Australian Pharmaceutical Industries (API) is now confident about boosting its performance in the 2014-15 year after cleaning up its accounts and taking a big bottom line loss in the year to August 31.
CEO Stephen Roche said API expected stronger earnings this financial year on the back of operational efficiencies and the expansion of its Priceline Pharmacy chain.
“We expect to expand our Priceline Pharmacy network by at least 20 stores and were confident that we have the right programs in place for pharmacists and consumers, all of which are underpinned by more efficient support functions,” he said in a statement with the earnings announcement yesterday.
The company declared a fully franked final dividend of 2c a share, up 14.3% from 1.75c a year ago, and a sign of the company’s confidence about 2014-15.
This brings total dividend payments for the year to 3.5c a share fully franked, up 7.7% from 3.25c a share for the prior year.
The company is the owner of the Priceline, Soul Pattinson and Pharmacist Advice chains which reported a $90.8 million net loss for the year to August 31, a major turnaround from the $24.3 million profit in 2012-13.
But that loss had been well signalled by the company in updates since April and yesterday’s announcement was a final confirmation of the numbers, a point well understood by the market which boosted the shares 4.4% higher to 70c yesterday.
API YTD – Turnaround continues at Australian Pharmaceutical
API reported an underlying profit of $31.6 million, up from $23.9 million last year and beating the company’s guidance issued in early September.
API’s underlying profit does not include the $131 million in write-downs announced by the company in April, which were primarily linked to changes to the value of its loans to pharmacies.
Revenue for the year rose 5.7% to $3.35 billion, from $3.2 billion.
API reported overall sales growth of 11.1% for its Priceline and Priceline Pharmacy network, and like for like sales growth of 6% on the previous year.
The number of stores increased by 27 to 390.
The company refinanced its securitisation facilities for a term until May 2018 and its cash advance facilities for a further two years.
"This reduces API’s facilities by $75m and net debt decreased by $18.1m for the year, while also recording positive cashflow through the period,’ the company said yesterday.
