
The company anticipates that the full benefits of its restructuring efforts will be realised in the upcoming quarter, potentially positioning Anagenics for a stronger financial footing. However, the impact of the Face Medi divestment on future revenue streams remains a variable to watch closely.
Overall, Anagenics’ latest report signals a disciplined approach to cost management and operational efficiency, which could pave the way for renewed growth and shareholder value creation.
Bottom Line?
Anagenics’ restructuring gains momentum, but the next quarter will be crucial to confirm sustained financial recovery.
Questions in the middle?
- How will the divestment of Face Medi affect Anagenics’ revenue trajectory beyond Q3 FY25?
- What specific steps remain for the company to complete its ASX securities reinstatement?
- Can the core BLC Cosmetics business drive growth to offset reduced revenues from divestments?
