Australian Pharmaceutical Industries (ASX: API) has released its FY19 result to investors, is the share price a buy?
API Pharmaceutical is the pharmacy company behind Priceline, ClearSkincare, Soul Pattinson Chemist and much more. The Melbourne-based company is more than 100 years old and operates more than 500 chemists and hundreds more are included in its member network.
API’s FY19 Result
The pharmaceutical business reported that total revenue excluding the impact of PBS reform and Hepatitis C Medicine increased by 4.1% to $4 billion.
One pleasing element to the revenue growth was that Priceline Pharmacy like for like sales returned to growth, with an increase of 0.7% compared to FY18.
The Priceline Pharmacy store network grew by a net 13 stores to 488 stores. Pharmacy distribution revenue excluding the impact of PBS reform and Hepatitis C medication sales and PBS reforms was up 4.2% to $2.9 billion.
Management said that the Clear Skincare integration into the API business is now largely complete. Revenue from this segment grew by 20%.
Reported EBIT (click here to learn what EBIT means) rose by 14.1% to $94 million. Underlying EBIT grew by 3.9% to $94 million.
API’s reported net profit increased by 17.4% to to $56.6 million, whilst underlying net profit grew by 3.2% to $56.6 million.
API Management Comments
API CEO and Managing Director Mr Richard Vincent said: “Our core business performed to expectations with Priceline Pharmacy reporting improving like for like sales growth throughout the year and Pharmacy Distribution holding market share in a competitive environment.
“We have bedded down our Clear Skincare acquisition whilst expanding the network to 52 clinics, from 44 this time last year. Our Consumer Brands business expanded further, and we continue to be excited about its prospects.”
API Dividend
The API Board decided to declare a final dividend of 4 cents per share. This brings the total dividend to 7.75 cents per share, an increase of 3.3% compared to FY18.
Is This API Share Price A Buy?
The company warned that consumer confidence is expected to remain soft, but the company is adjusting its cost base to deliver profit growth. API seems like a decent dividend idea with a fully franked dividend of 5.2%, so it could be worth considering for diversifying income.
But I like businesses that are growing faster than API is, which is why I have my eyes on the shares in the free report below.
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