Pet food, pharmacy buys pay off for Ebos

The strong New Zealand dollar over the past six months shaved off more than $2 million off the the latest half-year profit of pharmaceutical and pet food supplier Ebos Group.

Chief executive Patrick Davies said the currency had eased a little recently but its future direction was anyone’s guess.

The currency dampened Nzxlisted Ebos fortunes even though the Christchurch-based business earns more from operations in Australia – with total revenue over the whole group now more than $7 billion a year.

The company continued an unbroken bullish run, with its after-tax interim profit ending December 2016 up 18 per cent to $68m. Income growth from Australian operations accelerated faster than local trading.

In Brisbane the company invested $11.6m in a distribution warehouse with the total cost expected to be $58m when completed in mid-2018.

Davies said there would always be opportunities for business acquisitions in New Zealand but realistically there would be more overseas.

Ebos has bought three businesses over the past two years: Blackhawk Pet Care in Australia for $57m; New Zealand vitamin and herbal tea maker Red Seal for $80 million; plus a half-share in the Terry White Chemmart Australian pharmacy chain for $18m.

Red Seal exports its products to China and South Korea, while the Terry White chain was a strategic move to provide outlets for Ebos products, Davies said.

Trading for the remainder of the financial year was expected to remain buoyant but slightly less than the first half result. The fullyear profit was likely to be about 10 per cent ahead of last year’s full year after-tax profit of $127m.

Shareholders will receive an interim dividend of 30 cents a share.