HEALTHCARE Australian Pharmaceutical Industries (API) Four month update
Priceline is the primary value driver at API. With health and beauty a strong retail category, and mini-majors the preferred new retail format, API's Priceline business has been able to grow strongly for several years now. The fact that sales in API's retail division grew a strong 6% YoY in the four months to 31 August, a historically weak period, bodes well for the upcoming Christmas season.
API's wholesale business is slowly recovering a difficult 2006. Anecdotal evidence suggests that better management has helped stabilise the business at higher margins. API has reported that wholesale revenue was up a strong 9% YoY in the four months to 31 August, on improved margins. We are encouraged by the turnaround at API although it will take time to consolidate the early gains.
