Sales steady at $4 billion, and underlying profit result up 0.9%.
Australian Pharmaceutical Industries has just released its annual results for the year to 31 August 2018, with a reported Net Profit After Tax of $48.2 million, down 8% on the prior corresponding period.
The result included the impact of $6.6 million in one-off costs associated with the recent acquisition of Cleanskincare, along with business restructuring to lower the company’s ongoing cost base.
Total revenue dipped fractionally to just over $4 billion, reflecting $155 million lower demand for Hepatitis C medicines. Excluding this figure revenue increased 3.3%, however underlying earnings declined 1.5% to $118.7 million, primarily due to the effect of an increased number of price reduction cycles in the PBS during the year, as well as exclusive direct distribution arrangements, API said.
CEO Richard Vincent said the 2018 financial year was “pivotal in managing the existing business through difficult conditions and in establishing a broader growth portfolio for the company”.
He said API was confident it has a highly complementary group of assets which would grow revenue and earnings, with the Board increasing its final dividend payment to 4c per share.
Priceline Pharmacy total network sales rose 2.1% to $2.1 billion, and the group expanded by a net 13 stores to a total of 475 nationally. Vincent said trading conditions had been tough, with the company deciding to close some API-owned stores where landlord expectations were not realistic.
Pharmacy distribution revenues declined slightly, and the impact of PBS changes and exclusive direct distribution removed over $10 million in gross profit compared with the prior year. Vincent confirmed he expected the Department of Health to report on its review of the CSO in the coming weeks.
API’s consumer brands portfolio had a very strong year, with revenue up 17% to $59.3 million.
Vincent said the business was positioned for expected earnings growth in FY19, but declined to provide further guidance pending the Christmas trading period and the outcome of the CSO review.
More information in tomorrow’s issue of Pharmacy Daily.
