Meanwhile Australian Pharmaceutical Industries is raising $150 million after lifting profit by 22.5% for the 12 months to the end of August.
API said the money would be raised by heavily discounted fully underwritten, non-renounceable, pro-rata entitlement offer to existing shareholders and placement to institutions at a price of 65 cents a share, compared with the last sale on Tuesday of $1.055 a share.
The proceeds will be used to reduce company debt and allow for continued investment in the Priceline brand of pharmacies, API said in yesterday’s statement.
Washington H. Soul Pattinson & Co Ltd, API’s largest shareholder holding with around 25%, has committed to take up its pro rata share of the offer and placement, API said.
The company posted a net profit of $18.598 million for the year ended August 31, up from $15.213 million in the prior corresponding period, after higher sales at its Priceline stores and in its pharmacy division.
Group revenue for the year was up 9.6% at $3.55 billion.
API said it expects to grow net profit by about 10% in the fiscal 2010 year, excluding the impact of the equity raising.
API also declared a fully franked dividend of two cents per share, up from one cent per share in fiscal 2008.
The company said pharmacy sales revenue rose 11.3% to $2.8 billion, with "strong" comparable store revenue growth of 5.4% for Priceline.
The Priceline ClubCard membership now approaching 3 million members, making it one of Australia’s largest retail loyalty programs.
CEO, Stephen Roche said in the statement that the performance in the pharmacy side, especially Priceline "particularly pleasing given the uncertainty in consumer confidence created by the global financial crisis in the past 12 months."
""The brand was well placed at the value end of the retail market and continued to offer customers a competitive offer enabling us to ride out the year well.
"We opened 30 new stores in the year despite the historically tight credit markets and caution exhibited by investors during our financial year.
"We expect to be close to achieving our aim of operating 400 Priceline stores by the end of calendar year 2010 or early 2011.
"Management has adopted a strategy of controlled expansion whereby we have opened new stores or converted company owned stores to the Priceline franchise model as the economic conditions prudently allow.
"Priceline’s customer offering of health and beauty is clearly resonating with our independent brand tracking showing that brand perceptions, customer experience, service, awareness and consideration are all at record highs and ahead of our competitors.
"Our investment in the Priceline brand is delivering considerable returns for stakeholders with like for like growth in franchised stores up 9.4%."
API said it is expecting "growth in NPAT of approximately 10% in FY10 excluding the impact of the equity raising."
