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Ebos profit jumps 20% as sales top $7b

NZ Newswire logoNZ Newswire 25/08/2016 By Jonathan Underhill

Ebos Group posted a 20 per cent gain in full-year profit and lifted its dividends as revenue topped $7 billion for the first time, saying it expects further earnings growth in the current year.

Profit rose to $127 million, or 84 cents a share, in the 12 months ended June 30, from $105.9m, or 70.8 cents, a year earlier, Christchurch-based Ebos said in a statement. Sales rose to $7.1b from $6.1b, exceeding brokerage Forsyth Barr's $6.7b forecast.

Ebos shares have climbed 69 per cent in the past 12 months, more than twice the S&P/NZX 50 Index's gain, as the medical consumables and pet products group throws off enough cash to pay dividends, repay debt and continue making acquisitions, the latest being a deal flagged this month to merge its Australian Chemmart pharmacy chain with rival Terry White Group, taking a half stake in the enlarged business and potentially listing it down the track.

The 2016 results show Ebos's operating cash flow surged 68 per cent to a record $224m in the latest year while return on capital employed rose to 16.3 per cent from 13.7 per cent.

Its healthcare division posted an 18 per cent gain in revenue to $6.68b and a 15 per cent increase in earnings before interest, tax, depreciation and amortisation to $195m.

Its animal care division posted a 10 per cent gain in sales to $415m and ebitda growth of $42.4m.

The company raised its final dividend by 30 per cent to 32.5 cents a share, making 58.5 cents for the year, up by about 25 per cent from the year earlier. That amounts to a payout ratio of 70 per cent of profit, at the top end of the 60- per cent-to-70 per cent range it targets.

Strong cash flow also allowed Ebos to repay debt, which fell to $248m at June 30, from $317m a year earlier.

Ebos shares climbed 2.1 per cent to $17.55.


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