Green Cross Health boosts annual profit 14%, eyes more acquisitions

Green Cross Health [NZX: GXH], which changed its name from Pharmacy Brands earlier this year as it expands into the primary health sector, boosted annual profit 14 percent as its new pharmacy and medical acquisitions came on stream.

Profit rose to $18.8 million in the year ended March 31, of which non-controlling interests were entitled to $3.8 million, from $16.6 million a year earlier, the Auckland-based company said in a statement. Sales rose 3.8 percent to $258 million, outpacing a 1.2 percent lift in the cost of sales to $146 million.

Prior to the name change in March, it had largely been seen as a retail pharmacy operating the Unichem, Amcal, Life Pharmacy, Radius and Care Chemist brands and running 28 medical centres. Green Cross Health is chasing growth through acquisitions in the primary healthcare sector, and bought a 50 percent share of Total Care Health Services in March, its first expansion into community healthcare. The company has consolidated its five pharmacy brands down to Life Pharmacy and Unichem, and relaunched its reward programme, Living Rewards, which it said it wants to expand across all business units.

"We intend to invest in further acquisition opportunities in this sector," Peter Merton, chairman of the group said of the Total Care Health acquisition. "In time there will be opportunities for synergy across our pharmacy, medical and community health businesses."

Sales at its pharmacies rose to $223.9 million from $221.7 million a year earlier. Medical centre sales nearly doubled to $9.5 million from $5.7 million and income from services provided to stores and medical centres rose to $24.5 million from $21 million.

"Our profit growth has been achieved through improved performance of all business units together with contributions from new pharmacy and medical acquisitions," Merton said. "The contribution to the group of our medical business is now substantial. We are confident that the platform we have established will create further opportunities for growth."

The board declared a final dividend of 3.5 cents per share, payable on June 23 with a record date of June 11, taking the annual dividend to 7 cents per share, up from 5 cents a year earlier.

Shares in the NZX-listed healthcare group rose 1.5 percent to $1.35, and have advanced 6.4 percent this year, just beating the NZX All Index's 6 percent gain over the same period.

(BusinessDesk)