Good morning, ladies and gentlemen. My name is Bruce Rathie, and I'm Chairman of CleanSpace Holdings Limited. I welcome all of those attending this presentation of the CleanSpace financial results for the half year ended December 31, 2023.
Joining me today are Mr. Graham McLean, the CEO; and Ms. Bree Greeff, the CFO of the company. I propose to make some introductory comments and then hand to Graham to cover operations and the financial results.
Before closing, we will give attendees the opportunity to ask questions. Brian will be speaking to the presentation lodged with other documents at the ASX this morning and which can be viewed online during this presentation.
Before reflecting on the financial performance of the company, I wanted to mention 2 changes to the leadership structure of the company. Firstly, Mr. Paul Cassano joined the Board in September 2023 and his insights regarding the mining and industrial space as it relates to our product has been outstanding, and we are grateful for his valuable contribution in that regard.
Further, we have just announced the promotion of Bree Greeff to the permanent role of Chief Financial Officer from March 1, 2024. She has impressed the Board with her diligence and expertise, and we are pleased to have her assume this important role for the company.
Moving to financial performance of the company. We are pleased to say that the first half of financial 2024 revenue is up an impressive 27% against PCP, with costs being materially reduced. I will let Graham take you through the detail, but revenue hit its low point in the first half of financial year 2023 and has grown materially in the subsequent 2 half years, indicating the company is now in a positive business cycle.
This positive revenue growth, combined with the cost reductions achieved and yet to be achieved, should enable cash flow breakeven to emerge during the course of this calendar year should the company perform as expected. This would be a very welcome outcome for the company and shareholders.
I will now hand to Graham to reflect on operations and financial performance during the recent half year in more detail. Graham?
Great. Thanks very much, Bruce, and good morning, everybody. Welcome to the half year results of CleanSpace Holdings. Yes. My name is Graham McLean, I'm the CEO. And for the next 15 minutes, I'll take you through the PowerPoint presentation that we launched with the ASX this morning. And all these documents, including our interim report are available on our website as well.
So just starting off with the presentation. In summary, I'm really pleased to report our H1 FY '24 results, show strong momentum which continues to build as we build quite building blocks for the future for our business, and I'm really pleased to report that we have delivered against the objectives that were set for FY '24 at the half year mark.
We have made substantial progress with our industrial sales growth strategy. And as Bruce mentioned, our H1 revenue was $7.3 million, and that was a growth versus prior corresponding period of 27% and was actually 42% on an underlying basis, excluding a one-off stocking order in the U.S. in quarter 2 FY '23.
Secondly, we have spent a lot of time over the last 18 months rightsizing the cost base of the organization. And I'm pleased to report that we have delivered $8 million of annual savings, which are now in the H1 OpEx run rate. And that's versus the full year 2022 OpEx cost base. Those 2 trends together have combined to reduce our EBITDA significantly from a loss of $6.3 million in the prior corresponding period to $2.5 million in this period. That's an improvement of $3.8 million year-on-year.
And thirdly, our cash position at the end of December 2023, remains very sound. We have $10 million cash at the bank, and that was a small outflow of $2 million from June. That's a significantly lower outflow than we've had in the prior 4 reporting half-year periods.
The key drivers of these favorable financial trends over the last 6 months have really been from our innovative product range. And as you might recall, about a year ago, we launched 2 innovative products, CST Halo -- sorry, CST Ultra and CST Pro and both of those have been well accepted in the market and have been the key drivers of our sales growth over the last 6 to 9 months.
We are also planning in H2 to launch a firmer industrial product called Halo Work, which will be at a more entry-level in your markets. And we believe expanding our industrial range will provide additional momentum going forward into the future. And as Bruce mentioned, we expect to break even at a cash level later during calendar year 2024.
So at the FY '23 full year results, I laid out some objectives that we have for the year. We didn't want to give guidance, but we share these objectives. And I'm really pleased to say that we have made very good progress against all our 2024 objectives at the half year. I already mentioned the revenue growth, which is in line with the 30% goal that we set for the year.
Secondly, our gross margin is favorable over the prior year. It's about 1.5% better, 71%. So a very high gross margin. And we are focused on building our consumable revenue streams which is just under half of our revenue at the moment. Our consumables grew at 31% in H1 over prior corresponding period.
And as I mentioned, we continue to focus on our cost base, and have taken $8 million of cost out on an annual basis. We had a cash breakeven in 1 month in H1, and I expect that to occur at least once, if not more, in the second half. And our cash position means that we do have sufficient funds for growth to cash breakeven, and we don't expect to go and raise existing capital on the basis of our current position.
This graph really just gives you a pictorial representation of the trends that we've been experiencing over the last 4 half year periods. So from H2 FY '22 through to H1 FY '24, the orange columns are expenses, the green columns are sales and the blue column is our EBITDA trend. So I'll touch on expenses first. You can see in H2 FY '22, our expenses were over $12 million, about $12.6 million. And in H1 FY '24, that has fallen to $7.7 million. So that is over $4 million, $5 million of reduction during that period of time. And you can see that now the $8 million of annual savings is now baked into our monthly run rate.
Secondly, the green bars show that we had a low point of sales in H1 FY '23. So the prior period to that, we had COVID impacted sales. So we had quite high sales in health care. H1 FY '23 was the low point, and we have progressively grown sales of double digits in the 2 half year periods since then. So that we were 14% higher this period than the prior period of H2 FY '23.
I would also add that H1 FY '24 is our second highest ever sales for industrial products in the history of the company. So the previous high was during the COVID peak when people were buying any respirator they could get their hands on. So we're now into what I would call a historical high on a sustainable basis, which bodes well for the future.
And so if we take those 2 trends with sales and expenses, you can see how the EBITDA trend is really improving quite quickly as the green bar gets very close to overtaking the orange bar, which in very simple language is what our aim is over the next 6 to 12 months.
So just to give a bit more color and a few more facts behind those headline numbers. From a regional point of view, Europe continues to be the star performer for our regions. Europe represented 2/3 of our sales in H1, and Europe was also up 67% on the prior corresponding period. As I mentioned, North America was down primarily due to the one-off stocking order that we had last year, and I'll give you a bit more color on North America on the next slide. But also encouragingly, Asia Pacific was up 24% and that was driven by Australia, which is actually up 29%.
We are focused on our top 6 or 7 countries around the world, which is where our sales resources are now located and 4 of our top 4 countries actually delivered 82% of our revenue, and that was France and U.K., U.S. and Australia. So we're really focusing on these large markets where we can't get some real traction and we already have a stable base of business.
Our sector industrial grew 31% and now represents 96% of our total revenue. And so the flip side of that, health care is now only 4% of our revenue. We do remain committed to supporting the health care sector and there may be opportunities for us to win business in health care, but primarily we're focused on supporting existing customers and existing consumable business. Health care did drop a little bit versus prior year, but they're relatively small numbers, but those numbers did affect sales growth in the U.S. and Asia, which is where we have most of our health care revenues in the prior corresponding period.
As I mentioned, consumables remains an important focus for us, and that grew very nicely in H1, and they represented 47% of our business in H1. As I mentioned gross margin earlier, really our higher gross margin reflects the higher pricing on the 2 new models that we launched last year. It's quite a complicated calculation to work out the share of price growth versus volume growth over last year. But I would say, on average, our pricing grew about 20% in H1.
And just a little bit more detail on our commercial progress and a couple of comments on our regional performance. As I mentioned, CST Ultra and CST Pro, even the 2 premium [indiscernible] -- or powered and purifying respirators, which really led our growth in our core 6 markets. We will launch Halo Work in April this year, and that will be at an entry price point in the market below Pro, and we believe that lower price will attract a significantly broader market and new customers to try the unique CleanSpace technology, and so we have very high expectations that Halo Work will be a very strong addition to our portfolio in H2 this year.
And as I mentioned, health care remains a much tougher market. It's a much longer selling cycle and the [ routes ] continuing high levels of inventory amongst distributors and end users in the market. And as I talk to other players in the market, other suppliers, that is a very common message that I hear from all our supplier partners as well.
Just a few words about Europe, revenue was $4.8 million, so a very strong half, 67% growth over the prior corresponding period. We had very strong growth in all our key markets, led by the U.K. at 101% growth; DACH, particularly Germany at 68%; and France, which is our biggest market at 60%. We also have the opportunity now to start to expand key distributor partners across Europe. So an example would be one distributor partner that we've had in France for many years, they now have businesses across many European countries. Through that French relationship, we are beginning to sell in other European countries as well. So we believe that can expand our business across many European countries over the coming years.
We've also taken a number of new distributor -- distribution partners, particularly in the U.K. and Ireland, and that has really helped increase our coverage in specific market sectors, but also in some new geographies as well. And we have appointed new sales leaders in Germany and the U.K. over the last few months, and that will really help us deliver further growth as we go forward.
From an Asia Pacific point of view, revenue was $1.4 million, and it was up 24% on prior year and up nicely versus the prior month -- prior half as well. Australia, as I said earlier, was up 29%, and that really drove the growth in Asia Pacific. And in Australia and in Asia, we did add further distributor partnerships, which will extend our geographical coverage, which will be very helpful as well.
Asia revenue was pretty low in the first half and not significant to the total company numbers. Part of that is because most of our business was in health care during the pandemic, but we do expect this to begin to recover over the next 12 months. And we are planning to launch in the Japan industrial market for the first time during H2 2024, and that will become our seventh priority market, assuming we can get this launch successfully underway.
So let me touch on North America, revenue was just under $1 million. It was up on the prior half by 28%, but it was down on the prior corresponding period last year. Underlying revenue was roughly flat versus last year. If you exclude the one-off stocking order that we had in quarter 2 FY '23. The stocking order there actually took about 6 months to deplete into the market. So we have resumed sales to that particular distributor. But the second half of last year, we had very, very low sales.
Underlying industrial revenue growth was actually quite satisfactory in the U.S., but we had continued health care revenue decline. And the net of that was pretty well flat in an underlying sense. We had a relationship with LineDrive for the calendar year 2023, which is a sales and marketing agency, but that was not beneficial for both parties, and we recently mutually terminated that relationship. And so we're looking at the moment at our strategic options in the U.S. because our goal is to grow our business in the U.S. in a substantial and a sustainable way. And our focus will be on the industrial market going forward. So we will keep you posted on any updates we have on the U.S. review going forward.
Now let me turn to cost, cash and other people updates, the other key initiatives that we have underway. We are really focusing our investments on the core markets that I've mentioned already to maximize our resources and our investment productivity. So our sales teams are all in those 6 core markets that I mentioned earlier. We do not have any sales team in Japan currently. And what we're finding is we can build very strong ROIs on the investments that we make in those markets.
Secondly, our back office costs continue to be reduced, and we've made good progress over the last 6 to 12 months in managing our back office costs and rightsizing our business. And particularly, we have simplified our manufacturing footprint and some of our key manufacturing processes. So that we can deliver better COGS and better underlying savings to our business.
Next in -- working capital is our next focus. We will continue to focus on driving working capital benefits in H2 and this, in turn, will release cash for the business. We have a very good trade debtors book, and that is under good control, and we have minimal bad debt. So we're very comfortable with that. We have a very strong payable position at the end of H1. We intend to continue that in H2. And materials inventory was a little high in H1. It was higher than it was at the end of June, and that was really driven by the stock bill for the launch of Halo Work, and in particular, we have a number of components which have a very long lead time. And in some cases, we make prepayments. But to secure supply at a good price, that's actually the right commercial thing to do.
So we did have a bit of a spike in some of our components at the end of H1, but our plan is to reduce our inventory as we launch Halo Work by the end of H2. So our cash flow is expected to improve in H2 versus our H1 results. So as a reminder, it's minus $2 million in H1. We will get our R&D tax rebate in H2, probably in quarter 4, and we're expecting roughly $900,000 cash rebate for that. There was no benefit included in H1 results. And as I mentioned, we have an action plan to reduce our inventory levels in the second half as Halo Work is launched.
Thirdly, as our sales grow and our margin improves, that will leverage our P&L. So that will help us with our net cash position. And obviously, we'll continue to look for further cost optimization measures, which again will help our cash flow going forward as well. So I think those 4 points all point to a better cash position as we move through calendar year 2024.
From a leadership point of view, Bruce already mentioned the appointment of Bree and Paul. Absolutely delighted to have both of them on the team, and that's really strengthened our organization going forward.
So just 2 slides to go. I just want to recap on our strategy. I guess 2 points I want to make here. The first one is that our strategy is very simple. We are transitioning from being a very strong and capable innovative technology-led business to one that also is a very strong sales and customer-focused business, and that is my #1 priority going forward. As we build those building blocks, we become more successful and build momentum, we will accelerate our sales growth, while at the same time, containing costs, and that will be the formula we have going forward.
And my second point is that our strategy is in place. It is working. It is simple, and I believe that we need to continue to develop this strategy and continue to execute it, and we will see significant benefits over the coming months and years. So the strategy recap is really what I've shared with you before. We will focus on the industrial sector, which we know very well. We will prioritize only targeted health care opportunities in the near term.
We will focus on the 6 focus markets that we've been prioritizing so far, plus additionally, Japan going forward. We will expand our product portfolio and Halo Work is first example of that. But we have some other very interesting innovation projects in the pipeline, which we hope to bring to market over the next 12 to 24 months.
And we have learned over the last year, I think it's a very important part of our success in the future that we expand our portfolio. We take the unique and revolutionary CleanSpace technology and IP into new user categories and into new user markets. So that is a really important part of our strategy going forward, and we will continue to build our consumable revenue streams and add innovative solutions on services, such as Bluetooth and corporate reporting, which is still in its infancy but is developing nicely.
And lastly, we'll continue to match cost and cash and drive leverage in our P&L. So just to summarize all that and focus on the outlook, the outlook is consistent with what we shared with you at the FY '23 results and at the AGM. Our strategy, as always, to continue to deliver 30% sales growth every year. And I believe we're well on track to deliver that. We have a sustainable model in place now with the right team, the right building blocks and the right focus and the right investments, and that will deliver sales growth and P&L leverage into the future. And we have a number of key growth drivers that's underpinning this growth in sales.
We have innovative and new premium products and a great pipeline for the future. We are focused on industrial sectors that we know well and we're well known in. We have 7 priority countries that we'll invest in for growth and the immediate next step will be the launch of Halo Work in H2.
And from a cost and cash management point of view, we are rightsizing our cost base, and that will give us some leverage in our P&L going forward. And we will manage our cash very carefully whilst investing for growth at the same time. And as we've mentioned before, we expect to break even at the cash level during calendar 2024.
So I believe our results will continue to improve, and I look forward to sharing our full year results in 6 months' time. And with that, I will pause and hand back to Bruce and ask if we have any questions or comments from the audience.
Yes. Questions or comments?
[Operator Instructions] There are no questions at this time. I'll now hand the conference back to Mr. Rathie for closing remarks.
Okay. Thank you very much. Thank you very much, everyone, for joining this call. We look forward to keeping you posted as to our progress over the second half and beyond. And so I wish you all a good morning, and thank you once again for attending. Goodbye.
