Priceline Pharmacy owner Australian Pharmaceutical Industries expects first-half earnings from its retail operations to fall because of store closures in Melbourne and parts of Sydney in late 2020 and this month.
CEO, Richard Vincent said yesterday that he expects earnings to improve in the second half, which ends in August, barring any further enforced store closures with positive contributions from its pharmacies and Clear Skincare chains.
But he cautioned that the size of profit growth would likely depend on the rollout of the COVID-19 vaccines.
“With this considerable uncertainty, we have not provided profit guidance for FY2021,” Mr Vincent told the meeting.
But he pointed to the improved performance of the company’s Priceline Pharmacy and Clear Skincare chains in the last few months of 2020, “both of which provide grounds for optimism.”
“Whilst still marginally negative. Priceline LFL’s (Like for Like sales) through the Christmas trading period improved, despite the ongoing challenges in the major city CBDs and it is worth noting that we have already seen Priceline stores rebound strongly in those states and communities that have emerged from Covid-19,” Mr Vincent told shareholders.
“Importantly, overall script numbers are in positive territory and growing month-on-month. And shortly we will be in a position to announce some international brands and well-known products that will be available exclusively in Priceline.
“Clear Skincare experienced growth of more than 20% in December reflecting the non- discretionary nature of the health and beauty services we provide and the continued expansion of our network of stores.
“We expect both Priceline Pharmacy and Clear Skincare to experience significant growth in the latter part of this year. Importantly, we have already seen the appetite for Clear Skincare’s products and services since the clinics reopened post lockdown.
“That tells us there is huge untapped demand in the marketplace and we have sufficient balance sheet capacity to accelerate the rollout of the network to meet this demand,” he said.
The meeting was also told that the company stood ready to play a part in the COVID vaccination campaign.
“…we stand ready to support the government and the Australian community roll out the various COVID vaccines – particularly given the scale and speed that will be necessary to create herd immunity.
“Encouragingly, our Pharmacy Distribution business continues to achieve underlying revenue growth which will accelerate with the 777 Pharmacy group coming on board,” Mr Vincent added.
API shares rose 0.4% to $1.235.
