Anagenics Slashes Costs and Narrows Cash Outflow Ahead of FY25 Profit Push
Anagenics Limited reports a marked reduction in cash outflows and operating costs following a strategic restructuring, with full benefits expected in the latter half of FY2025. Despite divesting Face Medi, core cosmetics sales remain steady.
- Net operating cash outflow reduced to $0.3m in 2Q25 from $0.9m in 1Q25
- Advertising, staff, and corporate costs cut by 45%, 42%, and 66% respectively
- Restructuring includes headcount reduction from 20 to 9 and suspension of director fees
- Core BLC Cosmetics sales remain stable despite divestment of Face Medi
- Company expects profitability in second half of FY2025 and plans capital raising
Restructuring Drives Cash Flow Improvement
Anagenics Limited (ASX:AN1) has reported a significant improvement in its cash flow position for the quarter ended 31 December 2024, reflecting the early impact of a comprehensive business restructuring. The company’s net operating cash outflow narrowed to $0.3 million in 2Q25, down from $0.9 million in the previous quarter, signaling a positive shift in financial discipline amid a challenging revenue environment.
This progress was achieved despite a reduced revenue base following the divestment of its Face Medi business. The core BLC Cosmetics segment, however, maintained steady sales, underscoring the resilience of Anagenics’ flagship operations.
Substantial Cost Reductions Across Key Areas
Cost containment was the cornerstone of the quarter’s performance. Advertising and marketing expenses were slashed by 45% to $124,000, staff and director costs fell by 42% to $409,000, and administration and corporate expenses plunged 66% to $156,000. These reductions stem from a strategic overhaul initiated in late October 2024, which included a headcount reduction from 20 to 9 employees and suspension of director fees.
Additional measures involved replacing IT and ERP systems with more cost-effective providers, exiting third-party logistics arrangements to bring operations in-house, and vacating office premises in Sydney’s Clarence Street. Collectively, these initiatives are expected to yield annualised cost savings exceeding $2.5 million.
Outlook and Funding Strategy
While the full benefits of the restructuring are anticipated to materialize in the second half of FY2025, Anagenics is actively managing its liquidity position. The company ended the quarter with $471,000 in cash and an additional $78,000 in unused financing facilities, providing approximately 1.58 quarters of funding at current operating cash outflow rates.
To extend its runway, Anagenics has access to an unsecured $250,000 funding facility from Hancock and Gore Ltd., which, once secured, would increase available funding to 2.3 quarters. In addition, the company is engaged in ongoing discussions with multiple parties to raise additional capital, expressing confidence in a successful outcome.
Efforts to reinstate the company’s securities to quotation are progressing, with completion expected by the end of February 2025, following a voluntary suspension period.
Strategic Reset Positions Anagenics for Recovery
The restructuring represents a decisive pivot towards profitability, with management emphasizing a leaner cost structure and a focus on core competencies in health, beauty, and wellness products. The stability of BLC Cosmetics sales amid these changes provides a foundation for rebuilding shareholder value.
Investors will be watching closely as the company transitions into the next phase of its turnaround, balancing operational discipline with growth ambitions in a competitive market.
Bottom Line?
Anagenics’ restructuring lays the groundwork for a return to profitability, but execution and capital raising will be critical in the coming quarters.
Questions in the middle?
- Will Anagenics successfully complete its planned capital raising and secure additional funding?
- How will the divestment of Face Medi impact long-term revenue growth and product portfolio?
- Can the company sustain stable sales in BLC Cosmetics while scaling back costs further?
