REDUCED demand for cold and flu medications, improved hygiene and social distancing have impacted Priceline Pharmacy's profits, Australian Pharmaceutical Industries (API) CEO, Richard Vincent, told investors yesterday.
Speaking at the company's 2020 annual general meeting, Vincent, reported a 42.6% fall in underlying Net Profit After Tax (NPAT) across the API business, with its Priceline network reporting a 5.98% dip in like-for-like front of shop sales, as consumer needs changed as a result of the COVID-19 pandemic, with retail revenues down 5.2% to $2.1 billion compared with 2019.
"The result reflects a significant fall in sales of high-margin colour cosmetics as consumer needs changed through COVID," he said.
"This was combined with a fall in demand for cold and flu medicines as people adopted better hygiene and social distancing measures."
Vincent noted the closure of 14 of the group's non-pharmacy stores, saying the lack of consistent foot traffic seen during the pandemic combined with rents meant they were "unsustainable and the decision to close these stores was unavoidable".
However, it was not all doom and gloom for Priceline, with API reporting a 69% increase in online sales, growing consumer use of the Priceline Pharmacy app, click and collect, and home delivery services.
Vincent also reported the network had filled more than 500,000 electronic prescriptions.
API's pharmacy distribution was a shining light for the business, with the division's revenue hitting $2.9 billion - up 6.1% on 2019 - despite the challenges of the COVID pandemic and bushfire crisis along the east coast.
Vincent added the addition of Western Australian pharmacy brand, 777 Group, was likely to deliver a further boost to the wholesaler in 2021.
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