AUSTRALIAN PHARMACEUTICAL INDUSTRIES LIMITED (API)



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General Information
Company Name: Australian Pharmaceutical Industries Limited
Stock Code: API
Website: www.api.net.au
GICS Sub-Industry: Health Care Distributors
Market Cap ($M): 276
Equiv. Shares (M): 488

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 0.565 $ 0.000 $ 0.000 $ 0.000 $ 0.565 0 0%

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 31st Jan 2014
12 Month Target Price (average): $0.623
Brokers Surveyed: 4

Company Overview

Business Description:
Australian Pharmaceutical Industries Limited (API) is an Australian health and beauty services company. API provides wholesale product delivery services, retail services, marketing programs and business advisory services to customers. API also has as a number of brands and banners in the retail health and beauty industry, including Priceline, Soul Pattinson and Pharmacist Advice. API has three main businesses namely, Pharmacy Distribution, Manufacturing and Retail.

Strategy Analysis:
Under the 'Revitalise' plan, a new network plan is forecasted to reduce $18m in annualised cost over 3 years. Total required investment for the program is approximately $60m. Goals include: combining two supply chains into a single system to reduce inventory and freight costs; increase automation at distribution centres; and IT improvements. Revitalise program to consolidate Supply Chain is expected to deliver savings in FY11 of $10m and $18m in FY12. In its retail operations, management is looking to transfer further Priceline corporate stores to franchises. API will also focus is on organic growth in pharmacy and retail operations, as well as improving cost efficiencies.. Australian Pharmaceutical Industries reported NPAT of $30.28m for the year ended 31 August 2012. Revenue from ordinary activities were $3.22bn, down 6.1% from last year. Basic and Diluted EPS were 6.2 cents compared to (4.8) cents last year. Net operating cash flow was $47.82m compared to $48.21m last year. The final dividend declared was 1.5 cents, taking the full year dividend to 3 cents compared with 2.5 cents last year.


Financial Summary
Year to Aug NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2013  A 24.3 5.0 56.3 9.1 3.3 7.2 100.0
2012  A 15.7 3.2 -- 9.3 3.0 10.0 100.0
2011  A -19.7 -4.0 -178.4 0.0 2.5 6.7 40.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2011 A 2012 F 2013 F 2011 A 2012 F 2013 F 2011 A 2012 F 2013 F
Australian Pharmaceutical Industries (API) $276 M 0.5465 0.0944 0.0881 11.3454 10.3670 9.5278 0.0575 0.0607 0.0605
Primary Health Care (PRY) $2,351 M 0.2794 0.0961 0.0920 15.5779 14.2115 13.0143 0.0376 0.0410 0.0492
Sonic Healthcare (SHL) $6,950 M 0.0446 0.1567 0.0903 20.5694 17.7828 16.3093 0.0358 0.0392 0.0431
Sigma Pharma. (SIP) $816 M -0.2237 0.0895 0.1202 15.8297 14.5291 12.9696 0.0552 0.0276 0.0617

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
API -- 10.71 0.47 1.17 0.09
Market 1.08 15.8 1.26 1.97 1.70
Sector 0.91 18.8 2.86 1.49 2.50

Directors
Name Position Start Date
Mr Stephen Roche Chief Executive Officer,Managing Director 14 August 2006
Mr Peter Raymond Robinson Non-Executive Chairman 05 May 2000
Mr Robert Dobson Millner Non-Executive Director 12 May 2000
Ms Esther Carol Holley Non-Executive Director 19 December 2006
Mr Gerry Masters Non-Executive Director 07 September 2010
Dr Michael Wooldridge Non-Executive Director 01 February 2006
Ms Lee Ausburn Non-Executive Director 07 October 2008

Management
Name Position
Peter F Sanguinetti Company Secretary
Genevieve Joy Browne Company Secretary

Substantial Shareholders
Holding Name
58,122,597 (11.91%) S L Nominees Pty Ltd and Associates
31,110,561 (6.37%) J P Morgan Nominees Australia Limited
32,138,866 (6.58%) Citicorp Nominees Pty Limited
120,214,969 (24.63%) Washington H Soul Pattinson and Co Ltd

Calendar of Events
Date Event
12 December 2014 Report (Annual)
23 October 2014 Report (Prelim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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