API chief executive Richard Vincent upped full year 2021 guidance, after cutting the outlook in July. Peter Braig
Takeover target API says sales stronger
Written by Carrie LaFrenz published originally on AFR
Takeover target Australian Pharmaceutical Industries has increased its full-year profit guidance as Wesfarmers heads into its last week of due diligence on the owner of the Priceline Pharmacy chain.
On July 12, the drug wholesaler slashed its outlook by about 11 per cent due to COVID-19 lockdown restrictions in both NSW and Victoria at the same time as the WA-based conglomerate lobbed an all-cash indicative offer for the company. Rival Sigma Healthcare is also conducting due diligence on API.
Last week Wesfarmers surprised all parties by buying a 19.3 per cent stake in API from Soul Patts, effectively locking out the rival bidder.
API said at that time the lockdown in Sydney and recent lockdowns in other states in June and July forced it to temporarily close 72 per cent of non-pharmacy, company-owned Priceline stores and 75 per cent of the Clear Skincare clinic network.
API also supplies and provides retail support to Priceline, Soul Pattinson and Pharmacist Advice chains.
On Monday, API flagged its underlying earnings before interest and tax (EBIT) will be about $70 million and reported EBIT will be $28 million for the full-year ending August 31.
That is slightly higher that its July estimate of between $66 million and $68 million – although the previous guidance was for about $75 million – and underlying EBIT of $56.3 million in 2020.
Chief executive Richard Vincent said API recorded a stronger trading performance through its suburban and regional Priceline Pharmacies as well as online.
“We also experienced elevated volumes through our Pharmacy Distribution business that we were not anticipating,” he said.
The stock was barely changed at $1.51 mid-afternoon Monday.
Mr Vincent said that the sale of its New Zealand pharmaceutical plant is expected to occur in the first quarter of the new financial year, and therefore API’s reported EBIT remains in line with previous July guidance.
The New Zealand manufacturing business makes personal care and over-the-counter healthcare products.
The company also confirmed The Australian Financial Review’s report that a class action from Priceline franchisees had been filed against it in the Supreme Court of Victoria.
“API denies the plaintiffs’ allegations and will vigorously defend the action,” the company said in a statement.
“API said that it remains focused on supporting Priceline Pharmacy franchisees through these difficult COVID-19 times, so that they can fully play their role in the distribution of vital medicines and the COVID-19 vaccine and serve their communities during and beyond the pandemic.”
API also moved its release date for its full year 2021 results to October 28.
API chief executive Richard Vincent upped full year 2021 guidance, after cutting the outlook in July. Peter Braig
Takeover target API says sales stronger
Written by Carrie LaFrenz published originally on AFR
Takeover target Australian Pharmaceutical Industries has increased its full-year profit guidance as Wesfarmers heads into its last week of due diligence on the owner of the Priceline Pharmacy chain.
On July 12, the drug wholesaler slashed its outlook by about 11 per cent due to COVID-19 lockdown restrictions in both NSW and Victoria at the same time as the WA-based conglomerate lobbed an all-cash indicative offer for the company. Rival Sigma Healthcare is also conducting due diligence on API.
Last week Wesfarmers surprised all parties by buying a 19.3 per cent stake in API from Soul Patts, effectively locking out the rival bidder.
API said at that time the lockdown in Sydney and recent lockdowns in other states in June and July forced it to temporarily close 72 per cent of non-pharmacy, company-owned Priceline stores and 75 per cent of the Clear Skincare clinic network.
API also supplies and provides retail support to Priceline, Soul Pattinson and Pharmacist Advice chains.
On Monday, API flagged its underlying earnings before interest and tax (EBIT) will be about $70 million and reported EBIT will be $28 million for the full-year ending August 31.
That is slightly higher that its July estimate of between $66 million and $68 million – although the previous guidance was for about $75 million – and underlying EBIT of $56.3 million in 2020.
Chief executive Richard Vincent said API recorded a stronger trading performance through its suburban and regional Priceline Pharmacies as well as online.
“We also experienced elevated volumes through our Pharmacy Distribution business that we were not anticipating,” he said.
The stock was barely changed at $1.51 mid-afternoon Monday.
Mr Vincent said that the sale of its New Zealand pharmaceutical plant is expected to occur in the first quarter of the new financial year, and therefore API’s reported EBIT remains in line with previous July guidance.
The New Zealand manufacturing business makes personal care and over-the-counter healthcare products.
The company also confirmed The Australian Financial Review’s report that a class action from Priceline franchisees had been filed against it in the Supreme Court of Victoria.
“API denies the plaintiffs’ allegations and will vigorously defend the action,” the company said in a statement.
“API said that it remains focused on supporting Priceline Pharmacy franchisees through these difficult COVID-19 times, so that they can fully play their role in the distribution of vital medicines and the COVID-19 vaccine and serve their communities during and beyond the pandemic.”
API also moved its release date for its full year 2021 results to October 28.
