Wednesday 19 October 2016 12:09 PM
Ebos first-quarter trading 'positive', sees full-year profit growth of 7-10% on constant currency basis
By Jonathan Underhill
Oct. 19 (BusinessDesk) - Ebos Group said it had a positive start to 2017, based on its first-quarter performance, which improved even in the face of a kiwi dollar that reached an 18-month high against its Australian counterpart last month.
"On the basis of our current trading performance we expect constant currency, underlying net profit after tax for the 2017 financial year to grow by 7 percent to 10 percent on the prior year," chief executive Patrick Davies told shareholders at their annual meeting.
That would be slower than the 20 percent jump in profit in 2016, when revenue topped $7 billion for the first time, operating cash flow jumped 68 percent to a record and it had scope to lift dividend payments by 25 percent. The shares have climbed 28 percent this year, almost three times the pace of the S&P/NZX 50 Index. They rose 0.1 percent to $17.62 today and are rated an average of 'hold' based on a Reuters analyst poll.
The Christchurch-based company transformed itself in 2013 with the purchase of Australian pharmaceutical wholesaler and distributor Symbion, its biggest-ever deal, and has since bought New Zealand vitamin and herbal tea maker Red Seal, pharmaceuticals firm Zest, Australian pharmacy retailer Good Price Pharmacy Warehouse and the BlackHawk Premium Pet Care pet food business.
It is preparing to merge its Australian Chemmart pharmacy chain with rival Terry White Group, taking a half stake in the enlarged business in a deal that's expected to complete at the end of this month. Its Onelink Australian operations are now in all public hospitals in Australia's New South Wales state under its exclusive contract with the state government. Its healthcare division generated $195 million of earnings before interest, tax, depreciation and amortisation last year while animal care had ebitda of $42 million.
"We see further growth available to the group and as such we will continue to invest in these segments as we have confidence in not only the underlying economic and demographic fundamentals these markets offer but also our ability to successfully generate acceptable returns for shareholders," the company said at today's meeting.