Big profit boost for Pharmacy brands

Published: 10:03AM Wednesday November 28, 2012 Source: BusinessDesk

Source: ONE News

Pharmacybrands, the retail pharmacy and medical centre company, lifted first-half profit 52% on little-changed sales with the bottom line bolstered by a full six-month contribution from Radius Pharmacy and Radius Medical, acquired in 2011.

Net profit rose to $6.2 million, or 5.11 cents per share, in the six months ended Sept. 30, from $4.1 million, or 3.85 cents, a year earlier, the Auckland-based company said in a statement. Earnings were eroded by a $1.1 million charge from write-downs and acquisition costs, it said.

Sales inched up 0.1% to $54.2 million.

"In the current six months we have also seen cost savings due to central office consolidation following last year's Radius acquisition," the company said. "The strength of our pharmacy franchise group remains a big focus and we have developed further services to assist franchisee pharmacy revenue growth."

Shareholders agreed to a dividend reinvestment plan, which would let them forgo a cash return in favour of receiving more shares, to let majority shareholders Cape Healthcare and LPL Trustee participate without breaching Takeovers Code requirements.

Cape Healthcare and LPL Trustee each hold a 30.4% stake in Pharmacybrands and based on the company paying a similar dividend over the next five years, could potentially increase their respective stakes to 35.1%.

The dominant shareholders came out of a 2009 deal when NZX-listed Life Pharmacy, whose brands included Life Pharmacy, Life Metro and Care Chemist, made a $20 million all-scrip offer for Pharmacybrands, the country's then-biggest retail pharmacy group with the Amcal and Unichem brands.

Pharmacybrands' board declared a first-half dividend of 2 cents per share.

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Big profit boost for Pharmacy brands