GXH - Green Cross Health (formerly PHB - Pharmacybrands)

**sashadidi** · 23-06-2015, 06:30 PM

You might need to factor the actual declining rate of of return on the core business of the pharmacy sector being dispensing with its lack of increase in remuneration since 2001 ongoing lower drug prices causing diminished returns from wholesaler rebates
caused by constantly lowering drug prices, the move to robotics causing a decline in the customer count because of the lack of interaction between patients and the pharmacist. they are buying pharmacies for well over the odds ,my friend got 40% ($500000.00) more than he expected from the market as they are splashing out shareholders money willy nilly and putting in managers who do not care enough to grow the business , the idea of having a manager will never match a owner operator although they have their own version of that but it is not a long term winner because of their business model.

disclosure, I am a pharmacist in business and have had them take over near me, we gained 10% business within a year because of their management style... being uninterested staff who do not really care for the customer

**percy** · 23-06-2015, 07:46 PM

Originally Posted by sashadidi

You might need to factor the actual declining rate of of return on the core business of the pharmacy sector being dispensing with its late of increase 2001, lower drug prices causing diminished returns from wholesaler rebates
caused by constantly lowering drug prices, the move to robotics causing a decline in the customer count because of the lack of interaction between patients and the pharmacist. they are buying pharmacies for well over the odds ,my friend got 40% ($500000.00) more than he expected from the market as they are splashing out shareholders money willy nilly and putting in managers who do not care enough to grow the business , the idea of having a manager will never match a owner operator although they have their own version of that but it is not a long term winner because of their business model.

disclosure, I am a pharmacist in business and have had then take over near me, we gained 10% business within a year because of their management style... being uninterested staff who do not really care for the customer

Very interesting post thank you.
I agree that owner operator businesses seem to have it over company run businesses.

**Food4Thought** · 25-06-2015, 07:49 PM

Originally Posted by percy

Very interesting post thank you.
I agree that owner operator businesses seem to have it over company run businesses.

I agree, Owner operators are much more passionate and have a better, personal approach.
Market power, size of network reach.

I love visiting small boutique retail stores, this sector has shrunk dramatically in recent years. Pharmacies, which I have had several friends own and operate successfully, are under the same pressures. Some people I know through work, customers have been pharmacy owners. I know that I prefer personalized service, this normally comes at a cost. Paying a premium to buy out the competition is normal business practice, especially if you can afford it. Briscoes and GXH have some interesting similarities in the approach. Slow and Steady.

Slowely, the little holders sell up, and the bigger guys, accumulate. I see this company doing exceptionally well long term, if they can keep a steady pace on. Discount Pharmacy stores and online competition are certainly a threat. yet I have the feeling that they will take hold of this opportunity and also join in on this business growth area. Current sellers are selling in low volumes, and after Ex Div date. Perhaps a few staff who want to have a warm holiday away from the cold NZ winter, or go to enjoy the snow. No surprises there.

How many brands of pharmacies and blood testing practices/GPS do you see out there? If your sick, you want to get your doctors visit and medication today, not once payment clears and delivery happens. A lot of the people visiting pharmacies and doctors are time poor and in need of the service, so the wallet opens.

Certainly there will be challenges, yet they are doing a darn good job, in my opinion, at working through the implications that their environment puts them against.

This winter will see a huge number of people down with the flu, climate related depressions and spring, could be a wet one if the winter continues like it has started. I don't go to the pharmacy to get my sunscreen, yet I do go there to get my prescriptions when I need them.

Happy Thursday thinkers and doers, looking forward to the weekend.

**Food4Thought** · 09-07-2015, 11:04 AM

Small parcels selling low. Wouldn't be concerned long term. This winters numbers are going to make for interesting figures come the interim 2015 results. Only a couple of percent increases in sales and numbers could spell good improvements in performance.

**Nasi Goreng** · 09-07-2015, 11:24 AM

The most illiquid stock in my portfolio. The thing that prevents me from topping up is this exact reason.

While I don't think current overseas events will have a dramatic effect on GXH, if there is ever a reason that I have to get out of this stock, its going to be real painful.

**James108** · 09-07-2015, 11:42 AM

In my opinion to justify SP >$2.00 earnings growth need to be >5% p.a. Recently GXH have been a disappointment in this department and I don't see that changing in the short term.

Disc: sold out after last report

**benjitara** · 09-07-2015, 11:47 AM

I also sold out last report due to the fact that their core business (pharmacy) continues to struggle to produce profitability while the margins from their medical acquisitions tended to be smaller than I originally thought they would be. This led me to believe I couldn't/wouldn't PURCHASE the stock for it's trading price at the time so I sold out.
A business I monitor closely and I could well be in again if I see better operations in future reporting.

**Food4Thought** · 14-07-2015, 07:03 PM

http://www.stuff.co.nz/business/mone...-the-superrich

Think there are some interesting points in this article that can relate to this enterprise and also the retirement sector, as they do have some synergies. Then again, it is from stuff.

I'm highly optimistic about GXH. Happy guess says $3+ by 2019. There will be a big shake in this sector that will cause a positive for this business. I only go on a hunch from what I see overseas. And ever more so, buyer behavior.

I know there are negative signals for retail, yet that's currently in transition. *Hold*