We can expect losses today from drugs wholesaler and pharmacies operator Australian Pharmaceutical Industries (API) which were placed in a trading halt yesterday ahead of an announcement by the company on the carrying value of its assets.
API is part of the group of companies centred on Washington H Soul Pattinson (SOL) and Brickworks (BKW). It due to reveal its interim figures for 2013-14 on April 30, but surprised yesterday with a request to suspend trading in its shares pending news of the update on the book value of its assets.
API said it expected the trading halt to remain in place until the start of normal trading tomorrow, April 16, unless the announcement is made beforehand. That means a statement will come today sometime.
The company, whose pharmacy chains include Priceline, Soul Pattinson and Pharmacist Advice, is likely to reveal write-downs in the value of key assets as a result of changes to the Pharmaceutical Benefits Scheme.
Shares in API closed at 56.5 cents last Friday.
Media reports this morning said the write downs will relate to bad debts among its retail customers that are battling revenue falls and competition from discount chains.
The clue is in last year’s annual report and accounts which showed $84 million in non-current loan receivables from pharmacy customers, along with a $25 million provision for impairment. It is not known if that has increased in the past few months.
Rival Sigma (SIP) revealed write offs of just over $7 million of debts in its recent annual result. Those debts related to loans made to the collapsed Harrison chain of pharmacies.
