Strong domestic IVF business performance in FY2022 as we plan and execute on future growth and see recovery in our ultrasound and international businesses.
Monash IVF Group’s domestic IVF business was a strong performer in a challenging environment, particularly in the 2nd half of FY2022. The domestic IVF business grew its revenue by $5.6m which was achieved from price increases of 2% to 3% across all state based markets and stimulated cycle market share growth in Queensland, South Australia and New South Wales. The Omicron COVID-19 subvariant adversely impacted the IVF business in Q3 whereby the Victorian IVF business was impacted by the temporary suspension of services in January 2022 that had a flow on effect in the following months. Most pleasingly and not withstanding this, the domestic IVF business was able to deliver and perform 9,783 stimulated cycles which was in line with the previous year. EBITDA in the domestic IVF business grew by 12.2% or $5.8m reflecting market share gains and price increases which were partly offset by $1.9m increase in medical malpractice insurance costs and $0.6m increase in labour due to high COVID-19 leave and staff isolation requirements impacting workforce utilisation.
The Ultrasound business had its challenges with Sydney impacted during Q1 when Sydney had elevated levels of COVID-19 whilst both Sydney and Melbourne were impacted by Omicron in Q3. Ultrasound scans declined by 8.0% as a result of Pandemic driven restrictions and capacity constraints. As Pandemic factors reduce, we expect to see improvement in performance which was evident in August 2022.
The International IVF business was also impacted by Pandemic related restrictions whereby stimulated cycles declined by 6.5% driven by volume declines in Kuala Lumpur which was partly offset by activity growth in Johor Bahru. Performance improved in the 2nd half in Kuala Lumpur where stimulated cycles declined by 3% compared to 9% in the first half. The pipeline is showing good signs of improvement in patient consultations suggesting activity growth in FY2023.
Overall, the Group delivered revenue growth of 4.7% whilst underlying EBITDA grew by 0.8% and underlying NPAT declined by 4.7%. Underlying EBITDA margin % in FY2022 was 25.0% and considering the disruptions experienced across the business during the year, the underlying EBITDA and underlying NPAT result was pleasing.
Our cash flow performance during the year was positive as pre-tax conversion of EBITDA to operating cash flow was 97% and free cash flow generation was $16.7m. Capital expenditure for the year was $11.8m which included completion and progress of key new clinic projects including Penrith, Darwin and Singapore IVF clinics. Building works also commenced on key IVF flagship clinics in Melbourne and the Gold Coast which will both include new day hospital revenue streams to complement our IVF businesses and improve patient experience.
The balance sheet is in a strong position to support execution of key growth initiatives including expectations for ~$45m of expenditure in FY23 related to acquisition payments and new IVF clinics. New clinics include completion of flagship clinics in Melbourne, Gold Coast, Brisbane and Bali and we are rolling out embryoscope technology. Following this expenditure, balance sheet capacity remains in-place to deliver on future organic and non-organic growth opportunities that may present. The Syndicated Debt Facility was extended during the year for a further 3 years to December 2024 with net debt of $2.1m at 30 June 2022. In addition, a $40m Accordion Facility is available for capital expenditure and acquisitions.
In closing, we are extremely excited by the growth initiatives in-place and prospects for future growth notwithstanding the current Pandemic environment. I’d like to thank all our stakeholders including employees, doctors and shareholders who collectively enable us to achieve our mission and business objectives.
Mr Malik Jainudeen
Chief Financial Officer
& Company Secretary