Green Cross Health Limited Analysis

Overview

Overview

Green Cross Health is a provider of primary health care services to communities throughout New Zealand and supports a network of around 360 pharmacies, 41 medical centres, and provides community health care and nursing services to more than 30,500 people throughout New Zealand.

History

The business was first listed as Beauty Direct Online Ltd in March 2000. In February 2005 shareholders approved the acquisition of the business of Life Pharmacy and a 49% shareholding in 17 companies operating Life Pharmacies and in March 2005 the company changed its name to Life Pharmacy Ltd (NZX: LPL).

In May 2008 LPL acquired Care Chemist Ltd and in 2009, the company merged with Pharmacybrands, a group which included Unichem and Amcal pharmacies. In 2010 the company changed its name from Life Pharmacy Limited to Pharmacybrands Limited (NZX: PHB).

The 2011 acquisition of Radius Pharmacy, Radius Medical Limited and Radius Medical Solutions Limited marked a transition to becoming a provider of broader healthcare services. Investment in community care specialist Total Care Health Services in 2014 was followed by the change of company name from Pharmacybrands to Green Cross Health (NZX: GXH) to better reflect the full scope of primary health care services the company offers.

The acquisition of Access Homehealth, also in 2014, gave Green Cross Health significant presence in the community health care market, with more than 4,000 support workers and nurses.

The company continued to extend its presence in medical services, growing the number of practices and patients with the acquisitions of Tucker Consulting, a management services company serving six medical practices and Peak Primary, a group of 12 wholly owned general practice.

By mid-2015, the process of pharmacy rebranding started in 2013 was nearing completion, with the retirement of Amcal, Care Chemist and Radius Pharmacy brands in New Zealand and the growing pharmacy network consolidating under the Unichem and Life Pharmacy retail brands across 330 stores.

In 2015 Green Cross Health also acquired the remaining 50% shareholding in Total Care Health Services Limited, further enhancing the opportunity for growth in the community health market in Auckland.

Performance

The following information was extracted from Green Cross Health Limited's full year results, released on 30 May 2024:

Full Year Result Announcement for the audited twelve months ended 31 March 2024

GREEN CROSS HEALTH REPORTS FULL-YEAR PROFIT OF $12.0M

30 May 2024, AUCKLAND, NZ: Listed primary healthcare provider Green Cross Health, the Group behind Unichem, Life Pharmacy and The Doctors, reported Net Profit After Tax Attributable to Shareholders of $12.0m1.

Result Summary

• Operating Revenue1 of $503.9m, up 2%
• Operating Profit (EBIT)1 of $31.8m, down 7% due to inflationary pressures, lower retail spending and reduced higher margin COVID-19 activity
• Net Profit After Tax Attributable to Shareholders1 down 20% to $12.0m
• Pharmacy Operating Revenue up 1% and Operating Profit down 8% to $19.3m
• Medical Operating Revenue up 5% and Operating Profit down 8% to $15.0m
• Investment in growth of $17.9m, including seven new medical centres and one pharmacy
• 2.0cps dividend declared, to be paid on 21 June 2024.

From continuing operations (the Community Health division was divested on 28 February 2023).

Group Commentary

Green Cross Health Group CEO Rachael Newfield, commented, “It has been a challenging twelve months as the Group has navigated significant headwinds relating to workforce shortages and inflationary pressures impacting consumer spending and profit margins. Funding levels have not kept pace with cost increases and our teams in both Pharmacy and Medical are adapting operations to improve performance.

“Pharmacy saw strong performance in dispensary and vaccination services, supported by the company’s on-going investment in expert care and advice. Seven investments in medical centres were completed in the year to take the general practice network to 423,000 enrolled patients across 66 medical centres, representing New Zealand’s largest general practice enrolled patient base.”

Green Cross Health Chair Kim Ellis added, "The Company’s strong financial position and narrowed focus following the sale of the Community Health division ensure the Group is well positioned to deliver on its strategy of organic and acquisitive growth in medical and pharmacy.”