Australian Pharmaceutical Industries – which owns the Priceline Pharmacy chain and is part-owned by Washington H Soul Pattinson has reported a modest rise in net after-tax profit for the year to August 31.
Revenue for the year ended August 31 was up marginally, fell 0.4% to $4.01 billion from $4.026 billion.
The Group’s total revenue, excluding the impact of PBS reform and Hepatitis C Medicine, was $4.0 billion, a 4.1% increase on the prior year.
Earnings before interest and tax (EBIT) jumped 14.1% to $94 million while net profit after tax rose 17.4% to $56.6 million but on an underlying basis, it was up just 3.2% at $56.8 million because of $6.6 million in acquisition and restructuring costs that depressed 2017-18’s figures.
A final dividend of 4 cents a share will be paid, taking total dividends for the year to 7.75¢, up 3.3% from 2017-18.
In the commentary, API chief executive Richard Vincent did not provide any guidance for fiscal 2020 but said consumer transactions remained “lumpy week to week.”
Like Super Retail this week, API said retailers were being forced to give up margin to keep sales momentum going in the tough trading conditions.
But he said API was not going down the discount route, so sales were flat for the year.
Mr. Vincent made it clear no talks were happening with one time takeover target and rival, Sigma.
“Our core businesses performed to expectations, with Priceline Pharmacy reporting improving like-for-like sales growth throughout the year and Pharmacy Distribution holding market share in a competitive environment,” he said.
We have bedded down our Clear Skincare acquisition whilst expanding the network to 52 clinics, from 44 this time last year.
Our Consumer Brands business expanded further, and we continue to be excited about its prospects,” he said.
“API’s financial position remains strong. Our net debt levels have reduced from the first half, as our inventory levels and cash conversion cycle have returned to normal levels. The decline in return on capital employed for the year is due to a number of one-off items in our results,” API’s CEO and Managing Director, Mr. Richard Vincent said.
API reported net debt levels increased from $55.9 million at the end of August 2018 to $199.1 million at 31 August 2019, which was down from $262.0 million at the end of February 2019.
The increase over the prior year includes the cost of purchasing a 12.95% stake in Sigma Healthcare Limited, an investment in Consumer Brands inventory and investing in Clear Skincare clinics. The financing costs of the Sigma investment have been offset by dividend payments received over the period,” Mr. Vincent said in yesterday’s release.
