TWC to consolidate after merger success

Terry White Chemmart has attributed its substantial growth in revenue directly to the merger of the Terry White and Chemmart brands

The giant has announced its half year results for the period ended 31 December 2017, and says the merger has created a “solid foundation” for its future growth.

TWC’s net profit after tax decreased 17% to $1.1 million after accounting for the merger and integration costs of $0.8 million. However EBITDA rose 24% from 3.4 million (in the six months to 31 December 2016) to $4.2 million.

Total operating revenue rose 96%, from $33.9 million in the corresponding 2016 period to $66.5 million in the six months to 31 December 2017.

“The merger has created a solid foundation for our future growth, and we are now very focused on harnessing the synergies and leveraging the increased customer recognition from the re-brand to deliver enhanced earnings and improved shareholder returns in the future,” TWC said in a statement announcing the results.

Integration of the businesses across marketing, merchandising, operations, store development and corporate functions is now complete.

The group says it now plans to deliver improved earnings by “harnessing the synergies” of the groups and “leveraging the increased customer recognition from our rebrand to drive growth”.

TWC says its “Alive and Well” consumer brand campaign was well received, with its research confirming that spontaneous awareness of the new TWC brand is strong.

“During the next six months, we will consolidate our marketing into the new brand and extend our front line health service delivery,” it says. “Our new loyalty program, REWARDS, will provide an improved, personalised member experience in the form of improved offers, personalised health focused messages and bonus point promotions.

“The company is confident that with our strategic focus of a clear value proposition, a well-defined retail and digital strategy, and our vision to become Australian’s favourite pharmacy will deliver improved performance during the next 12 months, despite the expected continuation of the highly competitive and subdued retail environment.”

While no interim dividend was declared due to the company’s investment in integration and marketing of the merged business, its Board plans to review this position after full financial year results are available.

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