Green Cross Health, the listed medical services provider, saw its first-half operating profit stall despite a large one-off gain which boosted its statutory net profit 24 per cent.

The company, which was formerly known as PharmacyBrands, saw net profit rise to $12.8 million in the six months to the end of September 2016, from $10.3m a year earlier, on an 11.5 per cent increase in revenue to $237m. However, that profit includes a one-off gain of $2.3m that is marked in the accounts as a 'gain on settlement of vendor put option'.

CFO Steve Browning told BusinessDesk this related to Green Cross Healthcare's purchase of Peak Primary in 2014 which involved Green Cross taking the liability for a put option over 17.5 per cent of Radius Medical, with an exercise date in 2017. Browning said the $2.3m one-off benefit recognised a gain on the price. It was valued as a $6.3m liability in Green Cross's 2015 full year accounts.

If this one off is excluded, operating profit before interest and tax was $14.8m compared to $14.6m in the same period a year earlier, a rise of just 1.3 per cent.


Operating profit at its largest division, pharmacy, fell to $12.3m from $12.5m, despite revenues rising 13.7 per cent to $157.8m. Chairman Peter Merton said this reflected the company's "investment in new greenfield sites and the closure of Auckland's Downtown mall."

"The group has achieved good growth, particularly from our community health division," Merton said. "This solid performance is despite New Zealand experiencing its lowest cold and flu season in 26 years."

The community health division, which provides services to support independent living in the community, saw revenue rise 6.8 per cent to $55.1m, while operating profit in the division jumped to $1.1m from $247,000.

A 3.5 cents a share dividend is to be paid on Dec 23, to those on the register at 5pm on Dec 13.

Shares in Green Cross Health rose 3 cents, or 1.2 per cent, to $2.58, and have risen 0.4 per cent since the start of the year.