EBOS reports ‘solid growth’ in underlying earnings


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Full-year highlights included signed agreement with Chemist Warehouse Group for exclusive wholesale distribution, and moving to 100% ownership of TWC – but PBS reforms are having an impact

EBOS Group has reported “solid growth” in underlying earnings for the past financial year, according to its annual report published on Thursday.

Net profit after tax (NPAT) for the 2019 financial year was $137.7 million (up 0.3% on previous year), while total revenue was $6.9 billion.

Underlying results showed NPAT up by 5.2% and EBITDA up by 4.6%, although total revenue saw a small downturn of 0.8%.

It has been a year of “high activity and strategically important for the Group as it has set the foundation for the next wave of growth,” said EBOS Group CEO John Cullity.

“We commenced operations in two brand new facilities in Brisbane and Sydney, providing further warehouse capacity.

“We also moved to 100% ownership for TerryWhite Chemmart, signed the Chemist Warehouse Group pharmaceutical contract and retained Blooms The Chemist, one of our largest independent pharmacy group customers,” he says.

“These were all great outcomes for our Community Pharmacy division.”

Revenue growth in Community Pharmacy, excluding the impact of lower hepatitis C sales and PBS reforms, was up 3%.

In Australia, Healthcare revenue declined by $183 million (down 3.5%), however excluding the impact of the reduction of hepatitis C sales and the impact of PBS price reforms, revenue increased by 5.2%.

“The Group continues to operate in highly competitive markets and this year was no exception. We have withstood the changing market dynamics and competitive pressures and delivered both solid underlying earnings growth and another strong cash result,” said Mr Cullity.

He added that he was pleased the government, through its recent review into the CSO, had recognised the importance of the wholesale industry in providing Australians with equal access to medicines in accordance with the National Medicines Policy.

“However if the wholesale industry is to maintain its service standards then it requires additional financial support through increased CSO funding and a sustainable wholesale margin,” said Mr Cullity.

“The financial stability of the industry is at a critical juncture with wholesalers being significantly impacted by PBS reforms.

“Approximately 80% of distribution volumes now generate a margin of less than $1 given there has been no effective increase in wholesaler remuneration since 2010.

“EBOS, together with other members of the National Pharmaceutical Services Association (NPSA) continues to actively engage with the Federal government and Minister for Health with respect to successfully resolving these matters as part of the negotiation of the upcoming 7th Community Pharmacy Agreement.”

EBOS Group says it is confident of a significant increase in earnings in the financial year 2019-20.

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