Green Cross Health posts 20% gain in first-half profit on growth in pharmacy returns

Green Cross Health [NZX: GXH], the primary healthcare group formerly known as PharmacyBrands, posted a 20% gain in first-half profit on increased returns from its Life Pharmacy and Unichem pharmacy chains and a contribution from its community health businesses.

Profit was $8.3 million in the six months ended September 30, from $6.9 million a year earlier, the Auckland-based company said in a statement. Sales jumped 58% to $213 million and included a contribution from its newly acquired community health services.

Green Cross has transformed itself from a pharmacy business to a broader healthcare provider through acquisitions, buying Access Homehealth, a community-based healthcare and support business with 18,000 clients in December 2014, having purchased medical centre business Peak Primary and a 50% stake in community nursing and health care business Total Care Health last year. It bought the remaining 50% of Total Care in July.

"Our growth into community health has strengthened our position as a provider of primary health care services throughout New Zealand," chairman Peter Merton said.

Pharmacy retail services lifted revenue by 8.2% to $138 million, or by 14.5% on a same-store basis, resulting in a profit of $9.2 million, up from $7.9 million a year earlier. Medical services revenue jumped to $23 million from $7.2 million, reflecting the acquisition of Peak Primary, although profit slipped to $715,000 from about $1 million.

Chief financial officer David Collins said following the integration of the new business, the company expects the acquisitions will lead to an increased profit in the coming year.

Community Health, the new division, contributed about $52 million of revenue and $457,000 of profit in the latest year.

Green Cross will pay a full imputed interim dividend of 3.5c a share on December 18, with a record date of December. 8. That's in addition to the 15c a share special dividend, also fully imputed, it paid in August after reviewing its capital structure.

The shares last traded at $2.70 and have gained 36% this year.

(BusinessDesk)