Ebos, heading for record FY profit, has $100 million to spend on acquisitions

Friday 26th February 2010

Ebos Group has $100 million to spend on acquisitions and is attracted to companies in the scientific products distribution space in Australia, said chief executive Mark Waller.

The Christchurch-based distributor of medical, surgical, retail, dental and scientific products to the healthcare market in New Zealand and Australia yesterday posted a 38% gain in first-half earnings and indicated full-year net profit will reach the consensus of analyst estimates – a record $23.5 million.

“We’re on target for that,” Waller told BusinessWire. On acquisitions, “we could do a $100 million deal right now. It’s just a matter of identifying targets.”

The company’s niche, competing against multinationals, has proven recession proof, allowing Ebos to lift annual earnings in each of the past five years, while revenue has more than quadrupled over the same period.

The shares are rated ‘outperform,’ based on the consensus of recommendations compiled by Reuters. Ebos was unchanged yesterday at $5.97, having added 35% in the past 12 months, outpacing the NZX 50 Index’s 25% gain.

“Our desire to grow, both generically and by acquisition, continues unabated,” the company said in announcing its first-half results yesterday.

“The Australian market is a more interesting story,” Waller said. Net migration amounted to about 300,000 last year, with another 250,000 expected this year, he said.“What is that doing for demand for housing and consumer goods, and it’s a sinking lid on wage costs,” he said.

Ebos had about $41 million of cash and cash equivalent as at December 31. Bank loans stood at about $70 million, down from $80 million a year earlier.

Businesswire.co.nz

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