This article first appeared on GuruFocus .
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Revenue:Increased 13% to $6.8 billion.
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Underlying EBITDA:Increased 3.2% to $300 million.
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Healthcare EBITDA:Up 1.3% to $254 million.
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Animal Care EBITDA:Grew 15.1% to $68 million.
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Underlying NPAT:$125 million, down slightly due to DC capital renewal program.
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Statutory NPAT:Increased 13% to $125 million.
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Leverage Ratio:2.2x, within target range.
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Underlying EPS:$0.614.
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Interim Dividend:NZD0.57, consistent with last year.
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ROCE:12.9%, impacted by DC renewal program.
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Community Pharmacy Revenue Growth:14.8%.
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TerryWhite Chemmart Sales:$1.5 billion, up 9.8%.
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Retail Pharmacy Network:782 stores, grew by 89 net new stores.
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Animal Care Revenue:Up 48.3% to $451 million.
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CapEx:$70 million for the half, expected to reduce by 30% in FY27.
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Net Finance Costs:$58 million.
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Effective Tax Rate:27.5%.
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Release Date: February 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Ebos Group Ltd ( ASX:EBO ) reaffirmed its FY26 EBITDA guidance, indicating confidence in meeting financial targets.
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Healthcare EBITDA increased by 1.3% to $254 million, driven by strong revenue growth and disciplined cost management.
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Animal Care EBITDA grew 15.1% to $68 million, reflecting strong branded performance and successful new product innovation.
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The DC renewal program is progressing well, with the largest site, Kemps Creek, now fully operational and performing as expected.
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The company maintained a strong balance sheet with leverage within the target range, and expects leverage to reduce in FY27 as CapEx decreases by about 30%.
Negative Points
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Underlying NPAT was slightly down to $125 million due to the DC capital renewal program and timing factors.
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The company faced ongoing competition in the community pharmacy sector, impacting core margins.
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Net finance costs increased to $58 million, reflecting higher Australian cash rates and additional funding costs.
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The transition activities related to the DC renewal program impacted productivity and operating costs.
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The company expects interest and D&A growth to remain elevated in the second half due to the capital renewal cycle.
Q & A Highlights
Q: Can you explain the restructuring and site transition costs added back to EBITDA and their impact on the second half guidance? A: Alistair Gray, CFO, explained that the restructuring and site transition costs increased from $10 million to $20 million due to the DC renewal program, particularly the Kemps Creek site. These costs are expected to reduce in the second half post-completion of Kemps Creek and materially decrease from FY27 as the DC renewal program concludes.
Q: What factors contribute to the expected step-up in EBITDA growth from the first to the second half of FY26? A: Adam Hall, CEO, highlighted several factors, including the full half benefit of the Kemps Creek facility, acquisitions made late in the first half, and continued support from high-margin businesses like EMT and Animal Care. Additionally, cost discipline and cross-divisional cooperation are expected to drive growth.
Q: How is the competitive landscape in Community Pharmacy affecting your margins, and what is the outlook for the second half? A: Adam Hall noted that while competition remains, market share has been stable with no major changes in the first half. The CSO uplift starting July 1st is expected to positively impact margins, with EBOS's share being about 29% of the PBS units.
Q: Can you provide insights into the impact of recent acquisitions on the FY26 guidance? A: Alistair Gray stated that the acquisitions, which involved $27 million in capital, are expected to underpin a stronger second half performance. However, the overall guidance of $615 million to $635 million in EBITDA remains unchanged, reflecting 6% to 8% growth.
Q: How is EBOS addressing potential margin pressures from the growth of high-value medicines? A: Adam Hall emphasized the importance of productivity improvements and maintaining high service levels. The new DC facilities are expected to enhance productivity, and EBOS's reputation for quality service is seen as a competitive advantage.
Q: What is the strategy for the newly acquired MediAdvice pharmacy group in New South Wales? A: Adam Hall explained that MediAdvice will remain a separate banner with a focus on synergistic opportunities, such as merchandising expertise and retail media, rather than converting them to TerryWhite.
Q: How is the GLP-1 market impacting EBOS's operations and future outlook? A: Adam Hall noted the significant growth in GLP-1 demand, with cold chain capabilities being a key factor. The company is well-positioned to support this growth and is preparing for future developments in metabolic medicines.
Q: What are the expectations for working capital in the second half of FY26? A: Alistair Gray indicated that net working capital increased due to transition activities but is expected to improve in the second half as these activities moderate.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
