McPherson’s Limited (ASX:MCP) has begun its transition to a new operating model following a comprehensive review of its route to market. The company is shifting from a direct-to-store distribution model to one that utilises third-party warehousing and pharmacy wholesalers for product distribution. This new approach is designed to simplify operations, streamline cost structures and unlock incremental underlying EBIT of approximately $4.0–$5.0 million per annum from FY26 onwards.
Under the new model, McPherson’s will exit its own warehousing and order fulfilment processes. Excel Logistics Pty Ltd, subject to the usual landlord and financier consents, will sublease the Kingsgrove warehouse from 1 March 2025 until the end of the current head lease in June 2027. In addition, warehousing for all channels – excluding New Zealand – will be outsourced to Excel as the company’s third-party logistics provider. McPherson’s is also in advanced discussions with experienced pharmacy wholesalers to boost its reach in the Australian pharmacy channel, with Clifford Hallam Healthcare Pty Ltd already engaged for the Fusion Health brand.
The transformation is expected to affect around 65 roles within the warehouse team, and a consultation process with affected employees and their representatives is underway. In FY25, the company anticipates incurring material costs in the range of $9.0–$11.0 million, comprising both cash outlays for redundancies and implementation and non-cash write-downs of right-of-use assets.
CEO Brett Charlton commented that the announcement marks the first step in realising the company’s strategic priorities. The revised operating model is aimed at addressing the residual shared fixed costs that remained after the divestment of Multix, while creating a scalable, variable cost base that supports future business growth.
