API has announced its 2017 half year results, with a net profit after tax of $29.1 million
It says it’s expecting to expand its Priceline network by at least 20 stores this financial year, and anticipates a “collaborative” outcome from the King Review.
API’s NPAT for the six months to 28 February 2017 represents an underlying increase of 15% on the prior corresponding period.
Reported NPAT was 27.2% up on the prior corresponding period, which included a $2.4 million loss on the sale of API’s shareholding in CH2 in the PCP.
“We have increased NPAT and returns to shareholders through organic growth in our Priceline Pharmacy network, despite the slower retail conditions in 2017, while generating cash and sustainable returns through our pharmacy distribution business,” says API CEO and managing director Richard Vincent.
The Priceline and Priceline Pharmacy network grew to 450 stores, with 7.2% total retail network sales growth and comparable retail store sales growth up 0.4%. This included strong growth in dispensary.
And API expects to grow the Priceline network by at least 20 stores during the current financial year, to a total of 462.
It says it also expects to generate further operational improvements due to major capital investments made in recent years.
“Despite consumer sentiment being challenging for the foreseeable future and competition increasing, the strength of our combined marketing assets, particularly our Sister Club loyalty program which now has 6.7 million members, and our unrivalled health and beauty range should enable us to maintain and grow our share.”
API’s pharmacy distribution revenues grew by 18%, reflecting the effect of the new high value hepatitis C medicines.
When normalised to remove the effect of these medicines and PBS reform, underlying growth was 5.9%.
“The pharmacy distribution business performed very well in what remain testing conditions,” Mr Vincent says.
“Ongoing growth in accounts in Western Australia is behind a new distribution centre in Perth that will open in June at a capex cost of $5 million.
“This will result in more timely and efficient stock management for both our independent pharmacy customers and our Priceline Pharmacy franchise partners.”
API remains active in the Review of Pharmacy Remuneration and Regulation through its membership of the National Pharmaceutical Services Association and is confident of a collaborative outcome that is sustainable for the industry.
API’s Board declared a fully franked interim dividend of 3.5 cents per share, up 40% on the pcp.