Daily ShareChat: Ebos Group

Forsyth Barr analyst John Cairns has raised his forecasts for Ebos Group's 2010 earnings following a meeting with management.

He now expects a reported net profit of $22.6 million for the year ended June 2010 compared with $20.8 million previously. The company reported a $19.7 million net profit for the year ended June 2009.

Ebos' Australian and New Zealand healthcare businesses are continuing to perform positively, reflecting their defensive characteristics and the company's robust multi-channel distribution model, Cairns says.

"Ebos is continuing to drive operational improvements across all business units, focusing on working capital reductions by applying the leading edge inventory and debtor management practices of its PRNZ subsidiary," he says.

Ebos bought pharmaceutical supplies wholesaler PRNZ in 2007 for $86.25 million.

"Our upgrade reflects slightly stronger contributions from both healthcare and scientific (divisions)."

With net debt of $38.6 million and a 19.2% gearing ratio, "Ebos is well positioned to pursue further acquisitions, an area in which Ebos has consistently created shareholder value," Cairns says.

He says Ebos is targeting the acquisition of small to medium-sized Australian healthcare distribution businesses "in a sector which remains highly fragmented to build scale."

It is also seeking opportunities to forge partnerships with existing industry players.

BROKER CALL:  Forsyth Barr rate Ebos Group (NZX: EBO ) as accumulate.

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