Christchurch-based pharmacy and animal healthcare firm said it is confident it will see a significant increase in earnings in FY20 after reporting a less than stellar result for the year ending June.
Company chief executive John Cullity said 2019 was a year of high activity and strategically important for the group, as it set the foundation for the next wave of growth.
“The group continues to operate in highly competitive markets and this year was no exception,” Cullity said. “We have withstood the changing market dynamics and competitive pressures and delivered both solid underlying earnings growth and another strong cash result.”
Ebos has posted an increase in annual net profit to $137.7 million from the $137.3 million on the previous year while sales fell 0.8 per cent to $6.93 billion, reflecting lower hepatitis C medicine sales in Australia and the impact of reform of Australia’s pharmaceutical benefits scheme. The two combined have caused reduced revenue by $425 million.
The company posted a 5.2 per cent increase in its underlying profit.
A loss on the sale of surplus property, transition costs for new major warehouses and transaction costs all had a $6.7 million one-off impact on the bottom line.
Ebos spent $93.6 million on acquisitions and raised $175 million in fresh capital during the year.
“We commenced operations in two brand new facilities in Brisbane and Sydney providing further warehouse capacity,” Cullity said.
“We also moved to 100 per cent ownership of TerryWhite Chemmart, signed the Chemist Warehouse Group pharmaceutical contract and retained Blooms The Chemist, one of our largest independent pharmacy group customers. These were all great outcomes for our Community Pharmacy division.”
The group’s healthcare segment generated a 4.6 per cent increase in underlying EBITDA for the year, underpinned by solid growth from their Australian business unit. In Australia, healthcare revenue declined by 3.5 per cent to $183 million, however excluding the impact of the reduction in hepatitis C sales and the impact of PBS price reforms, revenue growth increased 5.2 per cent.
The company said the New Zealand healthcare segment delivered earnings in line with last year, with revenue growth of 8.7 per cent largely offset by higher labour and freight costs in our wholesale businesses.
Revenue growth in community pharmacy, excluding the impact of lower Hepatitis C sales and PBS reforms, rose 3.0 per cent.
Ebos has also announced Mark Waller will retire as director and company chair at the end of the annual meeting scheduled for October 15.
Waller, who joined Ebos in March 1984 as chief financial officer before assuming the position of executive officer in 1987, led the group on an ambitious yet disciplined growth strategy, overseeing many successful mergers and acquisitions, including the purchase of Symbion in 2013 for $1.1 billion.
According to the company, under Waller’s leadership, Ebos grew to become the largest trans-Tasman healthcare and animal care company with revenues in excess of $6 billion.
After handing over the reins as CEO in 2014, Waller remained on the board before assuming the position of chairman in 2015.