All Health Corporation (ASX code HEA) company announcements can be read on its listing on the ASX website here.
Previous Announcements
29th February 2008
Health Corporation signs milestone export distribution agreement
Health Corporation has signed an export distribution agreement with Melbourne based OTCO Global, covering the company's weight loss products. OTCO has been appointed the exclusive distributor of these products in member countries of the Gulf Cooperation Council (GCC) including Saudi Arabia, Kuwait, UAE and Bahrain.
OTCO Global is a local distributor of dermatological products and exports a wide range of health and beauty products to GCC countries where it is already in negotiations with a variety of pharmacies and retailers.
The contract length is for an initial period of one year and it is anticipated that much of the first year will be trialling the product to better understand local conditions as well as establishing distribution channels.
Health Corporation's uniquely formulated weight loss products were introduced in 2006 and are now available through all 35 stores in the company's franchised pharmacy network, Health Information Pharmacy (HIP).
According to Health Corporation's CEO, Ken Lee,
"The Development of the weight loss products was an important initiative that flowed from our core value of high levels of customer service as well as providing a point of differentiation in the pharmacy market."
"This export and distribution agreement opens up a new distribution channel for the company with excellent medium to long term growth potential. Other export opportunities are also being pursued."
In further commenting on this milestone agreement, Ken Lee said,
"People in some of the oil rich countries are prone to lead sedentary lifestyles because of the intense heat and desert conditions, resulting in obesity now emerging as a significant issue. The weight loss market is still in its infancy, so this is very much a ground floor opportunity for Health Corporation's weight loss program to be taken up in this wealthy region of the world."
29th February 2008
Half year results to 31 December 2007
Health Corporation announces a loss of $897,679 for the six months ended 31 December 2007.
During the reporting period, Health Corporation Limited embarked upon a major restructure of its operations which is now yielding anticipated benefits and the network, operating under the banner of Health Information Pharmacy (HIP), continued to expand outside of NSW.
A significant highlight for the period was the opening of two new stores in the Melbourne suburb of Lilydale and the settlement of two more Victorian store sites. This takes the total number of stores under the HIP banner to 35. One of the new stores located in the Melbourne CBD will become the flagship store for the company's growth in Victoria and is an indicator of a continued push for growth and expansion in all eastern states.
As a result of the restructuring of the business and with the anticipated continued expansion of HIP, the Directors expect that the compnay will transition into profitability on a monthly basis in the June quarter.
The loss was attributable to a marked decline in revenues due to only two new franchise signings during the period, offset by two departures, compared with five (14 for the full year) new signings in the same period in the previous year. The result was also adversely affected by a number of significant accounting write-offs and adjustments for the prior period.
As previously reported, restructuring of the business was recently completed with monthly savings of $50,000 now being realised. The key initiative was to bring in house the delivery of business coaching services to the network. The company is also no longer providing mezzanine finance and the existing loan book is being wound down.
Following the conclusion of the recent operational restructuring, management is now able to focus on expanding the business. During the current quarter, a minimum of 5 new franchises are expected to be signed and exports of the company's weight loss product are due to commence.
Health Corporation continues to work on a number of projects which on completion are likely to make a significant impact to the ongoing success of the business. The company is making good progress and we appreciate the ongoing support and patience of our shareholders during this period of restructure and growth of the business.
Health Corporation CEO, Ken Lee said,
"Whilst we are naturally disappointed with the half year loss, restructuring, controlled expansion of the franchise (HIP) and other initiatives give us good cause for optimism about the future."
Business Update - December 2007
A major restructuring of operations is now yielding anticipated benefits and the network, operating under the banner of Health Information Pharmacy (HIP) continues to expand. A significant highlight for the quarter was the opening of two new stores in the Melbourne suburb of Lilydale under the HIP banner.
A restructuring of the business was recently completed with monthly savings of $50,000 now being realised. The key initiative undertaken was to bring in-house the delivery of business coaching services to the network. In the interim, to ensure the continuity of service to pharmacy owners whilst an internal capability was established outside contractors remained in place during the December quarter.
At the time of reporting, we are pleased to advise that the internal coaching service is now firmly in place, outside contractors are no longer required and a major savings to the company in this important faxet of the business is now being realised.
Expansion of the Health Information Pharmacy network continues with 35 outlets now in place with the latest additions of the Melbourne sites.
As a result of the restructuring of the business process and with the anticipated continued expansion of HIP, the Directors expect that the company will transition into profitability, on a monthly basis in the June quarter.
Health Corporation continues to work on a number of projects which on completion are likely to make a significant impact to the ongoing success of the business.
The company is making good progress and we appreciate the ongoing support and patience of our shareholders during this period of restructure and growth for the business.
Business Update - September 2007
Pharmacy franchisor, Health Corporation Limited (ASX: HEA) continues to make good progress in building its network under the Health Information Pharmacy (HIP) brand. Expanded marketing efforts continue to generate considerable interest resulting in a solid pipeline of enquiry.
As a result of recent settlements, including 7 in the past quarter, there are now 33 HIP branded pharmacies in Queensland, New South Wales and Victoria. A further 3 pharmacies are due for settlement over the next few months.
The company is on track to have in excess of 50 outlets by the end of June 2008, which will drive substantial revenue and profit growth over the next two years. Much of this expansion is expected to occur in Victoria, where the brand has been under-represented. The appointment earlier this year of a Victorian business development manager has strengthened the brand’s presence in that market. Three pharmacies have been opened under the HIP brand in Victoria in recent months.
The company’s internally developed and owned weight loss program has been introduced into all HIP outlets following very successful trials at three stores. The program is delivering positive results for clients and is generating excellent revenues for the company.
Underlying store performance has been strong, reflecting the considerable value-add from the HIP system, introduction of the company’s weight loss program and favourable trading winter season.
The company is actively pursuing opportunities to accelerate its growth. The recently announced MOU with Sydney based General Practice Support Services Pty Ltd (GPSS) to jointly work together to establish medical centres and pharmacy sites where feasible is such an example.
As a result of these initiatives revenue in 2007-08 is expected to be considerably higher than the recently reported $2.6 million achieved in 2006-07.
31st August 2007
Health Corporation enters strategic alliance to develop pharmacies within medical centres in NSW
The Directors of Health Corporation Ltd (ASX: HEA) announce that a Memorandum of Understanding has been signed with General Practice Support Services Pty Ltd (GPSS) to work together establishing medical centres and pharmacy sites where feasible.
It was agreed by both parties, following an extensive due diligence process, that an alliance to develop co-located centres would effectively serve each company’s needs and growth strategies.
Health Corporation remains committed to building its franchised network of pharmacies under the Health Information Pharmacy (HIP) brand and to this end a milestone was recently reached with the network now passing thirty pharmacies.
Ken Lee, Managing Director Health Corporation Ltd in commenting on this alliance and the growth of its own branded pharmacies said:
“We are delighted to form this strategic alliance with GPSS in NSW to further explore opportunities where medical centres and pharmacies can be established concurrently.”
“Health Corporation is also looking to establish strategic alliances with groups in other states outside of NSW where similar synergies exist and the Company can fast track the opening of new pharmacies under the HIP brand.”
“This initiative will complement our existing organic growth strategy of establishing new pharmacies Mr Lee said.
June 2007
Business Update - June 2007
The Directors of Health Corporation Limited (ASX:HEA) are pleased to announce that considerable progress has been achieved in implementing the company's strategy as detailed in its IPO prospectus. Health Corporation listed on the ASX on 21 December after successful capital raising.
Since listing, the company has expanded its marketing efforts and has increased the number of pharmacies from 25 to 30. There are another 20 pharmacies in the pipeline that the company is expecting to bring on stream in the near term. Of those in the pipeline, Health Corporation can report that 8 to 12 are pending completion taking the total number of pharmacies in the franchise to 40. This will exceed the original stated objective of achieving this outcome by the conclusion of the calendar year 2007.
In recent months, we have increased the staffing of our marketing team, including the appointment of a business development manager in Victoria. Significant progress has already been made in this State with a total of 6-8 pharmacies soon to be operating in the region under the Health Information Pharmacy (HIP) banner. We already have HIP successfully operating in the Greater Geelong area.
We have attended a number of key trade shows resulting in demonstrable lead generation and considerable interest in the activities of the company. We believe the high level of interest was due to the launch of the new brand with a unique and eye catching store design, as well as the promotion of our new weight loss product.
Our weight loss program is currently being trialed in three pharmacies. Performance to date has been excellent and the program will be launched in all pharmacies by the end of July 2007. This program is an example of the value added opportunities that the company plans to develop to further differentiate Health Information Pharmacies (HIP).
The Directors anticipate releasing the 2006-07 financial results at the end of August 2007.
20th December 2006
HIP to list on the ASX
Health Information Pharmacy parent company, Health Corporation (HEA), announced recently that it closed its initial public offering (IPO) and advises today that it will list on ASX on Thursday 21 December at 11.00 am. The company has achieved a very pleasing result from the capital raising and on listing, at the issue price of 60 cents per share will have a market value of $27.70 million.
Health Corporation's Chairman, Mr Graham Dunkley, said proceeds from the IPO would fund the expansion of what is already a profitable and established business.
On announcing the IPO in early November, Mr Dunkley said,
"On listing Health Corporation, the board's intention is to accelerate earnings-per-share growth by funding passionate pharmacists into their own retail businesses and by expanding its franchise network under the Health Information Pharmacy (HIP) brand in Australia's fragmented pharmacy market".
"The funds raised through this offer will be used to embark upon an immediate growth phase to secure a greater asset and revenue base".
To that end, Health Corporation is pleased to also announce today, as part of its ongoing growth strategy that the number of franchised pharmacies has increased from 25 at the time the IPO was announced to 27 prior to listing the company on Thursday 21 December.
In commenting on these additions to the store franchise operations, Managing Director of Health Corporation Limited, Mr Ken Lee said,
"We have just settled 2 stores under the HIP franchise with 3 more under contract and several in the pipeline for 2007".
"This reflects the addition of 2 new stores under the Health Information Pharmacy (HIP) brand with one in Sydney and the other in South East Queensland".
Since it commenced operations in 2002, the HIP brand has been developed as a unique franchise system providing numerous business systems and mentoring services enabling pharmacists to run their businesses more profitably whilst delivering superior healthcare services to their customers.
The company believes that it can quickly expand the franchise network to at least 40 pharmacies with an objective of having 100 pharmacies nationwide in the medium term.
"Initial plans are for between 12 and 24 pharmacies to join in the next year or two, either through acquisition or through a franchise arrangement", Mr Dunkley said.
In commenting on the franchise and finance model Ken Lee, Health Corporation's Managing Director commented,
"Health Information Pharmacy was created to improve the health care of communities via the active use of a pharmacist's medical knowledge. The increasing pressures of business operations and potential declining profits faced by pharmacists were also factors crucial to the development of a professional pharmacy business model".
"The company has sourced passionate, entrepreneurial pharmacists who will underpin the expansion of the company. Uniquely, each pharmacist is personally trained by an accredited Business Coach to maximise growth potential".
"This business model facilitates delivery of exceptional care and lifelong relationships, enabling Health Information Pharmacy businesses to clearly differentiate themselves from a high volume, impersonal, supermarket-based pharmacy or commodity retailer, and gain market share".
HIP to list on the ASX
Health Corporation Limited (HCL), the parent company of Health Information Pharmacy (HIP), is proposing to list on the Australian Stock Exchange. HCL was founded by pharmacist Ken Lee and is predominantly owned by pharmacists.
The company’s main purpose is to use the leverage and power of the public market to fund the development of local retail pharmacies.
“Pharmacies around the world can deliver improved health benefits to the community whilst still being profitable. The pharmacy industry generally is fragmented, lacks economies of scale and buying power, all challenges we at Health Corporation are endeavouring to solve. We are attempting to unite pharmacy owners in this vision and for those who are part of HCL a generous share option plan exists”, Mr Lee said.
Central to HCL’s growth strategy is continuing to franchise its successful HIP brand and providing finance to assist its members, and other pharmacists, to purchase pharmacies.
60% of current pharmacy owners are over the age of 55 and their succession planning is a critical issue, particularly as approximately 2,000 pharmacies are forecast to come on the market in this way over the next five years: a typical pharmacy business sells for around $2m and buyers normally need around $500,000 of their own funds.
This creates a problem for both the vendor, who wishes to recover the value in their pharmacy, and the buyer, who needs to source the funds, and ensure that they can grow a successful, profitable and professionally rewarding business.
This is a huge challenge for many aspiring owners, but HCL’s finance arm, Leverage Finance, now makes pharmacy ownership possible for a much broader range of purchasers (for pharmacists wishing to join the HIP group), by making sufficient funds available to reduce ‘own funds’ needed to about of a third of the normal amount.
HIP provides the pharmacy owner with a focused, differentiated high-service model based on over 100 business systems and the support of business coaching. Members also receive the benefits of group buying power and will now be better resourced with access to public market capital.
The success of the HIP systems has seen stores report substantial net profit increases and helped several members grow their store ownership, in one case from one store to seven within four years of membership.
As part of its successful growth strategy HCL is also sourcing potential sites and business partners, as well as managers with ownership ambitions, to provide a turnkey solution for those pharmacists who wish to expand their business interests.
Some monies will also be raised to create new products and programs for pharmacy.
The Health Corporation Ltd Initial Public Offer is now closed.
View the Health Corporation Prospectus (Adobe Acrobat pdf format 3.34 MB) - for information only (this offer is now closed).
