Life Pharmacy half-year profit falls in wake of merger Life

Pharmacy reported a 1.9 per cent fall in half-year net profit to $1.16 million, with the result reflecting the merger between the company and Pharmacybrands.

The merger on September 30, was an acquisition by Life Pharmacy of the issued share capital of Pharmacybrands.

But for financial reporting purposes the merger was treated as a reverse acquisition, meaning the results provided yesterday were those of Pharmacybrands.

Life Pharmacy said its net profit for the six months to the end of September included $271,000 in one-off merger-related costs. Before that the underlying profitability of the Pharmacybrands Group was $1.43 million, an increase of $248,000 compared to a year earlier.

Operating revenue for the six months fell 3.6 per cent to $6.72 million, mainly because of differences in the timing of contributions from suppliers to the group's marketing programme.

During the half-year the pre-merged Life Pharmacy business recorded a profit of $190,000, before abnormal costs associated with the merger of $3.19 million. That compared with a loss of $415,000 for a year earlier.

The improvement in underlying profit of the pre-merged Life Pharmacy business was driven by greater profitability in associate stores and cost savings in the franchise business.

Had the acquisition happened on April 1, estimated consolidated revenue would have been $10.5 million, with a consolidated profit of $1.35 million, before abnormal costs of $3.46 million.

The group operates the Life Pharmacy, Unichem, Amcal and Care Chemist brands.

- NZPA