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


Ebos takes 25% stake in Good Price Pharmacy Warehouse

Ebos takes 25% stake in pharmacy retailer, flags further acquisitions

By Suze Metherell

Aug. 27 (BusinessDesk) - Ebos Group, which trebled its annual profit after acquiring pharmaceutical wholesaler and distributor in Australia Symbion, has taken a quarter-stake in an Australian pharmacy retailer and is hunting for more.

The Christchurch-based healthcare and animal care manufacturer, which reported its full-year earnings today, said post-balance date it had secured a 25 percent stake in Good Price Pharmacy Warehouse, an Australian discount chemist retailer, for an undisclosed sum, which it says will add to 2015 year earnings. Outgoing managing director Mark Waller told BusinessDesk the company had more deals on the cards, without being more specific.

"We've looked at a heck of a lot in the last fiscal year despite the new big deal," Waller said. "We've got a work-in-progress on a number of opportunities, we turned down a lot already during the year that didn't cut the mustard for our criteria."

The $1.1 billion cash and scrip Symbion purchase in June 2013 was a game-changer for Ebos, 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, while sales soared 216 percent to $5.76 billion.

"We've really set a new benchmark there," Waller said. The company doesn't give forward guidance, but expects the market to grow "in low single digits, at about 3 percent".

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 price of prescription medications, putting pressure on the drug retailing sector's margins. Waller said the PBS brings the country more in line with New Zealand's own Pharmac pricing model.

"We sit here in New Zealand and say, 'well big deal', we've already been through it and we're doing damn well despite all those changes," Waller said. "It's just a matter of adapting your model and growing your efficiencies."

Peter Davies is taking up the role as chief executive, while Waller will be elected as the board's chairman at next year's annual general meeting.

Shares of Ebos gained 1.6 percent to $9.60, 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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news