Pharmacy Daily | API’s Priceline evolution

AUSTRALIAN Pharmaceutical Industries (API) has unveiled plans for the ongoing development of its Priceline Pharmacy network, including a trial of "click and collect" shopping in 2019 and a major upgrade of its Sister Club loyalty platform.

The moves were unveiled by API CEO Richard Vincent during the company's 2017/18 results announcement yesterday (PD breaking news), where he confirmed steady trading conditions and an 8% dip in net profit after tax to $48.2 million - including one-off costs of $6.6 million related to the acquisition of Clearskincare and business restructuring charges.

Vincent said Priceline's overall network sales had risen just over 2% to $2.1 billion, with a total of 475 stores as at 31 Aug, a yearly net increase of 13.

However the year included the closure of some Priceline stores due to excessive rent by some landlords, and he said the company was continuing to focus on "the right stores in the right location".

He said API was aiming to further improve margin and returns for its Priceline franchise partners, as well as "land-banking" Priceline stores for conversion to pharmacies.

Professional services demand within Priceline also increased last year, including flu vaccinations which were up 50% on FY17.

Within API's pharmacy distribution business there was underlying revenue growth of 6.4%, after removing the impact of PBS reforms and slowing sales of Hepatitis C medications.

However total distribution revenue, of $2.9 billion, was down 1.2% and gross profit reduced by $10m due to the combination of PBS changes and the impact of exclusive direct distribution.

Vincent outlined plans to invest in other API brands including Pharmacist Advice and Soul Pattinson, with a strategy to develop API-owned retail offers as well as develop partnerships with key independent groups, plus the potential for "small bolt-on acquisitions" in adjacent services.