Pharmacy Daily | API integration pleasing

RETAIL conglomerate, Wesfarmers, is eyeing opportunities to strengthen its Health division, after reporting a $25 million loss for the three months to 30 Jun.

The company's health portfolio, which was formed after its acquisition of pharmaceutical wholesaler, Australian Pharmaceutical Industries (API) at the end of Mar (PD 01 Apr), reported revenue of $1.24 billion for the Jun quarter, to the Australian Securities Exchange (ASX).

"Sales results for the period of ownership of Health were supported by strong demand for cold and flu, and COVID-related products," Wesfarmers Managing Director, Rob Scott said.

"The Health team made pleasing progress on integration activities during the ownership period and has commenced work on transformation strategies to improve financial performance and strengthen the competitive position of API and its pharmacist partners."

The company noted that earnings from API's pharmacy distribution and Priceline businesses were impacted by costs associated with the ongoing transition to the new Marsden Park distribution centre, which commenced in Feb.

Wesfarmers reported that costs related to the acquisition of API were likely to impact the business over the next 10 years.

"The Health division will recognise approximately $13 million per annum in non-cash amortisation expenses over the next three years relating to assets recognised as part of Wesfarmers' acquisition of API, followed by declining annual acquisition amortisation expenses until the 2033 financial year," the company said.

Meanwhile, the company noted that as part of a review of payroll practices across API's business, "potential historical payment errors" have been uncovered.

"API has commenced work to confirm any payment errors and identify affected team members in order to implement a remediation program as soon as possible," Wesfarmers said.