Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


UPDATE: Ebos outlook subdued after Symbion boosts FY profit

UPDATE: Ebos outlook subdued after Symbion acquisition driven profit boost

(Adds investor comment, share price)

By Suze Metherell

Aug. 27 (BusinessDesk) - Ebos Group is unlikely to repeat a trebling of annual profit fuelled by last year acquisition of the Symbion pharmaceutical wholesaler and distributor in Australia, where regulatory changes are putting pressure on the sector.

The $1.1 billion cash and scrip Symbion purchase in June 2013 was a game-changer for the Christchurch-based healthcare and animal care manufacturer company, more than tripling annual revenue in a deal that gave Symbion’s owner Zuellig Group a cornerstone 40 percent stake in the New Zealand business. Net profit jumped to $92.1 million, or 62.8 cents a share, in the year ended June 30, its first full year after the acquisition, from $28.2 million, or 46.8 cents, a year earlier, it said in a statement, while sales soared 216 percent to $5.76 billion.

"It is pretty difficult to compare to the prior year because of that acquisition, which is a huge material uplift in their earnings," said Sam Trethewey, investment analyst at Milford Asset Management. "The big thing that really hurt them was the currency rate against the Australian dollar, that hurt their earnings when you translate it back into kiwi dollars. The result was in line, or slightly below what the market was expecting."

Australia now makes up 78 percent of sales and 80 percent of pretax earnings for the group. Changes to the country's Pharmaceutical Benefits Scheme has seen the Australian government reduce the number of drugs it funds, putting pressure on the drug retailing sector as a whole.

Ebos was coy on its outlook, saying while it faced "on-going regulatory challenges in our pharmacy markets we have always demonstrated innovative ways to generate earnings growth and we are confident that our management team can continue the company’s strong track record of growth into FY15."

Milford's Trethewey said it was unlikely 2015 would again see a trebling in profits but a falling New Zealand dollar against the Australian currency would support some growth, even as the Australian Federal government cuts to PBS funding in coming years squeezes margins for the pharmaceutical sector.

"It is a pretty subdued growth outlook for at least half their business," he said.

Ebos's healthcare segment's earnings before interest, tax, depreciation and amortisation rose 212 percent to $153 million, although the earnings margin slipped to 2.8 percent from 3 percent, while sales at the company's Australian pharmacy business were little changed from a year earlier. The company's animal care division reported a 100 percent jump in sales to $338.9 million and a 58 percent increase in Ebitda to $29.4 million, while the Ebitda/revenue margin shrank to 8.7 percent from 11 percent.

The company will pay a final dividend of 20.5 cents a share on Oct. 17, imputed at 35 percent. That takes payments for the year to 41 cents.

Shares of Ebos edged up 0.1 percent $9.46 in morning trading, and have slipped 2.6 percent this year while the benchmark NZX 50 Index rose 9.7 percent. The stock is rated a 'hold' based on the consensus of five analysts polled by Reuters, with a median price target of $10.29.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news