Life Pharmacy Limited full year result

Life Pharmacy Limited full year result

Results for announcement to the market

Reporting Period 12 months to 31 March 2009
Previous Reporting Period 12 months to 31 March 2008

Amount (000s) Percentage change
Revenue from ordinary activities $7,238 +21.3%
Profit from ordinary activities after tax attributable to security holders $61 +1,034.4%
Net profit attributable to security holders $61 +1,034.4%

Dividend No dividend has been declared or is payable.

Life Pharmacy Limited (NZX: LPL) today announced a profit of $61,000 for the twelve months to 31 March 2009, an improvement of $631,000 on the corresponding period last year (2008: $570,000 loss). This represents a turnaround from losses sustained in the previous two full year reporting periods.

The profit after tax of $61,000 (2008: $570,000 loss) includes revenue from associate earnings of $1,069,000 (2008: $426,000). This increase of 151% was driven by a much stronger and more focused marketing programme and includes stronger benefits from the Life Pharmacy ‘Living Card’ loyalty programme that is now in its third year and has in the order of 250,000 members.

“Despite the current economic environment, both retail and dispensary sales have been strong across all Life Pharmacy stores, including franchisees,” said Life Pharmacy Chairman, Liz Coutts. “Total sales growth was in excess of 5%, with comparable store growth around half of this rate. This represents a very commendable retail performance in an environment that continues to be challenging. We are fortunate that beauty products are often regarded as affordable luxuries, a category which traditionally performs well even during recessionary periods, creating opportunities that our marketing team has been able to take advantage of.”

The Company completed the acquisition of Care Chemist Services Limited, franchisor to 8 Care Chemist branded community pharmacies in the greater Auckland area, on 30th May 2008. Since the integration of this business into LPL the Care Chemist brand has continued to grow with a further 13 franchisees joining in its first year as part of the LPL Group.

“The acquisition of Care Chemist demonstrates LPL’s willingness to be a strong and active player in the health sector as well as the beauty sector, where we have a well-established position,” said Ms Coutts. “We will continue to focus on growth opportunities across the entire Health, Beauty and Wellness sector, as we believe the role of the pharmacist in the community for providing valued advice to customers represents a key strategic advantage for us.”

During the year, the company undertook a renounceable rights issue, offering existing shareholders three ordinary shares for every two held. The shares were issued for $0.40, with $0.20 per share payable on allotment and the balance twelve months later.

Under the rights issue the company raised in excess of $11.6 million providing considerable strength to LPL’s balance sheet. “As a consequence the Company is now well placed to make further investments in the health, beauty and wellness sector, in an environment where capital raising and confidence in future growth has been at its lowest in a number of years” commented Ms Coutts.

As part of the rights issue, LPL’s cornerstone investor, LPL Trustee Limited, which is backed by Andrew Bagnall, exercised its rights under the option agreement granted to it on 26 July 2007 and 27,068,975 partly paid ordinary shares were issued to this entity. As a result of this LPL Trustee Limited’s total shareholding is now 50.01%.

“Andrew’s enthusiasm and continued investment in Life Pharmacy has been welcomed not only by the Life Pharmacy Board but also by existing shareholder pharmacists and franchisees. Andrew’s considerable experience, vision and plans for future growth, along with his commitment to the company, provide a very strong platform for Life Pharmacy in the future,” said Ms Coutts.

About Life Pharmacy
Life Pharmacy Limited (LPL) is New Zealand’s only listed Retail Pharmacy Group and comprises the Life Pharmacy, Life Metro, Life Outlet and Care Chemist brands. In total, at 29th May 2009, the LPL Group includes 50 retail outlets operating throughout New Zealand comprising 29 Life branded stores.

ends

© Scoop Media