Priceline and Soul Pattinson’s parent company Australian Pharmaceutical Industries is on the hunt for “smaller, scalable” health and beauty acquisitions to build on its retail portfolio.
Chief executive Richard Vincent told the company’s annual general meeting that the company will look for “smaller, scalable acquisitions” and digital transformation would take top investment priority in the current fiscal year.
API this week warned its half year profit is expected to be down nine per cent from a year earlier, due to weaker like-for-like sales in the Priceline business.
“We’re confident that the measures we have taken to improve our overall consumer offering, the strong performance of our pharmacy distribution business and prudent financial management, lead us to expect that full year NPAT will be marginally ahead of FY17,” Vincent said.
Vincent acknowledged long-standing chairman Peter Robinson, who after fifteen years has stepped down from his role on the board.
Mark Smith, a former chairman of Patties Foods, has been appointed to replace Robinson as chairman.
Shares in Australian Pharmaceutical Industries gained 4.5 cents, or 3.3 per cent, to $1.43.
“There is no doubt we enjoy strong and sustainable market positions with very good assets,” said Vincent.
“As such, despite the volatile retail conditions, we can further leverage our assets to create sustainable, organic growth that will generate an improvement in our returns for you [shareholders].
“We will continue to look for smaller, scalable acquisitions that leverage our established retail and business expertise.”
Vincent said the relaunched loyalty program, Sister Club, continued to grow with over 7 million signed up, with members now accounting for over 50 per cent of non-dispensary sales.
“Customers are being bombarded with more choices than ever before and these are now more easily accessible options,” said Vincent.
“They will choose retailers that help them access the latest trends in health and beauty, and while economic conditions remain fragile, they will preference retailers that consistently deliver them value on brands they love. Our imperative is to keep the customer at the centre of our decision making for operational and investment initiatives. “
Vincent said the appointment of ex-Coles, Kathmandu and the Spotlight Retail Group executive Tamalin Morton as general manager Priceline Pharmacy in October had strengthened its leadership team.
“We know from looking at the overseas markets that the successful retailers have increased investment in what sets them apart from the pack, and that’s enhancing the total customer experience,” he said.
“So for our part, that means we will invest in our in-store services and playground environment, which we know appeals to our customers.”
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