Anagenics Limited has reported its first-ever profit, marking a significant turnaround driven by cost cuts, improved margins, and a key royalty agreement.
- Maiden profit of $127k in 1H FY26 after prior loss
- 44% reduction in operating expenses and 280bps margin improvement
- Operating cash outflow halved to $0.6m
- $2.25m equity raise to fund growth and debt reduction
- Key royalty deal with York Street Brands generating $500k in 1H FY26
A Turning Point for Anagenics
Anagenics Limited (ASX:AN1) has delivered a milestone result for the six months ending December 2025, posting its maiden profit of $127,000. This marks a sharp reversal from a $464,000 loss in the same period last year, underscoring the impact of the company’s recent strategic restructuring.
The company retained 90% of its revenue compared to the prior corresponding period, but the real story lies in its improved operational efficiency. Gross profit margins expanded by 280 basis points, while operating expenses were slashed by 44%, reflecting a leaner cost structure following the disposal of non-core assets like the loss-making Face MediGroup.
Cash Flow and Balance Sheet Improvements
Cash flow dynamics also improved materially. Operating cash outflow was reduced to $0.6 million, half the outflow recorded in 1H FY25. This improvement was partly driven by resolving outstanding creditor balances, which fell by 43%, contributing to a 20% reduction in overall liabilities. With assets remaining stable, net assets rose by 24%, strengthening the company’s financial position.
Further cost savings are expected in the second half of FY26, including approximately $100,000 from subleasing the company’s Sydney office at 55 Clarence Street. These savings, combined with the $2.5 million annualised cost reductions from divestments, position Anagenics for sustained operational leverage.
Capital Raise and Growth Prospects
To fuel its next phase of growth, Anagenics successfully completed a $2.25 million two-tranche equity raise. The capital will support brand expansion, working capital needs, debt retirement, and costs associated with the placement. This fresh funding comes at a pivotal time as the company seeks to capitalise on its strengthened foundation.
Notably, Anagenics inked a significant agreement with Sydney-based York Street Brands, granting access to its proprietary hair regrowth technology and products. This deal is currently runrating $9 million and is expected to generate a minimum of $4.4 million in royalties over the next decade. In 1H FY26 alone, the company recorded $500,000 in royalty income from this partnership, highlighting a promising revenue stream.
Looking Ahead
Management and the board remain focused on consolidating these gains to entrench long-term profitability. While the maiden profit and improved cash flows are encouraging, the sustainability of growth hinges on execution of expansion plans and the ongoing performance of key partnerships.
Bottom Line?
Anagenics’ maiden profit and strategic moves set the stage for a critical growth phase, but investors will watch closely for sustained momentum.
Questions in the middle?
- Can Anagenics sustain and grow royalty income from the York Street Brands deal?
- How will the company deploy the $2.25 million capital raise to maximise returns?
- When will operating cash flow turn positive following creditor resolutions?