Pharmacy Daily | Banks are staying positive on lending

AT THE Medici Capital & Attain's annual Pharmacy Industry Dinner, held at W Melbourne this month, attendees heard that "banks remain relatively positive towards lending to pharmacy, with some evidence of increasing volumes or transactions in the last few months".

Over 200 pharmacists, bankers, wholesalers, banner groups, and other industry participants from around Australia came together in what has been a difficult year for pharmacy.

Guest speakers included Ernest and Young (EY) partners, Mark Leslie and Peter Panatsos, who provided insights into the broader health market and economic conditions for larger transactions.

Leslie and Panatsos discussed the "significant decline in mergers and acquisitions volume and value" that they are witnessing in the broader transaction space, which is being caused by overall economic uncertainty.

However, the pipeline for deals is good, which provides optimism for the future, they added.

The EY presentation also covered different transaction types such as Earnouts and Deferred Payment structures, which is something that could be in pharmacy in the future.

Pharmacy bankers Frank, Christian, and Natalie Sirianni all spoke at the dinner, providing a pharmacy economic and market update to attendees.

"A key message from the night was that now more than ever, it is important that pharmacy owners stay up-to-date with data to ensure they are making educated management decisions, while also understanding the broader context of the market they operate in," Natalie said.

At the dinner, Frank presented pharmacy financial data from 2006 to date, highlighting the trends over the years and how key market influences, such as interest rates, legislation, and economic changes have impacted pharmacy capitalisation rates over the years.

"With 60DD upon us, it is critical to review the impact on each pharmacy individually as the impact varies by location and pharmacy characteristics, and that is why it is critical to have up-to-date data for your pharmacy, so you can make informed decisions," Frank explained. JG