Ebos Group said its healthcare division has experienced "unprecedented levels of demand" amid the coronavirus crisis and that its animal care division also continued to make a "strong contribution," but the company hasn't updated earnings guidance.
"Whilst the outlook for consumer demand in the current environment is evolving and uncertain, at this stage, there is no indication that the group will not meet its previous guidance for full-year 2020," the trans-Tasman pharmaceuticals distributor and animal health products company said in a statement.
On February 20, when the company reported a near 22 per cent lift in first-half net profit, chief executive John Cullity said the group was confident of a significant increase in earnings in the current financial year. At that point, Ebos hadn't seen any significant impact from the coronavirus crisis.
Today Cullity said that during the March quarter the healthcare segment experienced "unprecedented levels of demand in response to Covid-19 developments. The group's significant investment over recent years in its distribution network positioned us well to meet the increased demand."
Ebos shares rose 21 cents, or 0.9 per cent, to $24.12 in early trading although they are still down from $24.25 at the end of last year compared with the benchmark S&P/NZX 50 Index's 6.9 per cent decline.
Cullity said the group's wholesale, distribution and retail healthcare businesses are essential services and critical in ensuring continued and stable supply of healthcare, medical and pharmaceutical products to the community. It has remained open and operational through the crisis.
"While we expect the majority of the group's operations to continue to operate, we do face a period of uncertain consumer demand," he said.
"Covid-19 may affect different areas of the group's diversified healthcare and animal care businesses in different ways.
"For example, our Animates New Zealand joint venture announced the temporary closure of its retail outlets as a result of the level 4 measures announced by the New Zealand government," Cullity said.
"However, the business is able to still trade via its online platform under these measures. When New Zealand moves to level 3 from April 28, then Animates will reintroduce its click and collect service from these retail outlets."
The company has refinanced about A$200 million ($210.3m) of bank debt and working capital facilities and, due to strong bank demand, expanded these facilities by A$50m to A$250m, it said.
"The group received strong support from its banking partners, notwithstanding the present challenging credit market conditions, evidencing the scale, diversity and resilience of the group's operations as well as its leading market positions."
Ebos raised $175m in equity last year and said in February that it had about $300m to $350m headroom on its banking facilities for future acquisitions.
Cullity said the company's "prudent capital management and acquisition strategy over many years places the group in a strong financial position. Our strong balance sheet and liquidity position will allow us to continue growing our healthcare and animal care segments during these unprecedented market conditions and capitalise on opportunities as they arise."
Health and safety
He said the company has introduced a range of health and safety measures to protect both staff and customers and to ensure its distribution sites remain operational, including strict hygiene and social-distancing protocols.
He said its TerryWhite Chemmart retail pharmacy network partners "are providing invaluable support to the Australian community."
Chair Elizabeth Coutts added that the board is pleased with the company's strong financial position.
"I am especially proud of the way our business has been able to adjust its operations to meet unprecedented levels of demand."