Green Cross Health operating profits stall despite revenue gain
The company's profit includes a one-off gain of $2.3 million.
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Hawke’s Bay
Listed medical services provider Green Cross Health's first-half operating profit stalled despite a large one-off gain which boosted its statutory net profit 24%.
The company’s net profit rose to $12.8 million in the six months to the end of September, from $10.3 million a year earlier, on an 11.5% increase in revenue to $237 million.
However, that profit includes a one-off gain of $2.3 million that is marked in the accounts as a “gain on settlement of vendor put option.”
Chief financial officer Steve Browning says this related to Green Cross Healthcare's purchase of Peak Primary in 2014 which involved Green Cross taking the liability for a put option over 17.5% of Radius Medical, with an exercise date in 2017.
Mr Browning says the $2.3 million one-off benefit recognised a gain on the price. It was valued as a $6.3 million liability in Green Cross's 2015 full year accounts.
If this one-off is excluded, operating profit before interest and tax was $14.8 million compared to $14.6 million in the same period a year earlier, a rise of just 1.3%.
Operating profit at its largest division, pharmacy, fell to $12.3 million from $12.5 million, despite revenues rising 13.7% to $157.8 million.
Chairman Peter Merton says this reflects the company's "investment in new greenfield sites and the closure of Auckland's Downtown mall.
"The group has achieved good growth, particularly from our community health division," Mr Merton says.
"This solid performance is despite New Zealand experiencing its lowest cold and flu season in 26 years."
In the community health division, which provides services to support independent living in the community, revenue rose 6.8% to $55.1 million, while operating profit in the division jumped to $1.1 million from $247,000.
A 3.5c a share dividend will be paid on December 23 to those on the register on December 13.
Shares in Green Cross Health rose 3c, or 1.2%, to $2.58, and have risen 0.4% since the start of the year.
(BusinessDesk)
Edwin Mitson
Tue, 29 Nov 2016
Tue, 29 Nov 2016
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Green Cross Health operating profits stall despite revenue gain
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