Priceline Pharmacy owner ready to jab Australians with COVID-19 vaccine

Pharmacy chain owner and distributor, Australian Pharmaceutical Industries, says it stands ready to rapidly deploy a COVID-19 vaccine.

API says it’s ready to distribute the coronavirus vaccine when it becomes available. Picture: AFP

Pharmacy chain owner and distributor, Australian Pharmaceutical Industries, says its network stands ready to rapidly deploy COVID-19 vaccines to the community, despite Melbourne’s ongoing lockdown dragging the company to a $7.94m full year loss.

The federal government has invested $1.7bn in a partnership with CSL to produce 80 million doses of two COVID-19 vaccines, which are expected to become available by the first half of next year if clinical trials are successful.

As well as working on developing and securing vaccines, governments have been working with logistic companies and pharmaceutical distributors to ensure the community can be immunised swiftly, particularly the elderly and vulnerable.

Australian Pharmaceutical Industries (API) chief executive Richard Vincent confirmed the company was in talks with the federal government about distributing a COVID-19 vaccine.

“If and when a vaccine becomes available, a co-ordinated, whole of healthcare approach involving GPs, nurses, hospitals, aged care homes and pharmacists will serve Australia well again,” Mr Vincent said.

“The strength of our pharmacy distribution system in delivering vital medicines during the bushfire and COVID-19 emergencies was clearly demonstrated and we stand ready to play whatever part the Government determines is necessary to ensure speedy delivery of a vaccine to the Australian community.”

The 2021 arrival of a vaccine is underpinning federal budget forecasts and business plans across the country, particularly in Melbourne which has remained under a hard lockdown since August.

Despite running essential businesses, API has not been immune from Victoria’s harsh restrictions, which has resulted in the state losing the AFL grand final to Queensland and families forced to dramatically scale back funerals.

API’s net profit in the year to August 31 plummeted 114 per cent, while revenue firmed 0.2 per cent to $4.02bn.

The result included a $37.5m writedown of its Soul Pattinson Chemist brand name as well as restructuring costs totalling $12.3m. On an underlying basis, group net profit fell 45.8 per cent to $30.7m.

Across its chain of more than 470 Priceline Pharmacy stores, sales fell 5.2 per cent to $2bn, while profit fell 14.3 per cent. This was despite a 69 per cent rise in online shopping, including click and collect orders, which it launched in January, for the period.

Mr Vincent said the company was forced to close 22 non-pharmacy Priceline stores during Melbourne’s lockdown. Meanwhile, he said the company’s pharmacy stores in the CBD had “sharp drop-offs” in foot traffic, despite being essential businesses.

“Consumer behaviour has shifted considerably during the year. Shoppers are much more value and health conscious,” Mr Vincent said

“Twenty-two of our non-pharmacy stores were closed during the mandated Victorian closures of non-essential retail. Also, those Priceline Pharmacy stores located in the nation’s CBDs or in non-grocery sections of major shopping centres saw sharp drop-offs in foot traffic during the pandemic’s worst periods.

“Total Priceline store network stood at 474 as of August 31. That is a reduction of a net 14 stores on the previous year. We have taken the decision to close some of our company-owned (non-pharmacy) stores, mostly in CBD locations. This process was in train before the impact of COVID-19 and we have accelerated it since.”

But Mr Vincent said the company‘s “pipeline of independent pharmacists looking to join the network remains very strong and has not been impacted by COVID-19”.

Mr Vincent said API was “well positioned for 2021 and beyond” but declined to give detailed earnings guidance.

“While the ongoing economic uncertainty persists, we cannot offer earnings guidance but the fundamentals to deliver strong forward momentum are all in place.

“Importantly, we have all the capex we need to fully exploit the growth opportunities inherent in Priceline Pharmacy, Clear Skincare, Consumer Brands and our e-commerce platform, as well as invest in new opportunities that complement our health and beauty focus.”

API will pay a dividend of 2c a share, fully franked, on December 15.