Medical equipment supplier Ebos Group Ltd today reported a 38 percent rise in interim profit, and is optimistic about growth prospects in Australia and opportunities in New Zealand from any reform of health sector procurement.
The company said it was continuing a trend of releasing successive record results in today reporting net profit after tax of $11.7 million in the six months to December 31, up from $8.48m in the same period last year.
Earnings before interest, tax, depreciation and amortisation rose 18.2 percent to $21.4m.
Revenue of $697.23m was up from $691.56m last year.
The company is making a bonus share distribution equal to 13.5c a share on April 13, up from 10.5c last year.
It said it had lower funding costs due to a reduction in debt and costs were also reduced by an efficiency drive, which included greater automation of its business.
The company's operating environment was difficult with customers cautious about capital spending.
It noted that the health sector was the focus of government attention in both Australia and New Zealand.
Managing director Mark Waller said that in New Zealand Pharmac had done a phenomenal job in recent years in driving costs out of drug procurement. The Government was hoping to replicate this in the medical device industry but Mr Waller said pricing of medical devices in New Zealand was already very low by world standards.
"Where they will be able to get the gains is in back office facilities and in aggregation," he said.
He believes Pharmac may get a wider role in purchasing health sector supplies to remove duplication between district health boards.
Ebos supplied products to three DHBs, Waikato, Southland and Otago. It did not have contracts with the Canterbury or Wellington DHB but was well placed in national procurement.
The company did not provide a profit outlook figure. Analysts were forecasting a $23m net profit after tax for the full year and that was "probably in the ball park", Mr Waller said.
He said the company had a very small market share in Australia and there were many opportunities in the Australian market for the company. About $600m of revenue in this half was from New Zealand and $82m was from Australia.
"We have a lot more room to grow there. We have lots of opportunity there," he said.
NZPA