Lockdown Proves Bad Medicine For Australian Pharmaceutical Industries

Pharmacy group, Australian Pharmaceutical Industries was another listed company to reveal the damage COVID-19 has had on its business (Woodside was one as well – see separate story).

The operator of the Priceline and Soul Pattinson pharmacy chain revealed a $7.9 million loss for the year to September 30, a result driven by the impact of lockdowns and other social distancing moves in the March to July periods, plus the later lockdown in Victoria.

The company reported revenue of $4 billion for the year that was a tiny 0.2% up on the figure for 2018-19. Given the pressures from the lockdowns, that was a resilient outcome, helped by a sharp rise in online sales for the year.

But earnings before interest tax depreciation and amortisation (EBITDA) dropped 25% for the year to $91 million.

Underlying net profit after tax, which excludes the financial impact of a change in accounting for the company’s store and other leases, was down 42.6% to 32.5 million.

Despite that the company will pay shareholders a final dividend of 2 cents a share. That’s half the final for a year ago. No interim was paid for 2019-20.

API shares eased 0.9% to $2.065 at the close on Thursday.

Despite the confidence shown in the final payout to shareholders, the company, like so many others, did not give any guidance for the coming year.

And API reported that net debt had been reduced to $18 million from the previous $181.1 million a year earlier.

API has said throughout the pandemic it saw strong demand for its pharmacy distribution division and a boost to online sales, which were up 69% on 2019.

Despite this, the business had to grapple with the fact that its non-pharmacy Priceline stores could not open during COVID lockdowns, while its Clear Skincare business was forced to close throughout coronavirus lockdowns.

Chief executive Richard Vincent said the business had used the shutdowns to build out click-and-collect and online infrastructure.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →