Ebos takes 25% stake in pharmacy retailer, flags further acquisitions
By Suze Metherell
Aug. 27 (BusinessDesk) - Ebos Group, which trebled its annual profit after acquiring pharmaceutical wholesaler and
distributor in Australia Symbion, has taken a quarter-stake in an Australian pharmacy retailer and is hunting for more.
The Christchurch-based healthcare and animal care manufacturer, which reported its full-year earnings today, said
post-balance date it had secured a 25 percent stake in Good Price Pharmacy Warehouse, an Australian discount chemist
retailer, for an undisclosed sum, which it says will add to 2015 year earnings. Outgoing managing director Mark Waller
told BusinessDesk the company had more deals on the cards, without being more specific.
"We've looked at a heck of a lot in the last fiscal year despite the new big deal," Waller said. "We've got a
work-in-progress on a number of opportunities, we turned down a lot already during the year that didn't cut the mustard
for our criteria."
The $1.1 billion cash and scrip Symbion purchase in June 2013 was a game-changer for Ebos, more than tripling annual
revenue in a deal that gave Symbion’s owner Zuellig Group a cornerstone 40 percent stake in the New Zealand business.
Net profit jumped to $92.1 million, or 62.8 cents a share, in the year ended June 30, its first full year after the
acquisition, from $28.2 million, or 46.8 cents, a year earlier, while sales soared 216 percent to $5.76 billion.
"We've really set a new benchmark there," Waller said. The company doesn't give forward guidance, but expects the market
to grow "in low single digits, at about 3 percent".
Australia now makes up 78 percent of sales and 80 percent of pretax earnings for the group. Changes to the country's
Pharmaceutical Benefits Scheme has seen the Australian government reduce the price of prescription medications, putting
pressure on the drug retailing sector's margins. Waller said the PBS brings the country more in line with New Zealand's
own Pharmac pricing model.
"We sit here in New Zealand and say, 'well big deal', we've already been through it and we're doing damn well despite
all those changes," Waller said. "It's just a matter of adapting your model and growing your efficiencies."
Peter Davies is taking up the role as chief executive, while Waller will be elected as the board's chairman at next
year's annual general meeting.
Shares of Ebos gained 1.6 percent to $9.60, and have slipped 2.6 percent this year while the benchmark NZX 50 Index rose
9.7 percent. The stock is rated a 'hold' based on the consensus of five analysts polled by Reuters, with a median price
target of $10.29.
(BusinessDesk)