Ebos Group told the market it lost its $2b contract to supply Chemist Warehouse Australian stores with pharmaceutical products in June. Photo / Warren Buckland
Ebos Group told the market it lost its $2b contract to supply Chemist Warehouse Australian stores with pharmaceutical products in June. Photo / Warren Buckland
Ebos Group has kept up its strong performance delivering a record profit up 25 per cent on last year, despite losing a $2 billion supply contract with Chemist Warehouse.
The New Zealand and Australian listed company made a A$253.3 million (NZ$273.5m) net profit for the year ended June, while underlyingprofit - Ebos’ preferred measure - was up 23 per cent to A$281.8m.
Revenue lifted 14 per cent to A$12.2 billion (NZ$13.2b), the majority of which came from its healthcare division.
“We are pleased to report another record profit for Ebos for FY23 driven by continued strong organic growth across our group businesses as well as substantial contribution from prior year acquisitions, reflecting the benefits of our strategy of investing for growth,” chief executive John Cullity said in a written statement.
He announced a second half dividend of 57 cents per share, taking the total annual return to shareholders to $1.10.
Ebos Group is largely a medical product and device distributor in New Zealand and Australia.
The company was mainly a medical supplies and products distributor. It represented international brands AstraZeneca, Roche, 3M, Johnson & Johnson, Ansell, Alpha Keri skincare and Deep Heat in New Zealand.
It owned and operated 550 Terry White Chemmart pharmacies across Australia and just completed building a contracts logistics distribution centre in Auckland. It planned to build more for pharmaceuticals to cater for future growth.
It’s also a pet food company that owned brands Black Hawk and VitaPet, and co-owned Animates.
Underlying earnings were up 33 per cent to A$582m (NZ$628m) with growth in both its healthcare and animal care divisions after acquisitions, such as New Zealand rural dog food company Superior Pet Food, and investing in a pet food manufacturing facility.
Cullity said while sales in its pet food brands increased in the year, growth in pet treats and accessories had slowed, reflecting a change in discretionary consumer spending.
It planned to launch a new Black Hawk pet food range this financial year, focused on supporting dogs’ health needs.
In June, Ebos told the market it had lost its A$1.9b contract to supply products to Chemist Warehouse’s Australian stores, and the revenue generated from it would cease from June next year.
“We always recognised that the contract renewal was a risk and we are confident in the group’s alternate growth strategies that are well established and diverse,” the company said with the result on Wednesday.
Inflation was also an issue with increased costs being felt across labour, freight and the cost of goods, but plans were in place to preserve margins.
It expected more growth in profitability this financial year.
“The macroeconomic outlook continues to be uncertain however our earnings have shown resilience in this environment,” the company said in a statement.
Ebos chief executive John Cullity took home $8.3 million in the financial year just ended. Photo / File
This year’s annual report showed chief executive Cullity was paid A$7.7m (NZ$8.3m) in the year after hitting all his performance targets.
The packet included A$4.6m of short-term incentive payments, some of which was linked to executing the acquisition of medical device distributor LifeHealthcare.
He was the highest-paid New Zealand listed company executive last year, according to the Herald’s executive pay survey with a take-home packet of A$5.85m.
Special fees related to the LifeHealthcare transaction of between $10,000 and $20,000 were also paid to board directors, including board chairwoman Liz Coutts.
She said Ebos had 5000 employees across New Zealand, Australia and Southeast Asia.
