Green Cross Health (NZX:GXH) today reported an
increase of 18% in net profit after tax attributable to the shareholders to $17
million for the 12 months to 31 March 2016 (2015: $14.4 million). This was
impacted by a $1.7 million fair value gain and interest costs approximately $2
million above last year. Revenue for the
period increased by 39% to $448 million.
Growth has been
underpinned by strong sales growth, both organic growth in-store and as the
result of acquisitions in Pharmacy and Medical divisions.
“Green Cross Health is taking shape as a leader in
the provision of primary health care services.
Following last year’s acquisitions, the company has started to lay the
foundations for collaborative health care delivery across Pharmacy, Medical and
Community Health,” said Peter Merton, Chairman of Green Cross Health.
Pharmacy revenue grew
by 11%, and equity and licensee pharmacies now total 338, the Group’s highest
number to date.
In July 2015, the Group purchased the remaining 50%
shareholding in Total Care Health Services Limited. This acquisition has
enhanced the Community Health offering, particularly in the Auckland region and
will assist with the growth of nursing services nationwide.
Green Cross Health’s Community Health division
revenue was up $73 million, and the full year impact of Peak Primary drove
Medical Division revenue up $22 million. The Group continued to expand its
ownership in the Pharmacy and Medical divisions, acquiring 11 pharmacies and
two medical centres, while also increasing its stake in three medical practices
and acquiring minority interests in a further two. Green Cross Health now
provides services to a total of 47 equity and independent medical centres.
In August 2015, the Group refinanced its debt
position and paid out a special dividend of $20.4 million. As a result of this
dividend and continued acquisitions, the Group currently has borrowings (net of
cash) of $52.6 million, up from $15.4 million at 31 March 2015. Although the
Group has increased its debt significantly, its balance sheet remains strong
with sufficient head room to take advantage of any future opportunities.
In October 2015 Simon Lipscombe was appointed as CEO
of Green Cross Health’s Community Health division, following the retirement of
Graeme Titcombe.
Dr Tony Edwards joined
the Board in August following the retirement of Ian Sharp after six years of
service.
Dividend
The Directors have resolved to pay a fully imputed final
dividend of 3.5 cents per share to shareholders on the register at 5pm on 10
June 2016. The dividend will be
paid on 24 June 2016. The dividend reinvestment plan continues to operate. This
takes the full year dividend to 22 cents per share, which included a special
dividend of 15 cents per share.
Future
focus
The Pharmacy division has successfully grown retail
sales, with the Living Rewards customer engagement programme making a
significant contribution to this growth. Investment in the programme has grown
membership to more than 1.2 million members and the company is confident that
data and insights generated from the programme will help drive future revenue
and profit growth. The Group also
anticipates realising the full profit contribution from recent pharmacy
acquisitions during 2017.
While the Community Health division result met
expectations and won significant new contracts, funding in the sector continues
to be challenging. A restructure has
better aligned the cost base and revenue streams which, together with growth in
the nursing sector, will improve returns in the future. The focus on expanding
presence within community health services in the Auckland market, and in
nursing services throughout New Zealand will continue.
The Medical division represents an opportunity for
significant growth. Green Cross Health
will invest in providing the infrastructure, support services and innovation
needed to enable the health professionals in its medical centres to focus on
delivering the best possible health outcomes for their communities.
“Looking to the future, a key strategy for Green
Cross Health lies in our potential to deliver a more patient-focused and
measurable health care model, through cross divisional collaboration,” said
Merton.
“We have been shaping our leadership team to
facilitate greater collaboration between our Pharmacy, Medical and Community
Health divisions, sharing knowledge and actively pursuing initiatives which
contribute to better patient experiences.
“The Group is in a strong position to contribute
substantially to the sustainable delivery of primary health care services in
New Zealand and we will continue to engage with stakeholders across primary
care to achieve this,” Merton concludes.
Contact
Investor
Relations:
Steve Browning, Chief Financial Officer +64 9 580
6846
steve.browning@greencrosshealth.co.nz
Media:
Debbie Yardley, Communications +64 21 470 773