As expected, Australian Pharmaceutical Industries Limited (API) met guidance in reporting underlying profit for the twelve months ended August 31 of $51.4 million up 18.0% on 2014-15.
Reported net profit was $51.6 million, up 19.8%, which includes the previously announced $2.4 million loss on the sale of API’s shareholding in associate CH2 and a $2.7 million net after tax benefit relating to prior year write downs.
Revenue rose 11.1% to $3.83 billion in the 12 months to August 31.
API’s Board has declared a fully franked final dividend of 3.5 cents a share, making a final for the year of 6 cents a share, up 33% from the 4.5 cents a share paid in 2014-15.
Directors said yesterday that due to the ongoing strength of the operational results and balance sheet position, directors have determined to move towards a 60% payout ratio in the future.
Looking to 2016-17, the company said it expects that it will open another 20 Priceline Pharmacy stores during the year and it will continue to generate operational improvements following the capital investments in prior years.
“The business has made long term investments that have underpinned the company for ongoing growth. This will enable management to continue growing the business, adapt to changes and ultimately deliver strong returns to shareholders in the foreseeable future,” the about to retire CEO, Stephen Roche said in yesterday’s statement.
“API’s increased profits, low debt and the improved working capital position reinforces the strength of company direction, management capability to execute strategy and now provides flexibility for the company in its future development,” he said.
“API has built one of Australia’s leading retail brands and maintained the pharmacy distribution business successfully through major industry reforms; during this time we have been able to improve API’s underlying NPAT from $23.9m in FY13 to $51.4m this year, or an increase of 115%,” Mr Roche said.
“The strategy has delivered improved returns for shareholders; our return on equity and return on capital employed continue to build and over the last three years we have increased dividends by 85% while ensuring a sustainable platform for the company,” Mr Roche said.
The Priceline Pharmacy network has now hit a record 442 stores, up from 420 at the end of the last financial year. Overall retail sales for the period were up 7.6% to $1.15 billion and comparable store sales growth was 2.8%. Including dispensary sales, overall retail sales were about $2 billion, 11.7% up on the prior year.
“The sales growth has been consistently driven by two factors; by attracting new franchise partners to the brand to expand the network and by increasing comparable store sales,” Mr Roche said.
Pharmacy Distribution revenues grew by 11.2% primarily from the effect of the new high- value Hepatitis C treatments. Normalised for the effect of PBS Reforms and Hepatitis C medicines underlying growth was 4.8%.
“Our market position has remained very steady and consistent during the past year which in a highly competitive market reflects a strong offer to pharmacists across a range of services,” Mr Roche said.
The New Zealand operations have continued their constant improvement since 2013 and in the last year sales grew by 6.8% to $45 million and gross profit by 4.2% in the same period.
The shares rose 0.2% to $1.92.
