StockTalk

Good fall yesterday.  A great company that has weathered this current storm well.  I'm keen to add to my position if it falls much lower. Anyone else looking?

Great company, but for my liking still ways too dear. The days of inflated PE's might be over ...

Yesterdays drop was probably just some overseas fund selling. Maybe they have some inkling as well?

EBO PE back to more 'normal' levels - based on forecast F22 earnings current PE is 27

But if we are in a real bear market expect PE to fall to about 15/17 -- but did drop to low teens in past times when the world was falling apart -- could even go that low .....isn't that what happens in bear markets

At a PE of 17 that would give a share price of say $24 and we'd be screaming BUY BUY BUY at the bottom ... and could still be on a losing bet

Anyway here's what the PE has looked like over the years .... but remember this this time its different0000ebo.JPG

One could say that EBO 'deserves' / 'has earnt' a reasonably high PE -- but not outrageously high

Earnings growth over many years pretty impressive0000ebo2.JPG

Great graphs winner

Gosh

Forbar downgraded Ebos to $36.45 neutral for upcoming result.

After FPH announcement,I hope EBOS is going to deliver next week.  Thoughts?

Spend the weekend going through Ebos history and current EPS expectations.  I don't think the market is valuing in the latest purchase of Life Healthcare.  Purchased a decent chunk this morning to add to my long term holdings.

Reporting on Wednesday.

Quote from: Shareguy on Aug 22, 2022, 12:00 PMSpend the weekend going through Ebos history and current EPS expectations.  I don't think the market is valuing in the latest purchase of Life Healthcare.  Purchased a decent chunk this morning to add to my long term holdings.

Reporting on Wednesday.

Agree with you 110% about Life Healthcare ......... one day reflected in share price

Quote from: winner (n) on Aug 22, 2022, 12:31 PMAgree with you 110% about Life Healthcare ......... one day reflected in share price

I'm thinking sooner than later, over $40 by end of week.

Quote from: winner (n) on Aug 22, 2022, 12:31 PMAgree with you 110% about Life Healthcare ......... one day reflected in share price

Admittedly - Ebos (10 yr backward PE 41) looks still a bit cheaper than FPH (10 yr backwards PE of 52), but not by much.

On the other hand: FPH has lots of IP (i.e. a huge moat), while Ebos is basically just a packet shuffler.

Are we sure, market will reprice EBO in the desired direction? Better not wake it up ...

Just looking at the respective SP trends. Interesting - FPH (the orange line) seemed to be up to Covid pretty much in harmony with EBO (blue) ... and then FPH got thanks Covid its big shot into the arm ... but recently dropped back.

EBO-FPH.JPG

Just wondering whether the two will go after Covid back into sync ... and whether it is FPH going back up or EBO going back down?

Interesting times ...

Craig's News and Views highlighted the power of dividend growth at work.

If you purchased Ebos in December 2002 was paying 4.7 percent gross interest.  Total dividend growth from 2002 to 2021 (671%)is 11.3 percent per annum. Capital growth was 15.8 percent.

Performance has been spectacular.  Will it continue no one really has any idea. History says it will though. I'm good with that. Its a bottom draw share in my opinion with $50 not far away if past performance continues.

Hey BP, I'm intrigued with your '10 year backward PE'

Is this like the CAPE that some people use?

Whatever do you calculate your 10 year backward PEs or is there a source to look them up.

Quote from: winner (n) on Aug 22, 2022, 06:39 PMHey BP, I'm intrigued with your '10 year backward PE'

Is this like the CAPE that some people use?

Whatever do you calculate your 10 year backward PEs or is there a source to look them up.

Hi winner,

no idea what a CAPE is - other than some garment for rainy days ... or a headland extending into a body of water.

Re the PE's am I following Churchill's sound advise: "Never trust a statistic (in this case PE) you didn't made up yourself" :p ; Sorry, no (publicly accessible) source I am aware of ... the input (for the individual results) comes from annual reports (or, when I am lazy, from marketscreener) and is going into a big spreadsheet ;). The output comes from my formulas and Microsoft's (Excel) processing.

Thought result was excellent.

Craig's say

Exceptional FY22 result
 EBOS delivered an exceptional FY22 result, with uNPAT up 21% on revenue up 17% on pcp. uNPAT was 3% ahead of consensus and 1.6% ahead of CIPe's top of the street estimates. Acquisitions contributed 8% to growth, 10% was organic, and a furthe 2-3% was driven by Covid (likely to reverse in future)

Retain Overweight

EBOS is not cheap at 24x fwd P/E but is firing on all cylinders, taking market share and leverage in all of its key segments, and offers an attractive combination of defensiveness and growth. Our key concern heading into the result was the impact of inflation on margins, but our concerns have been allayed. We retain Overweight rating with target price lifting 7.7% to $48.44.

No far from $50

I agree with Craig's and have been acquiring on weakness. Ebos is now one of my largest positions.

Forbes say healthcare will do well in any recession.

https://www.forbes.com/sites/qai/2022/09/09/3-industries-that-are-poised-to-do-well-in-a-recession/?sh=615026fe3307

Quote from: Shareguy on Oct 02, 2022, 11:56 AMForbes say healthcare will do well in any recession.

https://www.forbes.com/sites/qai/2022/09/09/3-industries-that-are-poised-to-do-well-in-a-recession/?sh=615026fe3307

and the pets will still be loved and fed

Well, I have continued buying and now have enough. Great quality company and I think good buying at these levels.

Quote from: Shareguy on Oct 13, 2022, 11:42 AMWell, I have continued buying and now have enough. Great quality company and I think good buying at these levels.

Good luck.

They are on my watchlist, but admittedly - they don't look that cheap so far. Backwards PE is 40, Forward PE still above 21 with an earnings CAGR of 10. I guess that's fair valued, but not really cheap, isn't it?

Sure, they are one of these companies always looking too dear, but who knows, that's what they said about FPH and XRO as well, and look how far they dropped.

Quote from: BlackPeter on Oct 13, 2022, 02:10 PMGood luck.

They are on my watchlist, but admittedly - they don't look that cheap so far. Backwards PE is 40, Forward PE still above 21 with an earnings CAGR of 10. I guess that's fair valued, but not really cheap, isn't it?

Sure, they are one of these companies always looking too dear, but who knows, that's what they said about FPH and XRO as well, and look how far they dropped.

My spreadsheet says backward PE has averaged 19 last 10 years and 22 last 5 years (and Morningstar data about the same)

Agree forward F23 PE about 21 ....but earnings growth forecast about 20% pa next three year

I'd say cheap at the moment

Quote from: winner (n) on Oct 13, 2022, 02:30 PMMy spreadsheet says backward PE has averaged 19 last 10 years and 22 last 5 years (and Morningstar data about the same)

Agree forward F23 PE about 21 ....but earnings growth forecast about 20% pa next three year

I'd say cheap at the moment

How do you reach that 40% EPS growth? Lifehealthcare was going to add "low double digit eps accretion" so say 13% plus 6 or 7% organic growth from the business / minor acquisitions.

I'm not too sure how to think about organic growth from the core buisiness as people seem to forget not long ago this had almost no eps/revenue growth for 3 years straight.

Also the relative opportunity set has changed recently. You could buy this on a ~4% earnings yeild and take equity risk for mid single digits growth or you could buy something like a 30y UK government bond yeilding 5% to maturity, or even shorter term stuff with 7 or 8% without stretching into garbage.

In saying that im sure ebos will continue to do well, i'll keep holding onto mine.

Quote from: Gerald on Oct 13, 2022, 08:19 PMHow do you reach that 40% EPS growth? Lifehealthcare was going to add "low double digit eps accretion" so say 13% plus 6 or 7% organic growth from the business / minor acquisitions.

I'm not too sure how to think about organic growth from the core buisiness as people seem to forget not long ago this had almost no eps/revenue growth for 3 years straight.

Also the relative opportunity set has changed recently. You could buy this on a ~4% earnings yeild and take equity risk for mid single digits growth or you could buy something like a 30y UK government bond yeilding 5% to maturity, or even shorter term stuff with 7 or 8% without stretching into garbage.

In saying that im sure ebos will continue to do well, i'll keep holding onto mine.

Maybe I shouldn't look at crap sites like marketscreener

They have F22 eps of 127 increasing to 170 (profit going from 226m to 313m

Sounds good ...what I want to hear so I'll believe it ...isn't that how the investing mind works

Craigs have 2023 EPS at $1.47

Fbar have 2023 EPS at $1.57

Forbar released a report overnight of the top five dividend growers. They have EBOS as one of the highest and most consistent dividend growth stocks at 12 1/2% over the last 10 years.

Whatever F23 EPS is likely to be I like this chart

Gives me comfort that the market is yet to fully price in the increased profits from LifeHealth

The red EPS line is also a 'proxy' for where the share price would be at an PE of about 21

0000ebo.JPG

Quote from: winner (n) on Oct 14, 2022, 09:06 AMWhatever F23 EPS is likely to be I like this chart

Gives me comfort that the market is yet to fully price in the increased profits from LifeHealth

0000ebo.JPG

Yes . Great chart all right . Says it all

Quote from: winner (n) on Oct 13, 2022, 02:30 PMMy spreadsheet says backward PE has averaged 19 last 10 years and 22 last 5 years (and Morningstar data about the same)

Agree forward F23 PE about 21 ....but earnings growth forecast about 20% pa next three year

I'd say cheap at the moment

Hmm - this peaked my interest. You sure your spreadsheet shows 19?

Average EPS over the last 10 years (2013 to 2022, both inclusive) was 91 cents per share.
Current SP is $36.21;

2022 $1.15
2021 $1.13
2020 $1.10
2019 $0.95
2018 $0.99
2017 $0.88
2016 $0.89
2015 $0.78
2014 $0.69
2013 $0.58

Unless there are wrong EPS entries in my spreadsheet (pobody is nerfect) ... am I not sure, how this could result into a different PE other than 39.8?

I really don't want to go 10 years back through annual reports - so, please show me which entry (copied above) is wrong?

Hey BP - I can now see what you mean when you talk 'backwards PE' taking average EPS and applying to current share price. Methodology always going to give a big number isn't it, esp if eps growing. I take it when you talk forward PE you average projected EPS and apply to current share price?

My average PE (about 19 over 10 years or 22 over 5 years) is taking the average of the PE's over time (calculated on monthly closes)

So just different ways of looking at things - whatevr one is comfortable with eh

Your EPS numbers a bit different from mine for the last few years - yours not in A$ are they as they report in that currency.

Quote from: winner (n) on Oct 14, 2022, 02:20 PMHey BP - I can now see what you mean when you talk 'backwards PE' taking average EPS and applying to current share price. Methodology always going to give a big number isn't it, esp if eps growing. I take it when you talk forward PE you average projected EPS and apply to current share price?

My average PE (about 19 over 10 years or 22 over 5 years) is taking the average of the PE's over time (calculated on monthly closes)

So just different ways of looking at things - whatevr one is comfortable with eh

Your EPS numbers a bit different from mine for the last few years - yours not in A$ are they as they report in that currency.

yes (looking at my method to create backward - and forward - PE) and yes (to using NZD for Ebos).

Re PE - how would you otherwise generate a forward PE (given you don't know the future prices, unless of course you take for that the consensus, but then dividing the number of words in the Sunday horoscope by the actual date might give a better forecast;

... and you are right ... your method clearly will generate a different value (but should not matter as long as we compare only apples with apples).

I like with my method, that a dropping share price immediately reduces the PE. With your method it is just a historic set of data (independent of the current share price, which does not really help in the purchasing decision ... but you are right - my method clearly will generate larger backward PE's.

For Ebos I use whatever they report divided by the actual exchange rate, given that I follow the NZX stock. Should however not matter, given that I mainly work with ratios ...

Anyway - good you followed up and clarified that. Cheers.

Nice work.  At the risk of stating the obvious it appears the SP got ahead of itself through 2020 and 2021.  Now we are seeing a reversion to the mean.....is that your interpretation?

Thanks for that.

Quote from: winner (n) on Oct 14, 2022, 09:06 AMWhatever F23 EPS is likely to be I like this chart

Gives me comfort that the market is yet to fully price in the increased profits from LifeHealth

The red EPS line is also a 'proxy' for where the share price would be at an PE of about 21

0000ebo.JPG

EBO ASM had update for first quarter of F23- great start to year

For the three months ended 30 September 2022, the Group recorded revenue of approximately $3.0 billion and Underlying EBITDA of approximately $142 million.

This reflects double-digit organic growth compared to the prior corresponding period as well as
contribution from acquisitions completed in FY22

Can't domuch better than that - forecast EPS of $1.70 might be on the light side

Heck - double digit organic growth and LifeHealth to be added - all for $37 bucks on a PE of about 20

Yes Winner. I like the plus contribution from Lifehealth. I think $1.70 may be on the light side.

Quote from: Shareguy on Oct 27, 2022, 04:28 PMYes Winner. I like the plus contribution from Lifehealth. I think $1.70 may be on the light side.

Best thing about Lifeheaith is that their margins are far superior than the razor thin margins what Ebos usually achieves

Lifehealth goingto make a big difference

Yet to be truly recognised by the market

Quote from: winner (n) on Oct 27, 2022, 04:38 PMBest thing about Lifeheaith is that their margins are far superior than the razor thin margins what Ebos usually achieves

Lifehealth goingto make a big difference

Yet to be truly recognised by the market

Yes they made the comment that Lifecare meeting expectations so going to be no surprises. I agree that the market has not priced in the superior margins.  What are you thinking for EPS?

From Craig's
 
EBOS forecasts that LifeHealthcare will generate A$110-114m in EBITDA in CY2022, representing a 12% CAGR from FY21. The forecast assumes there are no material interruptions from Covid in CY2022. Management note the business has seen a strong recovery as lockdowns have eased in recent weeks and elective surgeries have resumed. Longer term, EBOS is targeting organic growth of c10% per year.
It will be difficult for us to independently assess the performance of LifeHealthcare post acquisition, as it (along with four other recent bolt-on acquisitions in the space with a revenue run-rate of c$80m/year) will continue to be reported as part of EBOS' Institutional Healthcare segment, which up until today's acquisition was chiefly driven by hospital drugs and to a lesser extent hospital consumables. We think, in the interests of good corporate governance and disclosure, that EBOS should split out the reporting of its medical device segment which is now of a material scale. Indeed, the recent trend of EBOS to reduce disclosure (for example, rolling its small but poorly performing consumer products segment into the behemoth of the Community Pharmacy Segment) has reduced visibility of earnings and made it harder for analysts to forecast what is fast becoming a healthcare conglomerate.

Saw old Liz going on about 700% returns over 10 years, very nice indeed but somehow get the feeling she won't have the opportunity to brag about OCA like that for a very long time  ;D

(red) looks a nice Pastel orange line.

Both PFH and EBO showing a similar trend... down and flattening out.

not sure all this EPS stuff but surely the figure is worth only something if its standardise for across the market use.

https://www.investopedia.com/terms/p/price-earningsratio.asp

Quote from: Gerald on Oct 27, 2022, 08:06 PMSaw old Liz going on about 700% returns over 10 years, very nice indeed but somehow get the feeling she won't have the opportunity to brag about OCA like that for a very long time  ;D

Feelings can be wrong :) ... and actually , they often are.

But hey - I guess the fact that you put a swipe against OCA into the EBOS thread to avoid scrutiny  demonstrates that you don't trust your feelings :P .

Fbar have come out with

FY23E EPS $1.71. DPS $1.19
FY24E EPS $1.92. DPS $1.34

Good growth in FY23 Divi due to lifehealth acquisition.

Only 25 percent imputed.

Craig's latest Trading update -
The table below estimates implied organic growth (light green), given the estimated contribution from Life Healthcare to reported results (given EBO's guidance at the time of the acquisition for the business to deliver $110-114m EBITDA or $9.1-9,5m/month). Overall, we estimate EBO is on track to deliver organic growth in uEBITDA of 9.8% in 1H23 and total growth of 36.7

A main competitor Sigma trading on forward 12 month PE of 36

WOW. Is the market finally waking up to what a great company this is.

$41. Will be getting a please explain from the NZX. Large volume NZX normal volume ASX. Can find no reason for it

The company has been admitted into an MSCI small cap index, which triggers a raft of passive buying, said Brad Gordon, director and senior investment adviser at Hobson Wealth Partners.

Quote from: winner (n) on Nov 11, 2022, 03:47 PMThe company has been admitted into an MSCI small cap index, which triggers a raft of passive buying, said Brad Gordon, director and senior investment adviser at Hobson Wealth Partners.

Is this going to be another CEN after Blackrock brought up large.

https://app2.msci.com/eqb/gimi/smallcap/MSCI_Nov22_SCPublicList.pdf

What a great company

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/EBO/402434/383541.pdf

Good to see Ebos stil over $40. 30th of November enters the small cap index. Will we see any more fund buying.....

Nearly 5m traded today.

We did not see $50 winner. Pleasing to see holding over $40 and slowly creeping up. 

This page from the investor day highlights to me why investors should include this great company in their portfolio

. 37921A70-618E-418F-ABF4-E6C35B986244.jpeg

winner() called it at 36....

 
 

And shareguy .... F23 first full year of LifeHealthCare with its much higher margins.

F23 will be a good year and those charts will look even better

Nearly at $45. Some would say expensive. I agree winner another great year coming up with $50 not far off.  Both Craig's and Hobson Wealth have included in their share pics for 2023.

Quote from: Shareguy on Dec 29, 2022, 02:56 PMNearly at $45. Some would say expensive. I agree winner another great year coming up with $50 not far off.  Both Craig's and Hobson Wealth have included in their share pics for 2023.

Not that expensive on F23 expected profits ....possibly $320m plus

Market slowly waking up to what lies ahead

Be good when we talking $60 eh .

Could become the first $100 stock for a while on the NZX ... cool eh

Nice write up

It's free to read

https://businessdesk.co.nz/article/business-of-health/ebos-group-100-years-on-next-stop-asia

Very positive Winner.

Shareguy .....close at $45.70 today ...cool eh

Must be an ALL TIME HIGH

on track to be a $100 share

Quote from: winner (n) on Jan 04, 2023, 05:52 PMShareguy .....close at $45.70 today ...cool eh

Must be an ALL TIME HIGH

on track to be a $100 share

It's going up equally as previous (nearly) hundy club member MFT comes down.  They'll achieve parity soon enough at this rate. 

Quote from: winner (n) on Jan 04, 2023, 05:52 PMShareguy .....close at $45.70 today ...cool eh

Must be an ALL TIME HIGH

on track to be a $100 share

Good old EBO - the only stock I'm confident that Winner owns.
Since the rights issue have been to scared to buy any more on account of valuation. Could regret that decision but pretty full up.
Hope they can find more acquisitions as the market expects it
Hey did MFT ever get to a 100 or did they just flirt with it

Quote from: Fiordland Moose on Jan 04, 2023, 06:01 PMGood old EBO - the only stock I'm confident that Winner owns.
Since the rights issue have been to scared to buy any more on account of valuation. Could regret that decision but pretty full up.
Hope they can find more acquisitions as the market expects it
Hey did MFT ever get to a 100 or did they just flirt with it

Nope, $98 was their peak.  They're currently down a third from that.  Ebos up 22% over that same period.  Over the last four weeks, EBOS gained 9.10 percent.

Have just looked at the close. What a day for Ebos, especially after the US markets. Maybe the market is seeing the value some of us see with the lifehealth acquisition or is it the inclusion in the MSCI small cap index. Decent volume since.

Quote from: Hectorplains on Jan 04, 2023, 08:39 PMNope, $98 was their peak.  They're currently down a third from that.  Ebos up 22% over that same period.  Over the last four weeks, EBOS gained 9.10 percent.

Jeez, -33% MFT v +22% EBO

And other star FPH down about 30% in same time

Big difference but Even though better than nothing the +22% should be higher at this point in time.

LifeHealthCare not priced in ....reminds whenbEbos acquired MasterPet years ago ....took several years for the market to factor that in.

EBOS forecasts that LifeHealthcare will generate A$110-114m in EBITDA in CY2022, representing a 12% CAGR from FY21. The forecast assumes there are no material interruptions from Covid in CY2022. Management note the business has seen a strong recovery as lockdowns have eased in recent weeks and elective surgeries have resumed. Longer term, EBOS is targeting organic growth of c10% per year

Ebos hits record high. Talk of possible inclusion in MSCI standard index.


https://www.nzherald.co.nz/business/market-close-housing-consent-data-buoys-building-stocks/ITFUG4EI5RAYTCD6HROEAIV4IY/

Quote from: Shareguy on Jan 13, 2023, 06:35 AMEbos hits record high. Talk of possible inclusion in MSCI standard index.


https://www.nzherald.co.nz/business/market-close-housing-consent-data-buoys-building-stocks/ITFUG4EI5RAYTCD6HROEAIV4IY/

That'll give EBOS share price a boost and then results announcement and whoosh

Winner of a stock ...

great chart ...

Quote from: winner (n) on Jan 13, 2023, 08:00 AMThat'll give EBOS share price a boost and then results announcement and whoosh

MSCI World Index announcement is 10 February.

Jenny Ruth at BusinessDesk says Ebos may keep the Chemist Warehouse contract

I say Ebos will return the contract and may even pick up another one with Chemist Warehouse (the FMCG one)

https://businessdesk.co.nz/article/infrastructure/ebos-may-keep-the-chemist-warehouse-contract
Possibly paywalled

Quote from: winner (n) on Feb 08, 2023, 07:47 AMJenny Ruth at BusinessDesk says Ebos may keep the Chemist Warehouse contract

I say Ebos will return the contract and may even pick up another one with Chemist Warehouse (the FMCG one)

https://businessdesk.co.nz/article/infrastructure/ebos-may-keep-the-chemist-warehouse-contract
Possibly paywalled

I hope so. This is material for Ebos to win. Currently Ebos has one contract (pharmaceutical)and Sigma the other (FMCG). Ebos current EBITDA from CW is A$40 to $50m which is 8 percent of FY23E EBITDA according to FB. Both contracts expire June 2024.

There is also API who are keen to win this business. Sigmas current contract estimated to be worth A$700 to A$800m so would be great to win.

Would CW put all their eggs in one basket. I doubt it.....

Quote from: Shareguy on Jan 13, 2023, 06:35 AMEbos hits record high. Talk of possible inclusion in MSCI standard index.


https://www.nzherald.co.nz/business/market-close-housing-consent-data-buoys-building-stocks/ITFUG4EI5RAYTCD6HROEAIV4IY/

Just released. It's been included. Should be some strong buying.

Expectations 1H23 $.75 EPS and $.58 divi.

Result out soon.

Quote from: Shareguy on Feb 22, 2023, 08:23 AMExpectations 1H23 $.75 EPS and $.58 divi.

Result out soon.

Pretty good forecast of EPS ...came in at 75 cents v your 75 cents

Second half will see ongoing growth ..cool

Don't care about the divie so not disappointed

Well another good result as expected meeting expectation.  Nothing I can see on Chemist Warehouse contract. I'm sure will come up on earnings call.

Big increase in Ebitda margin with the superior returns from Life Healthcare aquasition.

OUTLOOK

• EBOS is pleased with the strong earnings growth in the first half of FY23 and we expect another full year of profitable growth.
• EBOS' balance sheet is strong and well positioned to pursue growth opportunities

Quote from: Shareguy on Feb 22, 2023, 09:53 AMWell another good result as expected meeting expectation.  Nothing I can see on Chemist Warehouse contract. I'm sure will come up on earnings call.

Big increase in Ebitda margin with the superior returns from Life Healthcare aquasition.

OUTLOOK

• EBOS is pleased with the strong earnings growth in the first half of FY23 and we expect another full year of profitable growth.
• EBOS' balance sheet is strong and well positioned to pursue growth opportunities

We always said watch those margins get heaps better didn't we shareguy .....most didn't believe us.

beleived but forgot to get back in when you warned at 36... busy on ZOOM calls with people very scared back last year in europe..

 

$30m traded today. Nearly got to $46.

MSCI rebalance on the close this coming Tuesday (EBO into Mid-Cap Index)

Xm shares needed for the rebalance

(Edit may need to go double check my source for that, seems a rather high number)

Okay got it...with EBO stepping up from the small to large cap MSCI index, the net amount of buying volume is expected to be 8-12m shares. Very high numbers indeed.

Bunnings moves into petcare
https://www.afr.com/companies/retail/bunnings-launches-biggest-expansion-in-decades-20230224-p5cneg

In its largest category expansion since introducing kitchens nearly two decades ago, Wesfarmers-owned hardware giant Bunnings will launch a specialty pet-care department offering items ranging from food to toys and bowls for cats, dogs and birds.

The department will launch next month and include close to 1000 new items in a major expansion of its current offering of kennels, mats, bedding and pet doors, as Bunnings seeks a larger slice of the fast-growing $10 billion specialty pet sector.

Quote from: Fiordland Moose on Feb 24, 2023, 08:50 PMOkay got it...with EBO stepping up from the small to large cap MSCI index, the net amount of buying volume is expected to be 8-12m shares. Very high numbers indeed.

Wow. High numbers all right

Chemist Warehouse update ....hmmm

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/EBO/412564/395946.pdf

Quote from: winner (n) on Jun 06, 2023, 10:23 AMChemist Warehouse update ....hmmm

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/EBO/412564/395946.pdf

Classic 'supermarket' strategy of squeezing suppliers once they have achieved scale?

Yikes - it looks like it's gone, and not looking promising for a future reversion - https://www.afr.com/street-talk/sigma-healthcare-wins-ebos-s-2b-chemist-warehouse-contract-sources-20230606-p5de8v

Sigma Healthcare Limited (Sigma) is pleased to announce it has signed a binding term sheet with
Chemist Warehouse for the supply of both Pharmaceutical Benefits Scheme (PBS) medicines and
Fast-Moving-Consumer-Goods (FMCG) product for a period of five years commencing on 1 July
2024.
Sigma is the incumbent supplier for FMCG product which currently represents approximately 29% of
Sigma Group net sales revenue. Under the terms of the new supply agreement, the current FMCG
contract will be renewed, and Sigma will secure the additional supply of PBS medicines to Chemist
Warehouse. Sigma estimates that total sales of products to Chemist Warehouse will generate a
minimum of $3 billion in revenue in the first full year of the contract.
Sigma CEO Vikesh Ramsunder commented: "The decision by Chemist Warehouse to award Sigma
this supply contract is wonderful news for our company and our shareholders. The contract allows
us to leverage our highly automated distribution centres and latent spare capacity after multiple
years of investment. We thank Chemist Warehouse for their confidence in our service capability
and awarding of the contract."
The consideration to be provided by Sigma for the award of the supply agreement includes:
• The issue of Sigma shares to Chemist Warehouse at the start of the supply contract. The
shares to be issued to Chemist Warehouse will represent approximately 10.7% (post
issuance) of Sigma's issued share capital and will be issued with a value of $0.642 per
share. This share placement helps align both parties' long-term strategic interests.
• A right for Chemist Warehouse to acquire certain non-core assets from Sigma, which assets
have a value of $24.5 million. If Chemist Warehouse chooses not to acquire those assets,
then Sigma will make a net cash payment to Chemist Warehouse of $24.5 million.
Once fully implemented the terms of the supply contract are anticipated to support Sigma's mediumterm EBIT margin guidance of 1.5% to 2.5%. With the current agreement continuing until June
2024, there is no impact on Sigma's existing FY24 EBIT guidance of $26 million to $31 million.
"Sigma has worked tirelessly the past 12 months to build a stronger company and to significantly
improve our operational performance for the benefit of all customers. Securing this Chemist
Warehouse contract means we will now have real scale and momentum moving into the future,'' Mr
Ramsunder said.

Interesting that TA gave a clear warning something wasn't right.
EBO last traded at 31.5 times last years earnings, so has been priced for very strong ongoing growth.  Hmmm

Quote from: Shareguy on Feb 08, 2023, 08:42 AMI hope so. This is material for Ebos to win. Currently Ebos has one contract (pharmaceutical)and Sigma the other (FMCG). Ebos current EBITDA from CW is A$40 to $50m which is 8 percent of FY23E EBITDA according to FB. Both contracts expire June 2024.

There is also API who are keen to win this business. Sigmas current contract estimated to be worth A$700 to A$800m so would be great to win.

Would CW put all their eggs in one basket. I doubt it.....

Some $40m to $50m hit for EBOS maybe

Looks to me that Sigma have brought the business. Still a great company in my opinion. May be a good buying opportunity🙏

Sigma has market cap A$670m and is on the ASX. Maybe Ebos should buy them. Probably would not get past Com Com.

Disc, I have no knowledge of any takeover.

Quote from: Shareguy on Jun 06, 2023, 11:53 AMSigma has market cap A$670m and is on the ASX. Maybe Ebos should buy them. Probably would not get past Com Com.

Disc, I have no knowledge of any takeover.

Sigma up 21.6% this morning.

Quote from: Basil on Jun 06, 2023, 11:14 AMInteresting that TA gave a clear warning something wasn't right.
EBO last traded at 31.5 times last years earnings, so has been priced for very strong ongoing growth.  Hmmm

That TA was a bit spooky eh ...esp seeing overall markets weren't doing to bad

Book value $2.2b or $11.80 share / NTA negative $4.05 share as mountains of intangibles / Debt >$1 billion

But this is Ebisu so no worries

Craig's a bit downbeat about EBO future ... in BusinessDesk

Craigs' analysts said the loss of the earnings from Chemist Warehouse would be hard for the company to replace and they also forecast a near-term cut of 10% in ebitda which would increase over time, given Ebos' prospects for market growth are reduced.

Craigs said today

EBOS Group (EBO) has been dealt a material and surprising blow with the loss of its Chemist Warehouse (CW) Pharmaceutical supply contract from 1 July 2024 to its largest competitor, Sigma (SIG.ASX). We estimate current EBITDA contribution of ~A$60m–$70m (~11% of FY23 EBITDA). While disappointing and we make material earnings downgrades (medium-term EBITDA down -10–12%), the core defensive growth story remains intact. EBO is a well-run, diversified, defensive business with a robust organic growth outlook (with upside from M&A). EBO trades on ~21x FY25 (new normal) EPS, a ~+25% premium to the market median and ahead of its own history. We view this valuation premium as justified for a high quality business with a proven track record of delivery. Retain NEUTRAL with a decreased target price of NZ$37.70.

MorningStar a bit more negative: "We raise our fair value estimate for no-moat Sigma by 27% to AUD 0.80 and decrease our fair value for narrow-moat Ebos by 7% to AUD 27, or NZD 29.50 at current exchange rates......"

This guy reckons EBO could get in ASX200;soon ..that be good

https://arichlife.com.au/10-stocks-that-could-soon-enter-the-sp-asx-200-index/

Blackrock become a SSH

Probably no big deal as Blackrock own most things in this world.

And some say we should be worried as Blackrock takes over the world.

Good to see back over $38.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/EBO/416863/401053.pdf

• Results underpinned by organic growth and substantial contribution from prior year acquisitions reflecting the defensive and diversified nature of Group earnings
• Revenue of $12.2 billion (up 14.0%)
• Underlying EBITDA of $582.0 million (up 33.2%)
• Underlying NPAT of $281.8 million (up 23.0%)
• Underlying EPS of 147.9 cents (up 14.1%)
• Final dividend declared of NZ 57.0 cents per share, bringing total dividends declared for the
year to NZ 110.0 cents per share (up 14.6%)
• Continued strong performances from both our Healthcare and Animal Care segments:
o Healthcare Underlying EBITDA up 32.7% driven by organic growth and the contribution from acquisitions completed in FY22; LifeHealthcare performed in-line with expectations
o Animal Care Underlying EBITDA up 24.0% reflecting strong organic growth in our key brands and the benefits from the investment in our new pet food manufacturing facility
• Underlying operating cash flow of $404.7 million (up 39.1%) reflecting strong earnings growth and disciplined net working capital management

Thoughts

FY23 was another good year with eps and divi +14%
Growth is slowing, looking at 2H
Cost cutting and aquasitions to save the day going forward. 
Need some large aquasitions or several small ones to make up for the loss of the Chemist Warehouses contract. Craig's say creates a $75m drag on FY25 EBITDA.

Think its a hold based on current price.

Profits up in Q1 ...that's good

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/EBO/420409/405653.pdf

With a PE of 23.40 they need to be.

EBITDA growth is tracking slightly below expectations – largely due to margins as the EBITDA margin is +8bps YTD, while the market is expecting 23bps for the full year.

EBOS buying GXH eh - lucky I've got lots of one of those  8)

I think it is more likely to be Australian Greencross Vets,otherwise they would have said Green Cross Health.

Quote from: lorraina on Nov 16, 2023, 10:23 AMI think it is more likely to be Australian Greencross Vets,otherwise they would have said Green Cross Health.

You are so smart Percy!  8)

A decent aquasition if it goes ahead to mitigate the loss of CW contract.

TPG, which took Greencross private in 2019 at $5.55 per share, sold a 45 per cent stake in the pets and vets business to AustralianSuper and the Healthcare of Ontario Pension Plan in early 2022. That transaction valued Greencross at more than $3.5 billion. Greencross' latest accounts, for the 12 months to June 26, show revenues climbed from $1.3 billion to $1.6 billion. Net profit after tax fell from $88 million in 2021 to $83 million

Likely in my opinion that a CR will be announced to fund this acquisition, if it goes ahead.

Have been looking at the last capital raise in 2021 to fund the Lifehealthcare business. For that CR a discount to the closing price of 5.5 percent was offered.

Closing price for the trading holt for Green Cross is $38.60. Based on same 5.5 percent discount would be $36.67 for the new shares.

I note the LifeHealthcare acquisition was heavily oversubscribed. Its non underwritten retail offer wanting $105m raised $412m.

There is a lot of funds sitting on the side lines waiting for good opportunities. Will be interesting

Happy to watch from the sidelines.  Petcare has been on a real rollercoaster ride.  When the pandemic hit there was an explosion in demand for pets as people were desperate to nourish their souls in deeply troubling times.  Prices for popular breeds of puppies went ballistic and litters sold out sight unseen for many thousands of dollars each.  It drew a lot of new breeders into the industry, (I even thought about becoming a breeder myself...of you guessed it, Beagles), but the market has now changed a lot and many of them are now stuck with litters they can't sell as demand has waned badly and supply has shot through the roof. During the pandemic. people spent all sorts of money on their new much adored pet, fueled on by vast amounts of money printing by the Govt and an inability to spend money elsewhere with lockdowns.   

Fast forward nearly 4 years and we have heaps of relatively new pet owners who had no idea that their pet entailed a level of expense not entirely dissimilar to having another child, especially if he's a big boy like my dog Tony the Pony who, frankly, eats like a horse.   Combine that with a cost-of-living crisis and some pet owners have buyers or adoption remorse, (not me, I love my new best mate).

You can graphically see this roller-coaster if you do some research into shares that specialise in all things pet.  Start with Chewy and Bark and have a look at their share price history.  I'm not sure all the decay in spending has flowed through into FY23 earnings and we'll see more contraction in pet spend in FY24 and beyond as the cost of living crisis really bites hard.  The risk here with this acquisition as I see it is that the tail could wag the dog.  The rights issue might be so big and so many shares issued that it's not really eps accretive even if they think it is based on recent earnings.

I am sure Ebos are well aware of the issues in this sector,as they already own the other half of Animates, and own two pet food manufacturers in VitaPet and Blackhawk.

ps.A great number of pills and onitments used by humans are also used for animals.

Ebos had no problem raising $840m capital for Life Healthcare.

Small discount at $34.50

And share price headed up to $45 odd

Will need a decent cap raise for this acquisition

Maybe at $36.50 this time. Even Sybil's will probably take part

And the share price wil head back to $45/$50 when it's plain to see the profits coming through as expected

All good stuff eh

Good thing acquiring another petcare business is that petcare margins are a lot higher than health

H123 showed petcare ebitda margin ~17% v healthcare ~4%

More petcare will help overall group margin ...good stuff

In 2011 after Ebos forked out $109m and acquired Masterpet as a means of expanding beyond healthcare many market watchers said what 'surely not ..."what the heck, pet food of all things" reaction was that Masterpet seemed to hold the shareprice back before punters realised it was a pretty good deal.

The Masterpet CEO was quoted at the time " Ebos is a great fit for our staff, our customers and our suppliers.

Together we share many of the core competencies required to be successful in a market focused on health professionals, whether that's pets or people, doctors or veterinarians."

And the rest is history

Animalcare revenues now are A$560m and A$100m ebitda and the to be acquisition is a big step change on this

Quote from: lorraina on Nov 18, 2023, 12:19 PMI am sure Ebos are well aware of the issues in this sector,as they already own the other half of Animates, and own two pet food manufacturers in VitaPet and Blackhawk.

ps.A great number of pills and onitments used by humans are also used for animals.

My dog gets a skin rash that's quite common for the breed.  Wish it was as you suggest.  My vet suggested I try a brand of antihistamine tablet that were only about $20 for 100 tablets, (20 cents per tablet).  She said, in about 30% of cases they work.  Unfortunately, that didn't work for Tony so he's on a far more expensive tablet, (25 times the price), that's still under patent and they're $5 each from the vet.  He needs 1 a day.  Just as well I have deep pockets lol 
They come off patent in 2026 and I'm looking forward to the generic substitute pricing.

 AFR says Greencross valued at $3.5billion ...that's a big number ....even for Ebos

FB says that CW contract is a loss of $75m to $80m EBITDA from 2024.

If this acquisition goes ahead not only does it replace the CW contract but replaces it with a much higher margin business.

Ebos FY23 delivered $518m EBITDA from Healthcare and $98m from animalcare.

As Winner has pointed out H123 showed petcare ebitda margin ~17% v healthcare at 4 %

This is going to be a huge CR even for Ebos. You only need to look at the share price growth over the last 10 years to see how well this company has done.

Some say it's expensive but I reckon quality is worth a premium. Also something to be said about sleeping well without worry.

Disc one of my larger positions that I'm keen to add more at the right price.

Trading halt extended till tomorrow.  Emmmm, I wonder what the institution's think of the deal 🤔...

https://www.nzx.com/announcements/421919

Extended for another day.  Institution's not keen on the deal?

https://www.nzx.com/announcements/421998

Quote from: Average_Punter on Nov 21, 2023, 09:05 AMExtended for another day.  Institution's not keen on the deal?

https://www.nzx.com/announcements/421998

Maybe Sybos not to keen to pump half a billion bucks into a petcare business from capital raise

But you'd hope that Ebos would have sorted that out with them before going too far down the track

Are Ebos after the whole of Greencross or just taking TPGs remaining share ...after all didnt TPG sell down a large chunk to somevsuperfunds not that long ago.

EBOS (https://www.afr.com/street-talk/ebos-fires-up-bumper-rights-issue-at-12pc-discount-for-greencross-buy-20231121-p5elno)in $3.75 billion deal to buy Greencross; Macquarie, UBS on raise

Sarah Thompson, Kanika Sood and Emma Rapaport
Nov 21, 2023 – 6.46pm

Trans-Tasman pharma distributor EBOS will pay $3.75 billion to acquire TPG Capital-backed pets and vets business Greencross, details of which were first revealed by this column last week.

Street Talk understands EBOS will seek to raise almost $2 billion, pegged at a 12 per cent discount to the TERP via joint lead managers UBS and Macquarie. TPG Capital, AustralianSuper and Canadian pension fund HOOPP are expected to roll in alongside management. However, the scrip component would mean the trio would probably end up as shareholders in EBOS.

EBOS's largest investor, Zuellig, was understood to be supportive of its big M&A bet and would tip into the rights issue.

It is being advised by Macquarie Capital's David Mustow, while Lazard Australia and UBS have also been in its tent. Greencross's owners have been working with Jefferies' Michael Stock.

The raise comes five days after Street Talk revealed EBOS was closing in on a deal to buy Greencross – last valued at $3.5 billion when AustralianSuper and Canada's HOPP acquired a 45 per cent stake from TPG Capital early last year. The PE firm plucked Greencross off the ASX boards in early 2019 for $675 million equity value.

Greencross lists 150 veterinary clinic locations on its website and also owns retail chain Petbarn. It booked $1.6 billion revenue and $83 million after-tax profit in the 12 months to June 26, according to accounts filed with the corporate regulator.

EBOS has made its move after Aussie vets roll-up VetPartners – with $104 million pro forma adjusted EBITDA for 2023 – fetched a $1.4 billion price tag from Swedish private equity firm EQT Partners, as revealed by this column.

It's an especially sweet victory for EBOS, which in 2015 worked through an auction for Greencross. It has had to wait eight years to get its hands on the business.

EBOS's biggest moneymaker – on a gross operating revenue basis – is still pharmacy, bringing in 41 per cent, while animal care is the smallest at 12 per cent. This should change with the company a step away from owning Greencross

Quote from: Hectorplains on Nov 21, 2023, 11:00 PMEBOS (https://www.afr.com/street-talk/ebos-fires-up-bumper-rights-issue-at-12pc-discount-for-greencross-buy-20231121-p5elno)in $3.75 billion deal to buy Greencross; Macquarie, UBS on raise

Sarah Thompson, Kanika Sood and Emma Rapaport
Nov 21, 2023 – 6.46pm

Trans-Tasman pharma distributor EBOS will pay $3.75 billion to acquire TPG Capital-backed pets and vets business Greencross, details of which were first revealed by this column last week.

Street Talk understands EBOS will seek to raise almost $2 billion, pegged at a 12 per cent discount to the TERP via joint lead managers UBS and Macquarie. TPG Capital, AustralianSuper and Canadian pension fund HOOPP are expected to roll in alongside management. However, the scrip component would mean the trio would probably end up as shareholders in EBOS.

EBOS's largest investor, Zuellig, was understood to be supportive of its big M&A bet and would tip into the rights issue.

It is being advised by Macquarie Capital's David Mustow, while Lazard Australia and UBS have also been in its tent. Greencross's owners have been working with Jefferies' Michael Stock.

The raise comes five days after Street Talk revealed EBOS was closing in on a deal to buy Greencross – last valued at $3.5 billion when AustralianSuper and Canada's HOPP acquired a 45 per cent stake from TPG Capital early last year. The PE firm plucked Greencross off the ASX boards in early 2019 for $675 million equity value.

Greencross lists 150 veterinary clinic locations on its website and also owns retail chain Petbarn. It booked $1.6 billion revenue and $83 million after-tax profit in the 12 months to June 26, according to accounts filed with the corporate regulator.

EBOS has made its move after Aussie vets roll-up VetPartners – with $104 million pro forma adjusted EBITDA for 2023 – fetched a $1.4 billion price tag from Swedish private equity firm EQT Partners, as revealed by this column.

It's an especially sweet victory for EBOS, which in 2015 worked through an auction for Greencross. It has had to wait eight years to get its hands on the business.

EBOS's biggest moneymaker – on a gross operating revenue basis – is still pharmacy, bringing in 41 per cent, while animal care is the smallest at 12 per cent. This should change with the company a step away from owning Greencross

Thanks for posting

12 percent discount to terp sounds good

It's off


https://www.nzx.com/announcements/422075

Quote from: Shareguy on Nov 22, 2023, 08:34 AMIt's off


https://www.nzx.com/announcements/422075

Probably a good thing. Touted metrics were eye wateringly expensive.

Quote from: Mos on Nov 22, 2023, 11:25 PMProbably a good thing. Touted metrics were eye wateringly expensive.

Something smells a touch fishy about the whole thing...and I don't think it's the pet food either. 

Quote from: Hectorplains on Nov 22, 2023, 11:28 PMSomething smells a touch fishy about the whole thing...and I don't think it's the pet food either. 

Finally, some questions  (https://businessdesk.co.nz/article/markets/leaks-hurt-ebos-deal-but-they-didnt-sink-it) being asked about how the hell the details of this deal ended up in such detail with AFR and why ASX are turning a blind eye to this?  Ebos are but one example of the issue. ASIC commissioned a report on this problem - nearly a decade ago! That found the number of leaks reported in the media was "significant" in Australia between 2006 and 2013.  However; their rules cover listed companies, not the bankers, the analysts or other interested parties. 10 years and they've done what about it? 

Anyway - it was not the media leak that sunk the deal.  Another leak has identified that instos would not support the couple of billion needing to be raised. 

Talk in the Australian that Ebos are in talks to buy Paragon care. PGC on the ASX

https://paragoncare.com.au/sites/default/files/2023-09/ParagonCare%2BAnnual%2BReport%2B2023%2BOnline%2BFA_270923-compressed.pdf

does not this juggernaut ever slow down?

Seems a bit odd going from Greencross $3,500 mil [$3.5 bil] down to a $145 mil PGC deal.?
PGC's revenue of $308 mil will not add much to EBO's $12.38 billion revenue.
If it goes through PGC must have an agency EBO want.But not a meaningful acquisition in my opinion.

Quote from: Shareguy on Dec 05, 2023, 06:45 PMTalk in the Australian that Ebos are in talks to buy Paragon care. PGC on the ASX

https://paragoncare.com.au/sites/default/files/2023-09/ParagonCare%2BAnnual%2BReport%2B2023%2BOnline%2BFA_270923-compressed.pdf

Is your reference the article in The Australian yesterday?  The headline  ("EBOS shifts focus from jilted Greencross to Paragon Care") didn't really tally with the article... which describes several parties as potentially being interested in Paragon.  Paragon seems to attract these kind of rumours fairly frequently...

Yes only $15m NPAT FY23 so not a major. Hopefully another good little bolt on. There is still talk that Ebos are still working on a deal to buy the other half of animates they don't own from Greencross.

Quote from: Hectorplains on Dec 05, 2023, 07:38 PMIs your reference the article in The Australian yesterday?  The headline  ("EBOS shifts focus from jilted Greencross to Paragon Care") didn't really tally with the article... which describes several parties as potentially being interested in Paragon.  Paragon seems to attract these kind of rumours fairly frequently...

Yes I see that there is reportedly multiple party's that have shown interest. Might all be just speculation.  Get your point re potentially. The Australian often seems to get the inside running on these deals , but yes just speculation.

whats the war chest ....  better check the last FA...

https://smallcaps.com.au/chemist-warehouse-sigma-healthcare-merger-asx-powerhouse/

Not good news for Ebos. If approved will be more competition for Ebos on acquisitions. Given the relationships surprised Ebos won the CW contract at all.

Quote from: Shareguy on Dec 13, 2023, 02:21 PMhttps://smallcaps.com.au/chemist-warehouse-sigma-healthcare-merger-asx-powerhouse/

Not good news for Ebos. If approved will be more competition for Ebos on acquisitions. Given the relationships surprised Ebos won the CW contract at all.

There may be an upside for Ebos.
https://www.afr.com/companies/retail/sigma-could-shed-customers-after-chemist-warehouse-merger-20231212-p5eqt6

Chemist Warehouse's proposed listing with Sigma Healthcare (https://www.afr.com/chanticleer/is-the-backdoor-the-new-way-to-the-asx-boards-20231211-p5eqo6), creating an $8.8 billion listed retail giant, will likely lead to a loss of independent pharmacies buying from the company's wholesaler business and could be blocked by competition regulators.

Jefferies analyst David Stanton told clients in a note that most pharmacies use two wholesalers. Should this deal complete, Dr Stanton pharmacists who use Sigma as a wholesaler could look elsewhere.

"Independent pharmacies may switch wholesalers at the end of contracts, and in the short term may favour a different pharmacy wholesaler," Dr Stanton said.

"We believe there is the potential for loss of independent pharmacists in the medium term who use SIG as a wholesaler, as these pharmacists may not wish to use a combined entity that is a potential retail threat to their business."

Quote from: KW on Dec 13, 2023, 05:36 PMThere may be an upside for Ebos.
https://www.afr.com/companies/retail/sigma-could-shed-customers-after-chemist-warehouse-merger-20231212-p5eqt6

Chemist Warehouse's proposed listing with Sigma Healthcare (https://www.afr.com/chanticleer/is-the-backdoor-the-new-way-to-the-asx-boards-20231211-p5eqo6), creating an $8.8 billion listed retail giant, will likely lead to a loss of independent pharmacies buying from the company's wholesaler business and could be blocked by competition regulators.

Jefferies analyst David Stanton told clients in a note that most pharmacies use two wholesalers. Should this deal complete, Dr Stanton pharmacists who use Sigma as a wholesaler could look elsewhere.

"Independent pharmacies may switch wholesalers at the end of contracts, and in the short term may favour a different pharmacy wholesaler," Dr Stanton said.

"We believe there is the potential for loss of independent pharmacists in the medium term who use SIG as a wholesaler, as these pharmacists may not wish to use a combined entity that is a potential retail threat to their business."

Interesting thanks KW

•   The Australian Dataroom publication suggested Paragon Care has hired Rothschild & Co as a defence adviser among chatter in the market it has been in the cross hairs of EBOS. There's talk in the market that Paragon has bidders interested in the business at 40c a share. Paragon Care shares closed up 2.3 per cent to 22c on Wednesday. Earlier, Paragon had said that it had not received approaches from EBOS, while both groups declined to comment on Wednesday. Its market value is $147m. Paragon Care operates in the areas of specialty diagnostics, specialty devices, capital and consumables, and service and technology under brands such as Designs for Vision, Electro Medical Group, Specialist Medical Supplies and Immulab. Paragon Care's net profit has increased 61 per cent to $15.6m in the year to June, but its share price has failed to perform after its performance has disappointed investors in the past, particularly with its mergers and acquisitions strategy. EBO shares closed flat yesterday at NZ$35.21...25% off the highs earlier in the year. https://www.theaustralian.com.au

Increasing shareholding in Transmedic to 90%

Going to be "immediately marginally EPS accretive."......that's good

Stryker, the largest customer of EBOS' medtech distribution division (responsible for 20% of group EBITDA), yesterday announced double digit YoY revenue growth in Australia for the Dec-qtr, in-line with prior quarters. With the community pharmacy division lapping tough comps, EBOS' medtech/hospital division is increasingly taking over as a key growth driver. Stryker's update indicates that the good momentum seen in EBOS' medtech/hospital business is continuing....EBO closed yesterday at $37.48 and continues to trade in a fairly tight range of $35-$38.

Good result as expected. Its trading update for January suggests it is on track to deliver FY24e EBITDA c.2% ahead of consensus

The key in my mind is how they intend to replace the loss of CW contract from July 1 2024. Shares I think currently trading about right with a PE of 23. They have $300m of headroom for bolt ons. Increased divi still only represents a payout of 66 percent.

Craigs say


Loss of Chemist Warehouse contract looms large
Chemist Warehouse will cease being an EBOS customer on July 1, 2024. This will leave a hole in EBOS' business amounting to $2bn in revenue and $75m in EBITDA. To help offset this EBOS has several strategies: i) add c.$300m of new Community Pharmacy revenue from new accounts, which the 1H24 result suggests it is well on its way to achieving (ii) accelerate capital investment to support organic growth in other areas of the business, including Contract Logistics and Institutional Healthcare (note that 1H24 capex was elevated at $66m to fund construction of six new facilities which, when completed, will increase throughput capacity by c.25%) (iii) continue to look for bolt-on M&A, with one deal likely in SE Asia imminently and (iv) reduce operating costs by $25-50m, with most of these savings to be realised in FY25. While the sum total of these initiatives will not fill the $75m EBITDA hole left by Chemist Warehouse, we currently estimate EBITDA will decline by c.$36m in FY25e.

So need to find $36m...

The Australian saying overnight that Greencross takeover might be back on.

suggesting that TPG Capital may look to drop the price

Jeez EBO shareprice down to $33.59 ......lowest since mid 2021

Seems unloved at the moment

Time to buy some?

Speculation that EBOS could exit MSCI standard index at May rebalance.

Quote from: Shareguy on Apr 12, 2024, 02:10 PMSpeculation that EBOS could exit MSCI standard index at May rebalance.

Sounds like buy in May and store away ;) ;

Just out from Craigs.

EBO – INDEX WATCH - The pricing period for the May MSCI rebalance ended yesterday - on CIP estimates, the market cap of SPK was above MSCI's Global Minimum Size Reference (i.e. the cutoff at which EBO is deleted) on 3 of 10 days. On 6 days, the market cap of SPK was below our estimated cutoff but within 1% of our estimate and well within the normal margin of error. It could easily go either way, but we would estimate a circa 35% chance that EBO remains in the index. The MSCI announcement will be made on the morning of 15 May NZT with the rebalance effective at market close on 31 May.

Also great article in Business Desk on how well the ceo is regarded and the compounded wealth that has been generated

Quote

Since Cullity had been Ebos' CEO, underlying earnings per share (EPS) increased from A90 cents in 2018 to A$1.48 in 2023.

Dividend per share (DPS) in 2018 was 69c, while in 2023 it was $1.10.

Fund manager claims good buying currently...

Still some bad comparable results to wash through, assuming no CW revenue from June, full year should be fine then some down numbers? Probably a over simplified way to look at it, but the stock seems to trade in line with earnings direction, so why not wait another year for earnings to bottom before taking another look.

I'm sure winner or some others have some charts on valuation.

Big day tomorrow.

https://www.msci.com/index-methodology

Not good news. It's going to be deleted. Estimated 13m shares involved.

Any other changes in the MSCI rebalance ?

No, Ebos was the only one .

Quote from: Shareguy on May 15, 2024, 11:03 AMNot good news. It's going to be deleted. Estimated 13m shares involved.

What's not to like about this news?

While it might be bad news for short term holders with the attention span of a fruit fly - it sounds like great news for buyers.

Just another amazing opportunity to game the Index funds ...

Quote from: BlackPeter on May 15, 2024, 03:55 PMWhat's not to like about this news?

While it might be bad news for short term holders with the attention span of a fruit fly - it sounds like great news for buyers.

Just another amazing opportunity to game the Index funds ...

Not good news from the point of view that there will be one less NZX company in the index (5 left) and there will be some short term pressure to sell the estimated 13m shares.

Agree maybe a good opportunity for buyers. A great company with a history of superior returns.

The Australian Federal Budget contained some good news for EBO – PBS funding for the FY24 year (to June) is now expected to be up 4% YoY to $17.7bn, and a full 12% higher than the budget a year ago (i.e. which was for a -7% decline). While the growth in overall PBS funding is skewed to hospital pharmaceuticals (reflecting increased funding for more widespread 'super drugs'), EBOS is the best positioned of all the wholesalers to capture this given its dominant position in wholesaling drugs to hospitals. While the 4% growth in PBS funding for the year is bang in line with our estimates, we have increased confidence that EBO will meet FY24 consensus estimates – at a critical time given the c.$450m overhang of stock as it exits the MSCI mid cap index May 31.

A good opportunity on Friday. $33.05.  Back up Tuesday I reckon.

Well its not a done deal...

https://www.afr.com/companies/retail/mega-chemist-warehouse-deal-will-substantially-lessen-competition-20240612-p5jl7y

ASX favourite in this sector is currently PGC as the merger with CH2 has now been completed, PGC management replaced by CH2 management, and the company is now a decent sized $680M market cap with $3B of revenue and an international market.  

FB latest note today says they expect a solid result. Outperform $42. Results next week.  Will be interesting to see how they have done replacing the CW contract. 

Craig's latest out today

Healthy result ahead. Trading up ahead of anouncement

We expect EBO will deliver revenue and earnings growth 1% ahead of consensus when it reports its FY24 result on 21 August. We anticipate the small beat will be driven by the community pharmacy segment, which we expect will deliver revenue growth of 7% (vs consensus 6%), underpinned by a pick up in PBS spending growth to 9% YoY in 2H24 (up from 4% in 1H24) and continued market share gains from Sigma. We also expect to see an acceleration in contract logistics revenue in 2H24 following the opening of EBOS' new facility in Sydney late in 1H24, with demand growth supported by large pharmaceutical companies increasing inventory levels held in Australia following an accord with the Australian Government signed in 2022. We expect the institutional healthcare segment will deliver strong growth, albeit decelerating c.2% HoH in-step with slowing growth in high tech s

Great result with eps and dps increased as it has done every year for the last 10 years.

Outlook for FY25 underlying ebitda of $575 to $600m. When you consider the loss of the CW contract, this is good. Plus there is a good chance they will make another acquisition to close the gap. FY24 was $624m underlying ebitda.

Quality company

Quote from: Shareguy on Aug 21, 2024, 01:18 PMGreat result with eps and dps increased as it has done every year for the last 10 years.

Outlook for FY25 underlying ebitda of $575 to $600m. When you consider the loss of the CW contract, this is good. Plus there is a good chance they will make another acquisition to close the gap. FY24 was $624m underlying ebitda.

Quality company

Well, yes and no.

While I realize that people like them and are happy to pay a premium price, this is something which can change as well.

Liabilities to assets consistently high (61%) - and while most of these liabilities are basically the credit their suppliers give them while they wait for payment (I am wondering about their terms of payment), this is something just asking for a competitor to jump in and offer better payment conditions instead. Bit dangerous in times of product shortages.

Their NTA is negative. Lots of goodwill on the books. Just wondering whether their brands are really that strong?

Their dividend yield is underwhelming (3.2%) and in NZ not even fully imputed (just 25%). Something for investors who are happy with a substandard income and who like to pay more taxes for their income than they otherwise would need to.

Short term outlook with some uncertainties (big customer jumped ship)- but even if we assume they keep flourishing and growing as in the past ...  their 3 yrs forward PE of 23.2 (based on analyst consensus) combined with an earnings CAGR of 7 is, while ok-ish for a quality company still priced for perfection.

Not my understanding of a good investment, but hey - yes, it clearly is a company priced as a quality company. These things can go well for long periods ... and then they might change.

Quote from: BlackPeter on Aug 22, 2024, 11:29 AMWell, yes and no.

While I realize that people like them and are happy to pay a premium price, this is something which can change as well.

Liabilities to assets consistently high (61%) - and while most of these liabilities are basically the credit their suppliers give them while they wait for payment (I am wondering about their terms of payment), this is something just asking for a competitor to jump in and offer better payment conditions instead. Bit dangerous in times of product shortages.

Their NTA is negative. Lots of goodwill on the books. Just wondering whether their brands are really that strong?

Their dividend yield is underwhelming (3.2%) and in NZ not even fully imputed (just 25%). Something for investors who are happy with a substandard income and who like to pay more taxes for their income than they otherwise would need to.

Short term outlook with some uncertainties (big customer jumped ship)- but even if we assume they keep flourishing and growing as in the past ...  their 3 yrs forward PE of 23.2 (based on analyst consensus) combined with an earnings CAGR of 7 is, while ok-ish for a quality company still priced for perfection.

Not my understanding of a good investment, but hey - yes, it clearly is a company priced as a quality company. These things can go well for long periods ... and then they might change.

You make some interesting points BP. The 25 percent imputation is the reality of most sales outside NZ. I don't hold for the divi. I hold for the appreciation over time in the share price. On my buy price I am actually getting a very good divi, but yes understand where your coming from.

If you look at the historical return over a long period you will see that the increase in eps year on year is spectacular. When you see it displayed in a graph you really appreciate that Ebos stands out as the best consistent return out of the whole NZX. I can't recall any other company with such consistency?

When you consider Another quality company FPH is trading on a FY24 actual PE of 67 yet EBOS is 21.3. Is FPH over priced? Does it justify that higher PE. A PE of 21.3 for a proven performer seems low when you compare the two.

So let's look at the latest result.

EBITDA up 7.3%. 5% of earnings growth was organic (after a headwind of -3% from Covid-related earnings streams tailing off) and 2% was from M&A (mainly an 11 months contribution from the Superior Pet Food acquisition)

Strong revenue growth in Institutional Healthcare (+11.5%) and Community Pharmacy (+6.8%) was underpinned by strong structural growth in high value speciality medicines and market share gains. Share gains have largely come at the expense of Sigma reflecting, respectively: i) Sigma's sale of its hospital pharmacy distribution business to CH2, a deal which took some time to be approved by regulators, during which time some customers switched to EBOS and ii) Sigma losing some independent pharmacy customers following the announcement of its intent to merge with Chemist Warehouse

Risks to guidance include the outcome of the maiden wholesaler agreement with the Australian Government (due next 4-8 weeks) and organic growth slowing.

The ceo is a proven performer and has a history of performance. Yes FY25 might be the first decline in eps for many years. Then again the gap is not that great and I would be surprised if we don't see some acquisitions that could easily make up the difference.

According to the presentation Ebos has increased eps every year for over 10 years that's 10.3% CAGR. Yes in the future it might be lower but no one really has any idea and for me previous results speak for themselves.

For me it's a core stock that I have no concerns about.

Fair enough - people assess investments from different perspectives ... even if I am not sure whether the historic view (I paid less for the share and therefore my dividend yield is much better) makes a lot of sense.

I always assess investments with a view into the future. If they paid me in the past say 20% pa - great, buy the CEO a drink ... but the only thing which matters from here is what is the investment paying me in future.

Why? Well, assuming the future looks slow, then it doesn't help to dwell on an amazing past - it's just that I can use the invested money much better with a different investment which promises a good future income.

If I look at Ebos - SP went up in the last decade from $9.56 (24/8/14) to $36.40 (today). Not bad, this is a CAGR of nearly 14%. If I add the meagre 3% dividend (just assuming years before have not been better), then this is a return of something like  17% pa. Just one observation (because its anyway in my spreadsheet): earnings CAGR in the last decade was only 7.4, i.e. SP grew twice as fast as earnings. Hmm.

If we take the decade before - SP went from $3.34 (22/8/04) to $9.56; Not quite as good, but still 11% plus divie, so say 14% per year.

I can see why you consider this a good (past) investment.

If you assume that things stay as they have been and EBOS sits in another 10 years at $100, then it makes a lot of sense to hold.

Just not so sure about the latter. Too lazy to pull out old (20 yrs old) annual reports, but I am quite sure that PE for Ebos did increase not just over the last decade (as per above). Anybody knows - winner?

And this is the problem: If part of your SP increase is PE expansion, then this is something which will end at some stage and then there will be a rough awakening.

But given that the future is uncertain (with the exception of death and taxes) - I certainly do wish you that any PE reduction only comes after the SP is not any more relevant for you.

Ah yes - and re FPH. While I obviously don't know either whether they are too dear (given that this is as well dependent on assumptions about the future), what I can say is that I didn't manage to find any set of credible growth and earning assumptions which would justify their current Share Price. Anyway - their future just must be incredible :) , but this is anyway a different thread;

Anyway - good discussion.

BlackPeter ..... not updated for F24 but here's a chart going back to 2007 showing EPS and share price

Over duration of chart PE has been 19 and as can be seen been pretty much that until 2020 and then the world went stupid and the share price went over $40 ..and higher PE ...and that chart prompted me to reduce holding..... and you can guess when I started buying

With F24 of $1.57 EBO prob reasonably priced today based on historical trends

I'll update sometime soon

IMG_5896.png

Quote from: winner (n) on Aug 22, 2024, 06:56 PMBlackPeter ..... not updated for F24 but here's a chart going back to 2007 showing EPS and share price

Over duration of chart PE has been 19 and as can be seen been pretty much that until 2020 and then the world went stupid and the share price went over $40 ..and higher PE ...and that chart prompted me to reduce holding..... and you can guess when I started buying

With F24 of $1.57 EBO prob reasonably priced today based on historical trends

I'll update sometime soon

IMG_5896.png

Thanks Winner. The chart is " beautiful". If only we had more NZX stocks with a chart like this.

Quote from: BlackPeter on Aug 22, 2024, 05:20 PMFair enough - people assess investments from different perspectives ... even if I am not sure whether the historic view (I paid less for the share and therefore my dividend yield is much better) makes a lot of sense.

I always assess investments with a view into the future. If they paid me in the past say 20% pa - great, buy the CEO a drink ... but the only thing which matters from here is what is the investment paying me in future.

Why? Well, assuming the future looks slow, then it doesn't help to dwell on an amazing past - it's just that I can use the invested money much better with a different investment which promises a good future income.

If I look at Ebos - SP went up in the last decade from $9.56 (24/8/14) to $36.40 (today). Not bad, this is a CAGR of nearly 14%. If I add the meagre 3% dividend (just assuming years before have not been better), then this is a return of something like  17% pa. Just one observation (because its anyway in my spreadsheet): earnings CAGR in the last decade was only 7.4, i.e. SP grew twice as fast as earnings. Hmm.

If we take the decade before - SP went from $3.34 (22/8/04) to $9.56; Not quite as good, but still 11% plus divie, so say 14% per year.

I can see why you consider this a good (past) investment.

If you assume that things stay as they have been and EBOS sits in another 10 years at $100, then it makes a lot of sense to hold.

Just not so sure about the latter. Too lazy to pull out old (20 yrs old) annual reports, but I am quite sure that PE for Ebos did increase not just over the last decade (as per above). Anybody knows - winner?

And this is the problem: If part of your SP increase is PE expansion, then this is something which will end at some stage and then there will be a rough awakening.

But given that the future is uncertain (with the exception of death and taxes) - I certainly do wish you that any PE reduction only comes after the SP is not any more relevant for you.

Ah yes - and re FPH. While I obviously don't know either whether they are too dear (given that this is as well dependent on assumptions about the future), what I can say is that I didn't manage to find any set of credible growth and earning assumptions which would justify their current Share Price. Anyway - their future just must be incredible :) , but this is anyway a different thread;

Anyway - good discussion.

Great post BP. You have got me thinking. Yes I think you're right regarding past performance and costs. I need to give future projections a higher weighting.

I don't see Ebos as a screaming buy at the moment and for anyone considering buying I would wait until the government wholesale agreement is concluded. For long term investors though it's a core stock is how I see it.

Future projections are often wrong. We only need to look at our own reserve bank and economists. They are right sometimes but often wrong. I agree death and taxes are a certainity. As far as the future of Ebos goes some say it's not as bright, others would say the sun will continue to shine.

Do I think $100 is a possibility. Yes history says it's a statistical probability in 10 years unless we have a share split.............

Interesting article from AFR.

https://www.afr.com/companies/retail/ebos-ceo-takes-swing-at-8-8b-chemist-warehouse-sigma-deal-20241014-p5ki2d

Quote from: Shareguy on Oct 15, 2024, 03:28 PMInteresting article from AFR.

https://www.afr.com/companies/retail/ebos-ceo-takes-swing-at-8-8b-chemist-warehouse-sigma-deal-20241014-p5ki2d

Hmm - as long as Ebos was supplying the Chemist Warehouse and making the dosh, it was obviously all good for the market and consumers, but now that the competition is supplying the Chemist Warehouse at better conditions than Ebos, this clearly must be bad for the market ???  ::) .

Always trust the looser, oops -  the Ebos CEO, he clearly has only the interest of consumers in mind.

Good to see the share price getting closer to $40. This reporting period will be interesting.

BusinessDesk headline Forsyth Barr downgrades Ebos Group to neutral

Shucks a downgrade

No worries not really a downgrade ....just share price not 'cheap' at the moment

Target price actually raised to $43.20

So no worries in spite of headline

Interesting ....fairly good result..... but market not impressed. SP down $2.00 for 4% mid aft.

Seems SP got ahead of itself in the lead up.

https://api.nzx.com/public/announcement/446978/attachment/437758/446978-437758.pdf

• Revenue of $6.0 billion (up 9.5%1)
• Underlying EBITDA of $291 million (up 7.1%1)
• Underlying NPAT of $131 million
• Underlying EPS of 67.5 cents
• Interim dividend declared of NZ 57.0 cents per share (maintained at H1 FY24 level)

Quote from: Left Field on Feb 19, 2025, 03:11 PMInteresting ....fairly good result..... but market not impressed. SP down $2.00 for 4% mid aft.

Seems SP got ahead of itself in the lead up.

https://api.nzx.com/public/announcement/446978/attachment/437758/446978-437758.pdf

• Revenue of $6.0 billion (up 9.5%1)
• Underlying EBITDA of $291 million (up 7.1%1)
• Underlying NPAT of $131 million
• Underlying EPS of 67.5 cents
• Interim dividend declared of NZ 57.0 cents per share (maintained at H1 FY24 level)

Looks like, they fit well into our post truth society. Lots of "underlying" stuff which went up (surprise, surprise). Just a pity for them that they still have to publish the statutory numbers as well, which all went down. Need to move to the US, then they can create their own reality and live in it ...

Black Peter - what do you mean by "then they can create their own reality and live in it"?

Quote from: Average_Punter on Feb 20, 2025, 09:51 AMBlack Peter - what do you mean by "then they can create their own reality and live in it"?

Well, that's what the current set of US politicians do, isn't it? Ukraine started the war and Ebos earnings are rising. Same thing.

Another equity raise $200m. Has just been added to Craig's conviction list. Will do my normal and wait till the last minute to decide if I participate or not. 

https://www.nzx.com/announcements/449973

Forbar did an Ebos rave the other day ...OUTPERFORM

They saw Ebos Group's Australian Biotechnologies is a "hidden gem" while Transmedic offers a solid platform for future growth,

I reckon the recent acquisition SVS Veterinary Supplies will be a winner as well. stuff the vet gives our dogs is expensive so a good segment to be in

Share price nearly back to $40;....will go higher methinks.

Does anyone know why EBO isnt in the ASX200
It should qualify with a market cap of almost $7B

Quote from: KW on Jul 04, 2025, 07:27 PMDoes anyone know why EBO isnt in the ASX200
It should qualify with a market cap of almost $7B

A couple of points I think.
 
1/ liquidity, However with Sybos sell down might get there.

2/ Most of trading is on the NZX not ASX

Results out....

https://api.nzx.com/public/announcement/457547/attachment/450582/457547-450582.pdf


EBOS' operating results included Underlying revenue growth of 12.0%1 to $12.3 billion, GOR
of $1.6 billion and Underlying EBITDA of $585 million, up 7.5% on FY241. The Group also
generated strong Underlying free cash flow of $302 million, with a cash realisation of 109%2
.
The FY25 EBITDA result is in line with our guidance range of $575 million to $600 million.

ps Mkt not impressed today (either was I, but I don't hold.)

I am curious....what was the market expecting?

Quote from: Ferg on Aug 27, 2025, 08:00 PMI am curious....what was the market expecting?

EBITDA consensus was $648m  https://www.marketscreener.com/quote/stock/EBOS-GROUP-LIMITED-6494459/finances/
10% miss.

Craig's thoughts

STOP PRESS – EBO has reported FY25 uEBITDA of $585m, slightly below the midpoint of guidance of $575-600m but 2% below consensus and 5% below CIPe. While EBO's revenue was in line with our above consensus estimates, driven by strong PBS spend for the core Pharmacy wholesale business, and GOR margin was also healthy (if slightly below estimates), operating costs were higher than expected. This may partly reflect timing of the full benefits of EBO's cost out programme being deferred more to FY26, with EBO still confident in achieving its $25-50m run rate target by the end of FY26, an outcome we had however expected sooner given EBO's strong progress in 1H25. Even so, EBO's FY26 guidance for uEBITDA to grow 7% at the mid-point is 6% below consensus (comprised of the 2% miss in FY25 and a further 4% miss in FY26) and 7% below CIPe notwithstanding a previously unannounced acquisition (i.e. so the underlying miss is larger), with EBO also talking to a more competitive environment in the pharmacy wholesale business and consumer softness impacting animal care

Disc/ not currently holding

8 September 2025 NZX/ASX Code: EBO EBOS to be added to
S&P/ASX200 Index
Makes a change from HLG posts maybe EBO should do a share split

EBO shareprice having a bit of struggle breaking through the $30 resistance. Still in dog box from what appeared to be a 'disappointing' result. They didn't do a good presentation of the results and lost the opportunity to highlight the growth potential. No wonder the market packed a sad.

They'll be back on track soon and share price will head back to $40 ples.

I asked AI what Forbar thought of Ebos. Jeez what a rave ...a BUY on it.

Asked AI what Forbar thought of EBO. Seems a good rave -

Here's AI report -

Forsyth Barr's most recent price target for Ebos shares is NZ$37.25, following an upgrade to an "Outperform" rating from "Neutral" in September 2025. This is based on the firm's view that the company is a solid entry point due to its current valuation and diverse earnings, despite some risks

The rating was upgraded after a period where the stock's price-to-earnings (PE) ratio dropped to multi-year lows, creating what Forsyth Barr sees as a solid entry point.

The analysts believe the company's earnings are more diversified than ever and that its return on capital remains robust, despite resetting expectations for the 2026 financial year. They also note that Ebos' organic growth rate is above historical levels and that the company is well-positioned for future growth through acquisitions

Our AI is not convinced by your AI and thinks its hallucinating...

Craigs latest is $40.68.  My broker says the number one buy currently on the NZX.

A quality stock at a reasonable valuation is how I see it currently.

 

No AI says rubbish!!! but the some text software searches lately had to be done by hand...and the mark one eyeball..

The problem with AI is that is built to give you a solution even if its made up...

Those reports from the brokers should not be general AI... You have to check everything it does.. you go from being a creator to being an auditor...

Ai is KFC... but you can mine it for the gold... now this stock fell of a cliff... maybe it a trade as it bounces? if enough people believe in the company it could be an induced bounce.. dollar or two.. and becomes a trade able stock..

From FY26 FB forecast a three-year EPS CAGR of +10%.
EBO's de-rating to ~20x 12-month forward PE creates a solid entry point I think. This is below its 10-year average despite significant positive business changes (higher earnings growth and greater diversification). Its PE is now at multi-year lows relative to the NZX median.

Up to 2024 the 10 year CAGR has been over 10%pa. If we look at the loss of the CW contract as a new base I'm picking that with the diversification and additional acquisitions that there is no reason for this not to continue.

A quality buisiness that in my opinion is a good addition for long term holders.

Disc/ have been buying on weakness and one of my larger positions again.

Quote from: Shareguy on Nov 13, 2025, 07:06 AMFrom FY26 FB forecast a three-year EPS CAGR of +10%.
EBO's de-rating to ~20x 12-month forward PE creates a solid entry point I think. This is below its 10-year average despite significant positive business changes (higher earnings growth and greater diversification). Its PE is now at multi-year lows relative to the NZX median.

Up to 2024 the 10 year CAGR has been over 10%pa. If we look at the loss of the CW contract as a new base I'm picking that with the diversification and additional acquisitions that there is no reason for this not to continue.

A quality buisiness that in my opinion is a good addition for long term holders.

Disc/ have been buying on weakness and one of my larger positions again.

I concur with all that....even though quite a few think it's still very overvalued and won't return to strong growth again.

I see sales growth and improved margins in the future

I think we'll do well and people will look back and say jeez sub $30 was really cheap.

Good to see insider buying

$100k from a Director

https://api.nzx.com/public/announcement/462636/attachment/456677/462636-456677.pdf

Ebos under $27 a five year low. Well I could not resist.

Disc/ Now my largest position on the NZX.

With you all the way guy.

This chart says it all

Red line (EPS) goes out to 2027 with conservative forecasts

IMG_6321.jpeg

Quote from: Shareguy on Oct 12, 2025, 03:49 PMCraigs latest is $40.68.  My broker says the number one buy currently on the NZX.

Not trying to be a dick, but I recall one of your previous posts long ago that your broker's main pick at the time was STU?

Quote from: entrep on Jan 20, 2026, 09:55 AMNot trying to be a dick, but I recall one of your previous posts long ago that your broker's main pick at the time was STU?

Might have been. Stu was great value long ago under a $1 and it got over $2 when I sold out. But yes my broker currently thinks that with Ebos for a 2026/27 recovery. I have a large position, but we could both be wrong. It's a quality stock with great growth till the CW loss. I'm picking the growth will continue once again.

Quote from: Shareguy on Oct 12, 2025, 03:49 PMCraigs latest is $40.68.  My broker says the number one buy currently on the NZX.

A quality stock at a reasonable valuation is how I see it currently.

 

Mmh ... at current SP it comes with a forward PE (3 yrs) of 20 - which is together with a forward CAGR of 2.8 sort of ok-ish, but certainly not cheap.

Sparkish?

Anyway - not in my portfolio - more to buy for you and your broker;

Quote from: Shareguy on Aug 28, 2025, 07:09 AMCraig's thoughts

STOP PRESS – EBO has reported FY25 uEBITDA of $585m, slightly below the midpoint of guidance of $575-600m but 2% below consensus and 5% below CIPe. While EBO's revenue was in line with our above consensus estimates, driven by strong PBS spend for the core Pharmacy wholesale business, and GOR margin was also healthy (if slightly below estimates), operating costs were higher than expected. This may partly reflect timing of the full benefits of EBO's cost out programme being deferred more to FY26, with EBO still confident in achieving its $25-50m run rate target by the end of FY26, an outcome we had however expected sooner given EBO's strong progress in 1H25. Even so, EBO's FY26 guidance for uEBITDA to grow 7% at the mid-point is 6% below consensus (comprised of the 2% miss in FY25 and a further 4% miss in FY26) and 7% below CIPe notwithstanding a previously unannounced acquisition (i.e. so the underlying miss is larger), with EBO also talking to a more competitive environment in the pharmacy wholesale business and consumer softness impacting animal care

Disc/ not currently holding

Its hard to understand after the underwhelming result in August 25 how Craigs went on in October at over $40 to have it as their #1 stock pick ?

Ebos did an awful job in presenting their full year results .... truly dreadful (not the result but the presentation)

There was little effort made in saying where the future profit streams are coming from and little in the way of insights into the new businesses they have recently acquired. I think it was Forbar who said Aus Bio and Transmedics were 'hidden gems' and will continue to grow prfits strongly, esp in Asia.

EBO out of favour with the Aussies and its them that drives the share price to a certain extent. When Ebos management gets into gear and becomes a heck of lot better with explaining their businesses with market players things could turn around fast.

It wouldn't surprise me to see a high $30's share price early next year.

I recently looked at the backward 7 year CAGR in tandem with consensus forecasts out to FY28 to get a view on their average growth for the decade inclusive of forecast growth and came to the conclusion the shares are now fairly priced after a huge correction in the last 6 months.

Buying stocks in a downtrend is not a risk I am prepared to take unless a company is truly compelling value on a fundamental basis.

One needs to be careful 'analyzing' EBO as they report in $A and I've noticed that often NZ commentators don't notice

Marketscreener EPS forecasts are in AUD (has a footnote)

Forecast EPS F26 is A$1.30 (+6.4% and F27 is A$1.44 (+11.2%) and  F28 is AU$1.62 (+12.2%)

At current share price A$22.60 that's a PE of 17 for current year and 14 for F28

On that basis seems pretty cheap to me

The issue as I see it is that growth across a decade is not all that good. In 2018 they earned 98.5 cps, source 2018 annual report.
In 2028 if they meet consensus forecasts of $1.62 that's a 10 year CAGR of just 5.1%.

Great value would be a PE of 8.5 + 5.1 = 13.6. Truly compelling value sufficient for me to buy in a downtrend would be a lower forward PE than that.
I'm underwhelmed.

Two very different stocks but just to illustrate my point. HLG in 2018 earned 46 cps. If they meet consensus forecasts for FY28 of 93 cps that's a decade long EPS CAGR of 7.3% and yet they are on a forward PE of just 12. That's buying growth at a truly compelling price.

Ebos. EPS growth Forbar FB and Market Screener,MS.
.....................2025...........2026.........2027........2028.
EPS,FBnz   ..144.5............143.9.........155.9.......174.7.
 eps growth............minus..........8.33%.......12.05%........Average... 6.79%
EPS MSau....1.216............1.294..........1.438........1.612
eps growth................6.41%.........11.12%.........12.10%....Average ..9.87%
Current PE 22.11
PEG FB..........22.11 divided by 6.79 A very high 3.25
PEG.MSs..........22.11 divided by 9.87 High at 2.24.
A PEG of under 1 is good.


Perhaps it is easy to see why I prefer AFT;
From a broker's research.
....................2025A.................2026 E.................2027E...................2028E
EPS...............10.9.....................15.6......................20..........................20.75
EPS Growth.............43.7%...................28.2%.................37.5%........................Average eps growth 34.46%
Current PE ratio is 21.63 giving a PEG ratio of [21.63] Divided by [av growth] 34.46 of well under one at .627.

I prefer to look at the PEG ratio with a broader lens over a longer period of time, my calculation is in the AFT thread, but each to their own ways of doing things.

Each to their own,however this book is an interesting read;
The Most Important Thing
Uncommon Sense for the Thoughtful Investor
Marks, Howard, -
 
 
This book explains the keys to successful investment and the pitfalls that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate his ideas, Marks teaches by example, detailing the development of an investment philosophy that fully acknowledges the complexities of investing and the perils of the financial world. Brilliantly applying insight to today's volatile markets, Marks offers a volume that is part memoir, part creed, with a number of broad takeaways.

PS .
If your library does not have it ask them to order it.
Christchurch libraries have it in stock.
PPS.Made me understand more fully the high risks of "in fashion "stocks, and how well researched "out fashion" stocks can out perform the market.
What to look for and what to avoid.

Don't know the author and am very careful what I read these days to make sure the author has a stellar track record  before reading but it sounds like it's a modern spin on what is widely regarded as "the bible' of value investing, Ben Graham's "The Intelligent investor" which every investor should read. Warren Buffett famously called this book by far the best book ever written on investing.

Two of Ben Graham's key principals are
1. Never pay more than 15 times the average of the last 3 years earnings.
2. When investing for dividend income and assessing the reliability of it, only invest in companies with an unblemished track record of over 20 years.

Very, very few companies on the NZX meet those criteria. HLG passes both those tests with flying colour's and has no debt. For those and many other reasons including its relatively undiscovered as a growth stock and is arguably Australasia's cheapest growth stock with a well proven track record, it's my largest investment position.

These holiday's I am reading Nigel Latta's last book "Lessons on Living'"...only part way through but it's a great read so far

Howard Stanley Marks (born 1946) is an American investor and writer. He is the co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide. In 2022, with a net worth of $2.2 billion, Marks was ranked No. 1365 on the Forbes list of billionaires.[1]

Marks's essays, called "memos", are widely admired in the investment community. They detail his investment strategies and insight into the economy and are posted publicly on the Oaktree website. He has also published 3 books on investing.[2][3] According to Warren Buffett, "When I see memos from Howard Marks in my mail, they're the first thing I open and read. I always learn something, and that goes double for his book."[4]

Marks focuses on risk management and says that investors should set investment strategy according to their personal situations and ask themselves whether they worry more about the risk of losing money or the risk of missing an opportunity.[4] Marks believes that it is hard to gain an investment advantage through research since so many smart people are doing it already; the ways to get an advantage are through better inferring the consequences implied by current company data, managing the psychology of investing, and assessing the present stage of the business / market cycle. He hopes to have average returns during a bull market, while minimizing losses during bear markets due to his belief that losses do more harm than any benefit investors obtain from gains. Marks does favor using market timing strategies to have cash available to be invested during a downturn.[5] Marks notes that it is important for investors to admit what they don't know instead of believing something is certain. He aims for a "high batting average" over "home runs".[6]

Funds led by Marks have produced long term returns net of fees of 19% per year. Investors are primarily pension funds and sovereign wealth funds.

Looks like the selling has come to an end. Price firming. Should see some disclosure notices coming soon.

A couple of graphs for EBOS; the first one shows the derivation of earnings and the second is the historic P/E ratio.

EBOS has consistently produced NPAT of around 1.6% to 2.0% of sales for the past 15 years. Some of the increased sales have been "purchased" by issuing new shares to acquire other businesses. Looking at time slices of 10 or 15 years looks through gaining and losing the Chemist Warehouse business.

CAGRs over the past 10 years are:
~ Sales +8.3% p.a.
~ Share Count +3.0% p.a.
~ NPAT as a % of Sales +0.1% p.a.
~ Putting this together EPS has grown by +5.2% p.a.

EBO_EPS_2025 - Copy.JPG

And looking at the share price, the following graph plots the closing quarterly share price (the blue squiggly line) versus a P/E ratio band. I chose the values 15-25 for the band given I don't think that investors in general should pay more than 25 times earnings for anything. The green line would be the SP at a P/E ratio of 15 and the orange line would be the SP at a P/E ratio of 25. The grey dotted line is the midpoint - the earnings for each quarter is a blend of historic earnings & future earnings.

EBO_PER_2025 - Copy.JPG

IMO this graph shows the Ebos SP has recently gone from horrendously expensive since 2021, to being very expensive today. I would not be buying at these prices. The P/E ratio has a compound annual growth rate of +8.2% p.a. for the past 10 years; so whilst earnings have grown at +5.2% p.a., investor confidence has grown by +8.2% p.a.

Notes:
All values are NZD; Australian reported values have been converted to NZD using an annual midpoint FX rate.
Disclosure: observer only, no position.

Thanks for posting that Ferg. Ebos has always been expensive from a PE point of view but in my opinion you pay for quality.

Your graph states EPS has grown by +5.2% p.a. I expect that to continue from 2027.

Quality company yes,but value I very much doubt.
PE of 22.493 for 5.2% eps growth?
P/E
22.493
EPS
$1.185
NTA
-$4.501
Gross Div Yield
4.835%
Securities Issued
205,031,863

Quote from: lorraina on Jan 27, 2026, 05:38 PMQuality company yes,but value I very much doubt.
PE of 22.493 for 5.2% eps growth?
P/E
22.493
EPS
$1.185
NTA
-$4.501
Gross Div Yield
4.835%
Securities Issued
205,031,863

That's the past lorrianna .... need to think about the future prospects

Quote from: Ferg on Jan 26, 2026, 10:25 AMThe P/E ratio has a compound annual growth rate of +8.2% p.a. for the past 10 years; so whilst earnings have grown at +5.2% p.a., investor confidence has grown by +8.2% p.a.

Thanks for your excellent analysis Ferg.
I concur with your EPS 10 year growth rate, I actually got 5.1% CAGR for 10 years, (and Winner, please note that's looking out 3 years into the future and assuming they meet forecast consensus growth for the next 3 years).  I am sure we all agree that this is a very modest growth rate.  Its alarming that even after a quite significant share price correction the PE ratio has grown at an 8.2% CAGR for the last 10 years.  The mind boggles as to what the PE expansion CAGR looked like when the shares were $40+ !

The way I see it, the company reached "market darling" status in the middle of 2025, possibly because its in the "in vogue" healthcare sector but the EPS CAGR rate is simply not supportive of the current price, let alone explain why any brokerage was tipping this as their #1 stock when it was $40+.  To me, this is a great example of the serious risks of blindly following analysts recommendations without doing the number crunching yourself.  I'll stick with my well proven methodology of putting 80-90% stock on what a company has done in the past and only 10-20% stock on what management tell you they're going to do in the future.    In this case I've given management beyond the maximum possible benefit of the doubt putting a massive 30% weight on future prospects, and assumed they will meet the next 3 years consensus growth expectations and I still only get a 10 year (combined historical 7 year + forward 3 year) EPS CAGR of 5.1% which is why I am so underwhelmed.

I'll put up my EBO chart again ...the one showing EPS and shareprice for most of this century

I say thst over the duration of the chart the average PE has been 19. The current PE based on F26 forecast EPS $1.47 (Marketscreener has A$1.294) is 18....below long term average.  PS at xrate .86 PE is about 17.

Ferg has his methodology and it's pretty robust but I prefer my way and a picture tells a good story

Yes Basil the share price over $45 a while ago was wgphen the market went silly and most stocks got big rises which turned out to unwarranted.


IMG_6321.jpeg

The Marketscreener forecast EPSs in A$ are -

F25. 1.216. 
F26  1.294    +6.5%
F27.  1.439. +11.5%
F28. 1.612.  +12.1%

1.294 is NZ$1.50 so EBO has a forward PE of 17.7 at $26.60 ....with double digit growth forecast for the following 2 years

Those are bullish forecasts winner....well above historical.  Although I use warts and all NPAT, whereas is that underlying profit per market screener?  I also posted on the other site I don't think they could get NPAT to 3% of sales - I think they will deliver an average of 2% of sales given they are a low margin business.  In the past 15 years their peak NPAT% was 2.3% in 2011.

At $26 I think EBO is fairly priced using my assumptions in a DCF calculator....it should give an 8% yield if they keep doing what they have been doing.  I'm assuming annual sales growth of 8%, share count increase of 3% p.a., dividends at 80% of EPS and a P/E ratio of 20....so that $26 price for an 8% yield means they can't have any earnings misses in the next 5 years.....it can be done but it's a tall order.

Quote from: winner (n) on Jan 27, 2026, 07:08 PMI say thst over the duration of the chart the average PE has been 19. The current PE based on F26 forecast EPS $1.47 (Marketscreener has A$1.294) is 18....below long term average.  PS at xrate .86 PE is about 17

The approach you've taken is in my opinion commonly used by analysts and I think many use historical average metrics as a yardstick for what's fair and reasonable in the future regardless of whether the metrics based on the average growth rate are quantitatively reasonable or not.  I would call this "sector bias" if there is such a thing.  FPH another good example, from the healthcare sector where its very hard to justify the forward metrics based on the historical growth rate but because these companies are in the "darling" healthcare sector with an unlimited runway for future growth with an aging population, all sorts of quantitative rationale is disregarded, favored sector bias is applied and perhaps, very brave future growth assumptions go into their DCF models.

Objectively If I stop making excuses for the company around the loss of the CW contract and I stick with my standard 5 year analysis timeframe the EPS CAGR is only 3.3%.  Just as well you can be absolutely certain growth will be far better going forward eh ;)   Good luck mate.

Hey Basil, one of your favourite sayings is 'share price follows eps'

My chart (and Fergs) show EBO is a great example of how true that is ...over a very long period. No reason why it won't be in the future.

The forecast eps quoted are from Marketscreener. For what it's worth my forecasts are slightly higher. Mainly based on that the newish growing businesses seem to have higher margins than older ones - the 'hidden gems' some brokers call them.

Interesting to see how all this turns out but main issue at the moment is the lack of clarity from management which seems to have pissed off some big holders who want out. Once they get their credibility back all good I reckon.

I was rather intrigued with this what Ferg came up and what Basil latched on to -  PE ratio has grown at an 8.2% CAGR for the last 10 years.

Suppose maths is maths etc etc.butin the context of today what does it really mean

I don't know but for interest sakes here how I see EBO PE over the years

EBO Chart PE.JPG

Quote from: winner (n) on Jan 28, 2026, 09:15 AMI was rather intrigued with this what Ferg came up and what Basil latched on to -  PE ratio has grown at an 8.2% CAGR for the last 10 years.

Suppose maths is maths etc etc.butin the context of today what does it really mean

From a maths perspective, what it means is you can track the 4 drivers of share price movement over long periods of time.  It breaks down to Change in SP today vs time zero.  A SP is expressed as EPS x P/E ratio.  EPS is further broken down to Sales x NPAT% / shares.  Putting all this together, we can determine what has driven a change in share price:

 1) Sales is driven by consumers
 2) Share count is driven by directors (what I call 'acquired' sales) - hence the reason I look at Sales/Share
 3) NPAT% is driven by management
 4) P/E ratio (or sentiment) is driven by investors.

All of these get expressed as a CAGR.

For example: 10 years ago EBO share price at June 2015 was $10.90, SP at June 2025 was $39.82.  What drove this SP increase?
 1) Sales went from $6.07b to $13.4b - a CAGR of 8.288%
 2) Share count went from 50.8m to 150.7m - a CAGR of 3.037%
 3) NPAT % went from 1.746% to 1.759% - a CAGR of 0.074%
 4) P/E ratio went from 12.1 to 34.2 - a CAGR of 8.232%

Combining 1, 2 & 3 gives EPS CAGR of [ ((1.0829 x 1.00074 / 1.03037)-1 = ] 5.175% (beware of rounding errors)

Starting SP of $10.90 x ((1.05175 x 1.08232)^10) = $10.90 x 3.653 (beware of roundings) = ending SP of $39.82

So the SP has increased 3.6 times over the past 10 years where growth in investor sentiment has outpaced EPS growth.

For what its worth Winner, Tony seems to like their Blackhawk dog food. He's lying on my bed in the sun looking very contented after his breakfast. Maybe that's a good sign :)

Further to my post, here are the words expressed in graphical form.  This shows EBO vs FPH:

EBO-drivers-2025 - Copy.JPG

FPH-drivers-2025 - Copy.JPG

I should probably normalise these graphs to 10 years....they currently use all available data that I have.

Interesting way of looking at how share price has evolved ....especially breaking it down into consumers etc.

I've often done similar sort of exercise but used $'s instead of CAGR

Like in simple terms share price in your example has gone up $28.92 of which $3.13 came from increased EPS and $25.79 from change in market sentiment or PE expansion.

Must say your starting point is a low and end point is near a high so some would say could be a bit misleading.

Bit different six months on eh with a much lower PE and all those new shares not really adding any value so far

Craigs sent me some insights this morning and reminded us why they like EBO

EBOS Group

EBOS Group is an outstanding business which has fallen out of favour since the company provided disappointing FY26 guidance in August, as the company's costs were higher than expected. We think these issues are largely one-off, and FY27 will see EBOS Group return to more typical growth rates. With EBOS Group shares trading at just 18x forward PE (which is a discount to its long-term average), we see potential for the shares to perform well over 2026 ahead as investor visibility of a pick-up in growth improves.

Quote from: winner (n) on Feb 03, 2026, 09:48 AMCraigs sent me some insights this morning and reminded us why they like EBO

EBOS Group

EBOS Group is an outstanding business which has fallen out of favour since the company provided disappointing FY26 guidance in August, as the company's costs were higher than expected. We think these issues are largely one-off, and FY27 will see EBOS Group return to more typical growth rates. With EBOS Group shares trading at just 18x forward PE (which is a discount to its long-term average), we see potential for the shares to perform well over 2026 ahead as investor visibility of a pick-up in growth improves.

I bought some today

Probably gonna regret it.

Craig's research almost as fraught as the Dunedin crowd

Me too
Ditto

I'm still adding

Quote from: Crackity on Feb 04, 2026, 08:33 PMI bought some today

Probably gonna regret it.

Craig's research almost as fraught as the Dunedin crowd

What does KW say about drinking and buying in a downtrend ?

And that's after the bean counters on here have pointed out the EPS CAGR is a very modest 5%.

SP has been beaten down..... will this result help turn the corner?

https://api.nzx.com/public/announcement/468129/attachment/463152/468129-463152.pdf

I doubt it.Both NPAT and EPS are down on last year.

Financial highlights (all $ figures are in AUD, and comparisons are made against HY25)
Period ended 31 December HY26 HY25 Change
Underlying results
Revenue 6,768 5,991 13.0%
GOR 868 799 8.6%
EBITDA 300 291 3.2%
Net Profit After Tax 125 131 (4.3%)
Earnings per share - cps 61.4c 67.5c (9.0%)
Underlying EBITDA (%) 4.4% 4.9% (50 bps)
Leverage ratio1
(x) 2.2x 1.9x2 0.3x
ROCE (%) 12.9% 13.3% (40bps)
Statutory results
Revenue 6,768 5,991 13.0%
EBITDA 303 276 9.7%
Net Profit After Tax 125 110 13.0%
Earnings per share - cps 61.1c 56.9c 7.4%

Net Profit After Tax 125 110 13.0%

NPAT up 13.0%

That's pretty good

But underlying NPAT down 4% and negative $24m FCF. So many metrics to look at...

Maybe we are past the worst, 2H guidance would imply that (or shades of A2?  :-X )

Quote from: Gerald on Feb 25, 2026, 09:10 AMBut underlying NPAT down 4% and negative $24m FCF. So many metrics to look at...

Maybe we are past the worst, 2H guidance would imply that (or shades of A2?  :-X )

Should add $31m of lease payments to your FCF making it negative $55m

Even Operating Cash Flow of $16m is pathetic when $6.6billion comes in from customers.

Something not right

NPAT as a % of sales is 1.84% which is almost the same as the average for the last 16 years which is 1.88%.  After a couple of "spikes" in FY23 & FY24 of 2.15% and 2.07%, EBO has reverted to the mean so to speak.

Share count is up 0.9% for the HY vs FY25 - this is lower than the historical 3% p.a. but the ongoing DRIP and issuance of shares for acquisitions is creating a headwind for EPS.

The FCF was low due to a massive +$156m increase in receivables, but this should reverse in H2.

EBO-CFR-HY26 - Copy.JPG

Disclosure: still not holding, but looking for a good entry price once I clarify any risks around the CW contract for NZ.

Two issues coming up to consider

1/ The NZ Chemist Warehouse supply contract. It is highly likely EBO will lose this contract at 31 December 2026.

2/ Craig's has assessed EBOS exposure to higher fuel costs. EBO spent $172m on freight in FY25 with third parties (e.g. Freightways and DHL), mainly to transport medicines from its distribution centres to pharmacies and hospitals across Australia and NZ. Around 20-30% of the cost of freight is fuel, and EBOS does not appear to hedge its exposure. With the price of oil up c.50% over the past month, major freight companies have swiftly moved to pass through higher fuel prices to customers via increased fuel surcharges. Ridgewell estimates EBO's monthly freight costs have increased - or will very shortly increase - c.12-15%, or $2.0-2.5m per month (to $16-16.5m per month). While the impact on EBO's EBITDA so far is not material relative to FY26 guidance of $615-635m, if fuel prices remain at current elevated levels for the rest of FY26 (i.e. until June 30), and EBOS is not able to mitigate, this equates to a $8-10m impact on EBITDA (1.3-1.6% downgrade vs FY26 guidance) and $6-7m impact on NPAT (c.2-3% downgrade vs FY26 consensus).
Accordingly, Ridgewell has downgraded his FY26F EBITDA.

My daughter told me this morning she was buying diesel for her truck in February for as little as $1.29 on discount days.  Yesterday she had to pay $3.85, nearly triple the price 6 weeks later !  WOW !

Quote from: Basil on Apr 07, 2026, 09:46 AMMy daughter told me this morning she was buying diesel for her truck in February for as little as $1.29 on discount days.  Yesterday she had to pay $3.85, nearly triple the price 6 weeks later !  WOW !

Somewhat related......EBO downgrade today citing "elevated fuel prices".....   other companies likely to  be thinking along similar lines.

https://www.nzx.com/announcements/471313

Quote from: Left Field on Apr 22, 2026, 09:11 AMSomewhat related......EBO downgrade today citing "elevated fuel prices".....   other companies likely to  be thinking along similar lines.

https://www.nzx.com/announcements/471313

https://www.nzherald.co.nz/business/economist-gareth-kiernan-warns-fuel-prices-likely-to-stay-above-3-a-litre-into-2027/74XFC3OX4JCDZJNGFT3BZW7X3Y/

Many companies might hit as a result of high cost.