Terry White Group Limited, the parent of pharmacy franchisors Terry White Management and Chemplus, has announced Net Profit After Tax of $1.2 million, on the back of a 16% increase in total revenue to $48.8 million for 2014/2015.
Financial highlights include:
- Increase in EBITDA from continuing operations of 6% to $3.7 million.
- Product sales increased to $18.3 million, up from $9.3 million in FY2014.
- Cash reserves increased by $3.7 million to $8.2 million.
- Net operating cash inflow was $3.3 million, up from $370,000 in FY2014.
- Dividend of 8 cents per share declared, consistent with the previous period.
Terry White Group CEO Anthony White says the past year has been transformational for the company, highlighted by solid financial performance and its successful acquisition of the South Australian-based Chemplus pharmacy franchise and brand.
“Chemplus has been an important strategic acquisition for our Group, adding 60 additional stores to the network and creating increased distribution points for our private label products,” he says.
“The integration and conversion of the Chemplus stores is progressing well because of the strong alignment between both networks and our shared focus on health and growth.
“The acquisition, which was funded from cash reserves, was completed on 31 July 2015 and is expected to be earnings accretive, before transition costs, in the first year of operation.
“With the Chemplus acquisition now complete, we are actively pursuing our strategy to consolidate with other ‘like-minded’ pharmacy brands.
“Our unique value health positioning and strong retail capability, systems and platforms present an attractive offer to pharmacy owners, particularly given current industry challenges resulting from the impacts of the 6CPA.”
White says the financial performance of the Group is a key highlight of the past financial year, with retail sales powering the network.
“We are consistently achieving above-market, life-for-like retail sales growth in our pharmacies as a result of the investment we’ve made to grow our front of shop income and diversify our revenue streams,” he says.
“Over the last four years we’ve focused on investing in our systems, platform and capability to underpin the growth of the network and to position it for identified opportunities in health.
“We are now seeing the positive rewards from this investment – in-store efficiencies have improved, local marketing and merchandising activities are more efficient and pharmacists are now better able to focus on their customers.
“Our extensive private label range is leveraging key industry drivers and providing the best possible quality at the best possible prices as well as generous margins for franchisees.
“As a result of our investment, we have now reached a key point where further increase in the scale of our network will deliver significant margin growth for the entire Group.”
White also announced that shareholders had unanimously resolved to change the company name to Terry White Group Limited at an Extraordinary General Meeting.
“The Terry White Chemists brand was transferred to the Group in 2014,” he says.
“As a result of this, and to enhance and capitalise on the strength, credibility and recognition of that brand, the company has formally changed its name to Terry White Group Limited.”
White says the continuing changes in the pharmacy industry are expected to present attractive opportunities for the Group in the future.
“We expect industry consolidation will continue in the short-medium term and we are well placed to take advantage of the opportunities for the greater benefit of our entire network,” he says.
“The investments we have made in our retail infrastructure, systems and platforms have us strongly positioned to capitalise on industry shifts and to support pharmacy owners to grow and succeed, particularly given the impact of the 6CPA.
“Given the continuation in price reduction rules and discounts to co-payments under this agreement, it is critical pharmacies have diversified income – and a strong front of shop revenue stream to balance decreases to dispensing payments.
“This has been a key focus for our Group, which is why we’ve invested so heavily in our retail capability and platform.”