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 half year results, released 28 November 2024:

Half-Year Result Announcement for the unaudited six months ended 30 September 2024

GREEN CROSS HEALTH REPORTS HALF-YEAR PROFIT OF $5.6M

28 November 2024, AUCKLAND, NZ: Listed primary healthcare provider Green Cross Health, the Group behind Unichem, Life Pharmacy and The Doctors, reported Operating Revenue of $259.9m for the six months to 30 September 2024 and Net Profit After Tax Attributable to Shareholders of $5.6m.

Result Summary:

Operating Revenue of $259.9m, up 4%

Operating Profit (EBIT) of $16.1m, up 8%

Net Profit After Tax Attributable to Shareholders of $5.6m, up 1%

Pharmacy Operating Revenue flat with Operating Profit up 3% to $8.9m

Medical Operating Revenue up 13% with Operating Profit up 12% to $8.2m

Investment in growth of $3.7m

2.5cps interim dividend declared, to be paid on 18 December 2024.

Group Commentary

Green Cross Health Group CEO Rachael Newfield, commented, “The company expanded its national primary care footprint, adding one pharmacy and one medical centre to its portfolio. During the period our team members have shown resilience navigating through workforce challenges in the sector and embracing change to prioritise customer needs and patient care.

“The company urges Government action to address key issues in primary healthcare. Annual funding increases have not kept pace with cost pressures and, at a time when the country’s health system is under significant pressure, there are further opportunities to extend services pharmacies and medical centres can provide within communities across New Zealand.”