Announcement
HALFYR: GXH: GREEN CROSS HEALTH REPORTS STRONG HALF YEAR PROFIT OF $9.7M
08:31am
GXH
26/11/2021 08:31
HALFYR
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REL: 0831 HRS Green Cross Health Limited
HALFYR: GXH: GREEN CROSS HEALTH REPORTS STRONG HALF YEAR PROFIT OF $9.7M
Green Cross Health (NZX: GXH)
Half Year Result Announcement for the unaudited six months ending 30
September 2021
GREEN CROSS HEALTH REPORTS STRONG HALF YEAR PROFIT OF $9.7M
26 November 2021, AUCKLAND, NZ: Listed primary healthcare provider Green
Cross Health, the Group behind Unichem and Life Pharmacy, The Doctors and
Access Community Health, reported Revenue of $310m in the six months to 30
September 2021, up 12% on the prior period. Net Profit After Tax Attributable
to Shareholders of $9.7m represents a 9% increase on the prior period. The
Group has supported New Zealand communities throughout the COVID-19 pandemic,
continuing to provide its essential services, ramping up swabbing efforts
over the COVID-19 surge period from August 2021 and rolling out vaccinations
at both pharmacies and medical centres.
Result Summary:
Revenue of $310m, up 12%
Operating Profit (EBIT) of $20.5m, up 14%
Net Profit After Tax Attributable to Shareholders of $9.7m, up 9%
Pharmacy Revenue up 11% and Operating Profit up 9% to $13.3m
Medical Revenue up 12% and Operating Profit up 13% to $5.7m
Community Health Revenue up 14% and Operating Profit up 38% to $2.5m
Group net cash position of $5.9m
Dividend declared of 3.0 cps for the half year ended 30 September 2021.
Green Cross Health Group CEO Rachael Newfield, says, "The performance for the
six months to 30 September 2021 reflects an increase in activity across all
three divisions. Our COVID-19 response efforts have been a huge focus for our
business, and our front-line workers have been pivotal in helping to ensure
the country can cope with the strain that COVID-19 places on the healthcare
system. As an essential service, our pharmacies and medical centres have
remained open to support communities, despite a drop in demand associated
with lockdown periods, particularly in Auckland. We have also continued to
provide essential homecare services to New Zealand's most vulnerable, via our
Community Health operations. As one of the leading providers of primary
healthcare in New Zealand, we've been able to ramp up our swabbing efforts to
meet the COVID-19 delta surge that arose from August 2021 and move quickly
into providing COVID-19 vaccinations to substantially support the
Government's 90% vaccination target.
"Earlier in the year, the quality of Green Cross Health's primary healthcare
services was acknowledged at the New Zealand Primary Healthcare awards, with
all three Green Cross Health divisions winning first place awards. These
included team members winning the pharmacist of the year and the pharmacy
technician of the year awards, one of our medical centres winning an award
for its recent extensive refurbishment and winning an excellence in
information technology award for our support worker app developed in-house in
our Community Health division.
"In addition, we are pleased to have progressed our strategy of acquisitive
growth, adding two pharmacies and four medical centres, increasing our
shareholding in two pharmacies and one medical centre, plus investing in an
online digital health company.
"During the period, we promoted Alison Van Wyk into the newly created role of
Chief Operating Officer. This appointment follows the addition of Wayne
Woolrich, who joined as General Manager of the Medical division. Alison's
extensive primary healthcare experience, and Wayne's experience leading
Health Hawke's Bay, adds further depth and expertise to the Green Cross
Health management team."
Unichem & Life Pharmacy Division
Pharmacy Revenue for the period saw an increase of 11% to $170m. Operating
Profit for the period was up 9% to $13.3m, with growth driven by a higher
dispensary gross profit and earnings from COVID-19 vaccinations. Retail sales
were flat year-on-year, with the impact of lockdowns, particularly in
Auckland, softening retail sales in the six months to 30 September 2021.
Auckland retail sales typically represent 37% of total retail sales.
Pharmacies have scaled up their vaccination capability to support the
roll-out of the COVID-19 vaccine and to help increase the vaccine uptake
within New Zealand's communities. The Green Cross Health Pharmacy network is
providing a significant number of New Zealand's COVID-19 vaccinations in
pharmacies, workplaces, homes and through co-ordinating joint programmes
together with the District Health Boards to reach NZ's most vulnerable
communities. The network is also poised to support the Government's ongoing
COVID-19 vaccine response for younger age groups and to support booster
vaccinations.
Despite a lessening of retail restrictions post period end, retail sales
performance is expected to continue to experience a headwind in the second
half of the financial year due to the lockdown impacts and reduced demand for
certain items. Pricing and margin management is being reviewed carefully,
with exclusive distribution arrangements and strategic brand relationships
being sought.
The ongoing optimisation of our pharmacy investment portfolio remains a
priority. In the period, the company acquired two partner pharmacies in
Whakatane and increased its shareholding in Walls and Roche and Whanganui
pharmacies. Acquisitions include PillDrop, an online health technology
company that sorts and delivers prescription medicine and provides care,
advice and support to customers. The PillDrop investment ensures Green Cross
Health stays close to the increased demand for digital services and the
changing needs of customers.
As the pressures on the health sector increase, additional innovative
professional services have been scaled up within the company's network that
enhance the role of the pharmacist and promote easier access to healthcare.
While the Government continues to refine its design for New Zealand's Health
& Disability sector with a focus on equity of access, a review of the
prescription co-payment policy is warranted to ensure alignment with equity
of healthcare access for all.
The Doctors Medical Division
Medical Revenue grew 12% to $46m, with Operating Profit up 13% to $5.7m.
Performance was supported by the impact of acquisitions prior to 31 March
2021, as well the acquisition of Muritai Health Centre in Wellington and an
increase in shareholding in The Doctors Napier. After period end, on 1
October 2021, the acquisitions of three further centres were completed: The
Doctors Wakatipu (Frankton and Shotover centres) and Apollo Medical Centre in
Auckland. These acquisitions bring the division to 50 Medical centres, with
317,000 enrolled patients, an increase of 32,000 patients since 31 March
2021.
Operationally, COVID-19 again had a significant impact on acute patient
presentations, particularly in urgent care and walk-in settings and
Auckland-based practices. Some medical practices were able to mitigate this
decline by providing COVID-19 swabbing and vaccinations. Medical practices
were well-prepared to provide patient services virtually through this period
of operational restrictions, including operationalising telehealth solutions.
The clinical focus has been to keep staff and patients safe throughout the
COVID-19 pandemic, respond to community outbreaks, provide COVID-19 testing
and COVID-19 vaccinations. Medical centres have been working diligently to
ensure routine care is not compromised. Clinical leadership for the network
has been enhanced with the appointment of Dr Stephanie Taylor into the role
of Clinical Director. Recruitment of clinical staff has been a priority, with
the development of an internal recruitment service to source talent from New
Zealand and overseas.
Whilst managing the COVID-19 operating environment is ongoing, the underlying
strategy remains to grow earnings both organically and via further
acquisitions, reduce the operational cost per patient and to provide
high-quality equitable services for patients and communities across New
Zealand.
Access and Total Care Health Community Health Division
Revenue in the Community Health division for the period increased by 14% to
$94m with Operating Profit up 38% to $2.5m. The division's strategy is to
support clients in the community with higher clinical and complex support
needs, improve service delivery, tight cost management and utilise IT systems
to enhance workforce efficiency and client outcomes.
A slender operating margin of 2.6% highlights the pressure on financial
sustainability of the community health sector, with challenging funding
arrangements, labour cost increases and the costs associated with workforce
shortages in the sector.
Again, our COVID-19 pandemic response shows the value of the Home & Community
support sector in reducing the pressure on an already stretched healthcare
system. Support from all funders is called for to return the sector to a
position of financial sustainability and to recognise the value of supporting
vulnerable populations so they may live within their communities for longer.
Green Cross Health also advocate strongly with funders for pay parity for all
nurses, in line with the recent Government funding uplift for all DHB nurses.
Outlook and Dividend
Green Cross Health has delivered a positive first half performance,
reflecting both increased activity across all divisions and ongoing
investment in acquisitions, including $7.2m of acquisition investment during
the six-month period.
The Company performs a key role in supporting New Zealand's COVID-19
response, with 161 pharmacies and 28 medical centres administering COVID-19
vaccinations. Green Cross Health pharmacies currently represent 52% of all
pharmacies vaccinating in New Zealand. The network's role will evolve with
booster vaccinations and as further age groups become eligible for the
vaccination.
The Board has declared an interim dividend of 3.0cps for the half-year ending
30 September 2021, reflecting the strong half year period and a robust
balance sheet that can support both an acceleration of acquisitions and the
payment of dividends.
Contact:
Ben Doshi
ben.doshi@gxh.co.nz
Rachael Newfield
rachael.newfield@gxh.co.nz
About Green Cross Health
Green Cross Health (NZX: GXH) is a trusted New Zealand primary healthcare
provider with multidisciplinary healthcare teams with the purpose of working
together to support healthier communities. Green Cross Health's is focused on
creating sustainable healthcare solutions with positive outcomes and
experiences.
New Zealand owned and operated, Green Cross Health operates under branded
groups Unichem and Life Pharmacies, The Doctors medical centres, Total Care
Health community nursing services and Access Community Health to provide
support, care and advice to diverse New Zealand communities.
Providing convenient access to professional healthcare with 351 Unichem and
Life Pharmacies covering almost every New Zealand community, Green Cross
Health's makes more than 3.6m home visits to more than 42,000 community
health clients and cares for 317,000 enrolled patients at medical centres.
End CA:00383627 For:GXH Type:HALFYR Time:2021-11-26 08:31:14
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