Australian Pharmaceutical Industries shares have dropped almost four per cent after the company flagged a fall in first-half profit on the back of weak retail sales at its Priceline pharmacies before and during the Christmas trading season.
API on Monday said net profit for the six months to February 28 will be about $26.5 million, down nine per cent on the prior corresponding period, while full-year net profit is expected to be marginally above 2017’s $52.37 million.
The announcement sent the company’s shares down 5.5 cents, or 3.6 per cent, to $1.475.
Chief executive Richard Vincent said consumer spending remained subdued throughout the 2017 calendar year, compared to the strong sales during 2016, and the weakness did not change during the Christmas period.
Overall network sales for the year to date were up two per cent while like-for-like front-of-store sales had fallen 2.4 per cent for the period.
“We expect to see benefits flow from the steps we have taken to address the tougher retail environment,” Mr Vincent said.
“We’ve strengthened and streamlined our retail leadership team to drive a more responsive business in the changing consumer environment, particularly in the important beauty segment.”
API said it still expects to increase Priceline and Priceline Pharmacy store numbers and that its pharmacy distribution business had continued to perform to expectations.
The dividend payment for the first half is expected to remain in line with the prior corresponding period’s 2.5 cents per share, fully franked.