19 October 2005
"Multiple Markets Focus for EBOS”
Having diversified its operational base, EBOS Group Ltd is well prepared for any downswing in the economic cycle, and
will continue to pursue growth prospects, chairman Mr Rick Christie told shareholders at today’s annual meeting of the
company.
EBOS is active in three major sectors: healthcare, consumer healthcare and life sciences and the business has a market
presence in multiple economies. Income streams are derived in New Zealand and Australian currencies and imports provide
further balance.
“Whilst being wary of over-emphasising the downside risks, we are well positioned for any change in the business
climate,” he said.
“The company strongly re-asserted its presence over the past year as the largest New Zealand owned independent national
distributor and marketer of medical, dental and scientific supplies,” said Mr Christie.
He said the 23% rise in revenue to $280m this year reflects:
An increased contribution by the now 67% owned Global Science & Technology Ltd.
Initial contributions from newly acquired Australian assets.
The level of customer demand for products.
Sales and marketing performance sustained at a high level.
Borrowings rose to around $30m to help fund increased investment in life sciences and new acquisitions in Australia and
required interest paid of $2.2m. This year’s expenditure of $14.8m on acquisitions is “effectively investment in future
growth.”
Pre-tax profit was ahead by around 20%. Net profit of $9m enabled a record $5.5m to be paid as dividends. Shareholders
have seen a 31% increase in dividend payments per share over the past two years.
Whilst comfortable with present debt-equity ratios, directors expect there to be further opportunities for EBOS to
expand its business. Accordingly, a range of funding alternatives may be considered.
The managing director and chief executive Mr Mark Waller told the meeting, “EBOS strategy is to extract more value from
existing sectors whilst making new acquisitions with potential to quickly generate additional earnings.”
EBOS is creating a managerial talent pool to energise the still growing business and investing in new positions focused
on exploiting new growth prospects.
“We aim to retain the small business attributes of flexibility, speed, energy, innovation and personal values and attain
those related to greater scale including access to capital, cost savings and career opportunities for staff.”
Mr Waller described EBOS as a technology savvy business continually searching for new products or agencies to introduce
into multiple market channels.
EBOS has centralised customer relations, built a common I.T. platform and consolidated Australian activities under the
EBOS brand.
Health Support Ltd holds a cornerstone position in the supply of medical and pharmacy consumables and the contracts to
supply the Auckland Regional Health Boards with medical consumables for a minimum term of 5 years represent revenue of
the order of $350m between 2005-09.
EBOS Healthcare continues to perform well as a key supplier to hospitals, primary care providers and the aged
care/rehabilitation sector. Whilst the pressure on health budgets is unrelenting, sales of medical technology by the
hospital business unit are expected to continue in the current year with further hospital upgrades and construction
scheduled in the public sector.
Sales of medical devices by the primary health business unit to community-based primary health organizations and clinics
have ongoing prospects.
Excellent opportunities are seen for the relatively new business unit in Occupational Safety and Health, particularly in
the areas of hearing protection, eye and face protection and respiratory protection. Aged Care and Rehabilitation is
developing supply partnerships with rest home and private aged care providers.
The Consumer division is well positioned to sustain strong results in the pharmacy and retail grocery markets, variety
and, baby products. The dental division is developing sales of high-end technology. International has a positive future
with a good forward workload.
The 67% ownership in Global Science & Technology provides a stronger market position in scientific consumables, laboratory media and equipment.
Mr Waller said EBOS is moving strongly forward in life sciences via Global Science and newly acquired Australian
businesses.
Over the medium term, EBOS aims to establish a buying company to source commodity type products from Asia. It will also
develop export markets for house brands Anti-Flamme, Allersearch and LiceBlaster. Consumer Healthcare will be developed
as another core business.
Interest in EBOS has grown in line with the company’s improved earnings trend. The number of shareholders has grown from
2421 in 2004 to 3080 this year.
On the current outlook, Mr Christie said directors are expecting "an intensely competitive and exacting year ahead, for
which we are well prepared”
“At this stage, directors are confident that the current level of dividend payout ratio is likely to be sustainable in
the 2006 year.”
ENDS