Shares in Australian Pharmaceutical Industries have surged after the company behind the Priceline brand lifted its full year underlying profit guidance.
API supplies pharmaceuticals, health and beauty products, and services to pharmacies and beauty stores under the Priceline banner, and to pharmacies under the Soul Pattinson and Pharmacist Advice banners.
API said on Wednesday that the profit upgrade was based on strong sales results from its Priceline and Priceline Pharmacy stores, and a solid performance from the pharmaceuticals distribution business.
API expects to make an underlying profit of $31 million to $31.5 million for its fiscal year, which finished on August 31.
That is above the $28 million-$30 million profit range the company had previously expected and is nearly 32 per cent higher than the prior year's result.
Shares in API climbed 10 cents, or 17 per cent, to 68.5 cents.
API recorded same-store sales growth of six per cent during fiscal 2014 while adding 27 stores to its network of Priceline stores, of which there are now 390.
Underlying sales from the pharmaceuticals distribution business grew by 11.9 per cent, excluding the impact of changes to the federal government's Pharmaceutical Benefits Scheme.
API's underlying profit does not include $131 million in writedowns announced by the company in April, which were primarily linked to changes to the value of its loans to pharmacies.
API made a net loss of $115 million for the first half of its 2013/14 fiscal year as the writedowns offset a 29 per cent increase in underlying profit.
Share
