Pharmacy Daily | Priceline cops COVID hit

AUSTRALIAN Pharmaceutical Industries (API) remains confident its Priceline Pharmacy business model will recover after reporting an 8% fall in gross profit during the first half of the 2021 Financial Year.

Announcing the half year results to the Australian Securities Exchange (ASX) this morning, API CEO, Richard Vincent, said the results reflected the impact of COVID-19-related lockdown restrictions, with its Melbourne and Sydney CBD stores the worst hit.

"Priceline Pharmacy's like-for-like sales were down significantly in its two largest CBDs, with Melbourne down by 65% and Sydney down by 51%," he said.

"Priceline's large CBD footprint is impacting the speed of our recovery, but we are confident in the business model, the strength of which is strong like-for-like sales growth in suburban stores and in those states that were largely COVID-free and in the fact that we held our market share despite a reduction in market demand for cosmetics."

Vincent added that the company was engaging with CBD-based Priceline Pharmacy stores' landlords to amend leases, adding "these negotiations are helped by our proven determination to close stores where we cannot achieve satisfactory rental agreements".

Despite the potential for store closures, Vincent said the Priceline Pharmacy network had remained static with 474 stores across the country, a number he said was likely to increase in the second half of the financial year, "as we partner with franchisees to open new stores in high traffic areas with significant profit potential".

Vincent added that while Priceline's retail register revenue was down by 10.7% to $526 million, online sales saw a huge increase (52%) on the same period in 2020.

Meanwhile, API's pharmacy distribution revenue remained steady at $1.46 billion, down 0.9% on the previous corresponding period, reflecting the loss of Chemist Warehouse over-the-counter volume, following the conclusion of a temporary agreement.