Pharmacybrands profit jumps on Radius acquisition

BUSINESSDESK: Pharmacybrands, the retail pharmacy and medical centre company, posted a 93% jump in full-year profit, reflecting the boost to sales from the acquisition of the Radius Pharmacy and Radius Medical businesses.

Net profit rose to $9.9m, or 8.72 cents a share, in the 12 months ended March 31, from $5.16m, or 5.17 cents, a year earlier, the company said.

Sales soared to $105.5m from $19m.

The shares surged 13% to 86 cents. Pharmacybrands acquired Radius Pharmacy in April last year, adding to its Unichem, Amcal, Life Pharmacy and Care Chemist brands and lifting retail outlets to 305, of which it has an ownership interest in 68 as well as two 50/50 joint ventures.

It acquired Radius Medical in June and its medical group now has five centres.

“The company has performed well and grown significantly in a very challenging retail and investment environment,” chairman Peter Merton said.

Pharmacybrands is “always looking for additional investment opportunities in pharmacies, medical centres and other complementary businesses”.

The company will pay a dividend of 3.5 cents a share and will offer a dividend reinvestment plan.

The board wants to retain enough cash “to maintain the flexibility to pursue potential acquisitions and other opportunities to expand in what remains a relatively small NZX company”, Mr Merton said.

Payment of the dividend is conditional on shareholders approving the participation by major shareholders Cape Healthcare and LPL Trustee, which each own a 30.4% stake, in the dividend reinvestment plan.

They are to vote at the annual meeting in August and an independent appraisal will be obtained before then.

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