Ebos lifts profit by 19%, targets growth in animal health

BUSINESSDESK: Ebos Group, the medical equipment and consumables distributor that expanded into pet products last year, is targeting growth in its animal health business after the acquisition of the Masterpet business helped lift annual profit by 19%.

Net profit from continuing operations rose to $27.9 million, or 53.6 cents per share, in the 12 months ended June 30, from $23.4 million, or 45.4 cents, a year earlier, the Christchurch-based company says.

That was just ahead of the consensus forecast of $27.1 million, or 52 cents a share. Including Ebos' scientific business, which was sold last year, net profit fell 12%.

"Our Masterpet acquisition is fully meeting expectations and has made a welcome addition to group profitability," the company says.

"Our core healthcare business once again demonstrated the merit of our diverse business model operating across multiple touchpoints in healthcare."

The shares fell 1.2% to $7.95 in trading after the announcement and have gained 21% this year. The stock is rated an average "buy" based on two analyst recommendations compiled by Reuters.

Total revenue rose 6.3% to $1.43 billion, in line with the consensus forecast of $1.44 billion. The healthcare unit contributed $1.34 billion and the animal care business $86.4 million.

The healthcare unit's earnings before interest, tax, depreciation and amortisation fell 11% to $36.7 million, while the animal unit's ebitda was $10.1 million.

The Masterpet acquisition was projected to add about $170 million of revenue and $20 million of ebitda in the first full year ending June 30, 2013.

"As signalled at the half year, we will be looking to Masterpet and other opportunities in the animal health sector to provide some income growth," the company says.

The healthcare unit faces a short-term cap on growth and increasing margin pressure as the sector undergoes significant reform on both sides of the Tasman, Ebos says.

The board declared a fully-imputed final dividend of 20.5 cents per share, payable on October 5. That takes the annual payment to 34 cents per share, or $17.7 million.