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Green Cross Health Limited Full Year Result Announcement

28 May 2014

Green Cross Health Limited Full Year Result Announcement

Green Cross Health (NZX:GXH), today reported a net profit of $15.0 million for the 12 months to 31 March 2014, an improvement of $2.0 million (15.6%) on the same period last year. The result was achieved on consolidated operating revenues of $257.9 million (2013: $248.5 million).

The company’s financial position is strong with a cash position, net of borrowings, of $16.0 million, $9.2 million up on last year.

Total assets of Green Cross Health are now $134.4 million (2013: $123.3 million) with total liabilities of $45.0 million (2013: $48.5 million).

"This is a very pleasing result,” said Peter Merton, Chairman of Green Cross Health. “Our profit growth has been achieved through improved performance of all business units together with contributions from new pharmacy and medical acquisitions.”

The Directors have resolved to pay a fully imputed final dividend of 3.5 cents per share to shareholders on the register as at 5pm on 11 June 2014. The dividend will be paid on 23 June 2014.The dividend reinvestment plan continues to operate.

The company’s name changed from Pharmacybrands to Green Cross Health to better reflect the greater diversity of the group and to signal the development of the business as a primary health care company.

“In time we would like Green Cross Health to be recognised as a quality mark that consumers can trust to help them manage their health needs,” Mr Merton commented.

“We believe the silo approach to care and funding in primary care is approaching its use by date. By having a range of services that span primary care we can develop better offerings to ensure the patient is at the centre of a coordinated care approach.”

The company’s growth as a provider of primary health care services was strengthened with $7 million invested in the acquisition of medical centres and pharmacies and, in March 2014, an investment in Auckland based community health care provider, Total Care Health Services.

Under the leadership of Grant Bai, who was appointed CEO in October 2013, activity was focused on brand consolidation, an enhanced consumer loyalty programme and reorganising the operations team to deliver improved in-store experience.

“We have rationalised our pharmacy brands from five to two - Life Pharmacy and Unichem - and relaunched our customer loyalty programme, Living Rewards. In future we envisage the Living Rewards loyalty programme applying across all our business units,” added Mr Merton.

The medical business continued to grow through appropriate equity acquisitions and expanding The Doctors brand across the medical group.

“The contribution to the group of our medical business is now substantial”, said Mr Merton. “We are confident that the platform we have established will create further opportunities for growth.”

In March 2014 the company invested in Total Care Health Services, a business offering predominantly nursing services to a mixture of private and government funded clients.

“We are pleased to have made our first move into this sector of the health care market. We intend to invest in further acquisition opportunities in this sector,” commented Mr Merton.
Over the last 12 months the company has been focused on structuring the business for future growth, improved sales and enhanced service offerings.

“We are confident that in time there will be opportunities for synergy across our pharmacy, medical and community health businesses,” said Mr Merton.

“We have the building blocks in place and the desire to turn Green Cross Health into a leading primary health care brand.”


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