Cryosite’s record quarter puts Auburn licence expansion in focus

Record Quarter Meets Pending TGA Decision

Cryosite Limited (ASX:CTE) has opened FY27 with record quarterly trading, but the company’s next stage of growth still depends partly on a regulatory decision. Revenue reached $4.6 million in the three months to 30 September, up 17% on the prior corresponding quarter, while EBITDA climbed 31% to $1.3 million.

The figures were unaudited, yet the operating leverage was clear. EBITDA margin expanded to 28.5% from 25.4%, as higher utilisation at South Granville was absorbed within existing warehouse space, systems and licences. Operating cash flow rose 40% to $1.0 million, lifting cash at bank to $2.9 million at quarter-end from $2.2 million three months earlier.

Auburn Audit Tests Two-Site Licence Plan

The Therapeutic Goods Administration’s scheduled September audit covered South Granville and Auburn for the first time. Auburn was acquired as part of Cryosite’s capacity expansion, including the Auburn warehouse acquisition, and the company now expects to pursue its inclusion through a variation to its existing GMP licence rather than a separate application.

If approved, the variation would give Cryosite two TGA-licensed sites about four kilometres apart. Auburn could then handle secondary packaging, labelling, inbound, storage and outbound activities for clinical trial materials, as well as storage of cellular therapies. Cryosite also says the two-site structure could support contingency arrangements, physical segregation of regulated inventory and client-specific operating areas.

The audit also considered Cryosite’s application to add “release for supply” to its licence scope. That activity is the final manufacturing step before a medicine can be supplied for use in Australia and is currently outside the company’s licence. The TGA outcomes for both Auburn and the scope variation are expected in the coming months, subject to the regulator’s assessment and published timeframes.

Cool-Room Expansion Adds Immediate Capacity

While the regulatory approvals remain unresolved, a separate capacity project is close to entering service. Cryosite has completed an extension to its largest 2°C to 8°C cool room at South Granville, with racking installed during the quarter. Following quality validation, the room is expected to be commissioned in the coming weeks, increasing capacity in that temperature range by more than 120%.

The expansion was funded through operating cash flow, rather than a new capital raising. Services income, which covers Cryosite’s own inbound, storage and outbound handling work, again grew during the quarter and remains the company’s highest-margin revenue line. Net profit rose 16% to $0.7 million, despite the first September quarter carrying interest and holding costs on Auburn, with interest expense $0.1 million above the prior corresponding period.

Growth Now Runs Through Utilisation and Approval

Cryosite enters the second quarter with stronger financial capacity and additional storage coming online, but the evidence still needs to extend beyond a single quarter. The immediate markers are the commissioning of the enlarged cool room, continued conversion of available space into client activity, and the TGA’s decisions on Auburn and release for supply. Until those approvals arrive, the company has expanded its platform more quickly than its permitted regulatory scope.