GXH - Green Cross Health (formerly PHB - Pharmacybrands)

[winner69]

You are only as good as your last game they say

[Beau]

Thanks for the rubbishing Winner seemed to work again this time feel free again next week.

[winner69]

Thanks for the rubbishing Winner seemed to work again this time feel free again next week.

Maybe it was the good things (cash flow etc) punters took on board

[value_investor]

This one was always on my radar but I never pulled the trigger. My views:

- With the rise of online shopping, Chemist Warehouse coming into the market so aggressively and Covid, I thought this one would pivot digitally very hard but didn't. Their website is quite disappointing and they don't advertise as heavily for it as a HLG do who I get ads for on a regular. Also some of their stores leave a lot less to be desired with range and pricing. As a consumer, I'd much rather go to CW where I can get everything, rather than a lesser range. I also know they have some struggling stores that they continue to operate so they don't lose market share in a certain area, in a new age this really shouldn't be a thing.

- The medical side of the business is probably the most interesting in a post covid area. That and the ageing population theory in NZ playing out makes it the most stable part of the business. However the more I think about it, the more I think another operator could just come in and disrupt the business again like pharmacy. You are for the most part providing a quite homogenous service and seniors are very price sensitive. A new medical centre offering a slight discount would eat their lunch (Like CW already has).

- Community health is a struggle without the right amount of government funding but I see this as a societal thing. GXH have bemoaned in a lot of their reports a lack of funding in this area but in a post covid era, I don't see this getting better. I think if the government were to fund them to a higher level, it would not look great from a political lens that a healthcare company is making large profits in a country where healthcare is a right (we've seen this from both left and right governments in NZ).

My opinion is that the business is a slow/low growth type one. It might get back to paying 3.5c dividends consistently again but beyond that, I don't see it growing to a point I'd be confident to say I'm getting compounded annual returns greater than just putting my money in a market tracking ETF.

Disc: Not a holder.

[BlackPeter]

This one was always on my radar but I never pulled the trigger. My views:

- With the rise of online shopping, Chemist Warehouse coming into the market so aggressively and Covid, I thought this one would pivot digitally very hard but didn't. Their website is quite disappointing and they don't advertise as heavily for it as a HLG do who I get ads for on a regular. Also some of their stores leave a lot less to be desired with range and pricing. As a consumer, I'd much rather go to CW where I can get everything, rather than a lesser range. I also know they have some struggling stores that they continue to operate so they don't lose market share in a certain area, in a new age this really shouldn't be a thing.

...

Interesting ...

While I agree that Life Pharmacies (https://www.lifepharmacy.co.nz/) webpage is somewhat cluttered ... surprised anybody finds the Chemist warehouse (https://www.chemistwarehouse.co.nz/) online experience better. Checked as well some products - and at least for my (admittedly not representative) wee survey prices are quite similar.

I would think as well that the key decision criteria for using a pharmacy are location, accessibility and quality of service. Not sure how much of their service can sensibly be transferred online?

GXH owns roughly one third of the pharmacies in NZ. I am somewhat surprised that posters here seem to think that they will bear the brunt of the onslaught of the so called discounters - and this is not even taking into account that the discounters seem to specialize on selling cheap cr*p without providing any service or advise.

But even if the quality of their service would be comparable (which it clearly is not) - wouldn't it make sense to assume that it is more likely the small mum and dad pharmacies who might suffer? Unichem and Life Pharmacies do have some scale, are easier able to control their purchase prices and would find it easier to fight back on issues like opening times. They even might benefit if the Chemist Warehouse manages to kill off some of the small pharmacies (resembling so far 2/3rd of the NZ marketplace).

...

- The medical side of the business is probably the most interesting in a post covid area. That and the ageing population theory in NZ playing out makes it the most stable part of the business. However the more I think about it, the more I think another operator could just come in and disrupt the business again like pharmacy. You are for the most part providing a quite homogenous service and seniors are very price sensitive. A new medical centre offering a slight discount would eat their lunch (Like CW already has).

...

Seniors are hardly paying doctor fees anyway, aren't they? - hard to undercut small or no charges and still make money, isn't it?

As well - the challenge to open up new "discounter clinics" might be related to finding all these unemployed GP's currently just lining up for working with a discount provider. I was under the impression that we suffer a doctor shortage currently ... but maybe you have some relevant insider knowledge into the health system and know where to find them, do you? I am sure the Ministry of Health would greatly appreciate your insights ...

Obviously - the discounters could increase the GP salaries to lure away GP's from their current clinics ... but this might somewhat limit their potential to discount their services ;

Obviously - none of us knows how the SP will develop, but at this stage I'd see their chances to do well much better than their risks to eventuate.

[Getty]

I dont know how many of their Pharmacies are co located with their Doctors chain, but that must be a factor in their favour.

Someone who has just been awarded their prescription, is less likely to stumble around town thinking where can I get this 20 cents cheaper?

[percy]

I am currently having sinus issues and will be having an operation to fix ,shortly.
So I am using paracetamol,ibuprofen and Neil Med Sinus rinse 120 premixed sachets.So lets check prices.
.................................................. ............................Life Pharmacy.................The Chemist warehouse....Savings $.........Savings %
Neil Med Sinus Rinse 120 premixed sachets......................$44.99............... ................$31.99...................$13.00... .............28.90%
Ethics Paracetamol tablets 100s........................................$6.99. ...............................$2.49.............. .......$4.50....................256%
Ethics Ibuprofen tabltes 100s...........................................$16 .99...............................$2.99........... ..........$14.00...................559%
So each time I purchase all three the cost is ....................$68.97........................ ........$37.47....................$31.50.......... .......45.68%

[Getty]

Mmm, direct translation?

Buy GXH quick!

They are creaming it!

[percy]

Not from me.,..........................lol.
Point is you visit The Chemist Warehouse, either online or visit a store,and see how much you can save,why would you buy the same products from Life Pharmacy again.?

[Getty]

That Dan Carter chap seems on target , with everything he does...