Record EBOS earnings

Patrick Davies.
Patrick Davies.

EBOS has announced record earnings for 2017, with net profit after tax of 11.6%

And its pharmacy business continues to successfully handle the sector’s challenges, EBOS says, with the merger of Terry White and Chemmart proceeding well.

Group revenue rose 7.4% to NZ$7.6 billion, with underlying net profit after tax up 9.1% to NZ$138.6 million and underlying earnings per share growth of 8.7%.

“EBOS is benefiting from a number of significant strategic investments undertaken over recent years in both our Healthcare and Animal Care divisions which has delivered record financial performance,” says EBOS Group CEO Patrick Davies.

“FY17 was another significant year for the Group with two major acquisitions completed and a major capital expenditure program underway.

“In FY17 we continued to expand our healthcare businesses with the completion of the TerryWhite Chemmart merger in the first half, and more recently the acquisition of HPS, Australia’s largest provider of outsourced pharmacy services to hospitals.

“We are confident both businesses will complement and extend the Group’s revenue and earnings streams in the future.”

EBOS’ Healthcare business generated a 7.1% increase in EBITDA for the period, underpinned by an increase in revenues of 7.7%. The reported growth rates were negatively impacted by the stronger NZD/AUD exchange rate and in constant currency, revenues grew by 9.8% leading to EBITDA growth of 9.5%.

In the Australian pharmacy market, wholesale revenue growth (excluding hepatitis C medicines) was affected by the ongoing impact of PBS reforms and lower levels of activity in the OTC channel.

However EBOS’ Australian pharmacy business continues to successfully respond to the challenges of PBS reforms, EBOS says, by expanding its revenue streams and improving productivity across its operations.

Further productivity improvements are anticipated following the opening of a new distribution facility in Brisbane, Queensland.

In October 2016, EBOS completed the merger of its Chemmart business with Terry White Group.

The 2017 financial year has been a transformational year for TerryWhite Chemmart, says EBOS, with the network undergoing an extensive rebranding and alignment program to bring the two franchise groups together.

EBOS Group’s Institutional Healthcare division delivered further revenue and earnings growth. Total revenue grew 13.3% (constant currency) driven by a full year contribution of hepatitis C medicines sales, market growth and the contributions from Onelink Australia and Zest.

It’s intended that the Group’s recently acquired HPS business will form a key component of this division into the future, providing the Group with the benefit of an increasing trend from the hospital channel to outsource pharmacy services.

EBOS’ consumer products division, Endeavour Consumer Health, also recorded very strong constant currency revenue growth (+23.5% to last year) with a full 12 month contribution from Red Seal (compared to seven months in FY16).

Red Seal is performing strongly domestically, with export revenue growth subdued by lower Chinese demand. While the business experienced subdued demand from China it benefitted from strong growth in South Korea, EBOS says.

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