API set for Priceline growth
October 28, 2010
AUSTRALIAN Pharmaceutical
Industries has announced the
commencement of an “exciting
growth phase” after this morning
declaring a net profit after tax of
$22.6m for the year to 31 Aug, up
23.6% (PD breaking news).
CEO Stephen Roche said that
“given the company’s
fundamentals are now sound” it
was timely to initiate a growth
strategy that will focus resources on
the Priceline retail network and the
company’s Clubcard program.
He said the company was in early
discussions with pharmacists
around the country “to test an
innovative sign-on and retention
program for the Priceline network,”
with details tobe released before
the end of the year.
The move aims to aggressively
growt the Priceline network over the
next two years, while the company
sale of store program will continue
into 2011 after totalling $3.6
million during the secon d half,
about $600,000 below
expectations and $2.5m lower than
the previous corresponding period.
Roche also confirmed that API
had recently signed a deal with AIA
Insurance, a “global provider of
financial services products” to
market to the 3.2 million members
of the Clubcard program, which is
now one of Australia’s largest retail
loyalty schemes.
This is the first of “a number of
opportunities to leverage the
Clubcard asset,” Roche said.
The company continued its
Revitalise supply chain
transformation program during the
year, with the opening of a new
facility at Bundamba in Qld and the
consolidation of the Rowville
Distribution Centre into the
Dandenong site in Victoria.
There was a significant drop in
earnings for the NZ Consumer
Brands division, which suffered
several unforeseen events during
the year including the flooding of
the factory which led to an
unplanned closure of the facility.
API’s overall revenue was up
4.6% to $3.7 billion, and
comparable store sales for Priceline
increased by 1.4% in a
“challenging retail environment”.
The pharmacy business turned
over $2.8 billion, up 4.7% but
earnings were flat year on year
despite growth in Soul Pattinson
and Pharmacist Advice brands, and
the API Member Premium program.
API estimated that the total cost
of the PBS reforms to the wholesale
sector is $220m between 2010 and
2015, including the current MoU
with Medicines Australia being
considered by Parliament - an
average of $8800 per annum per
pharmacy over the life of the Fifth
Community Pharmacy Agreement.
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