GXH - Green Cross Health (formerly PHB - Pharmacybrands)

[Food4Thought]

This is prior to a exceptionally well performing year at a guess...

Oh heavens... This is so good

Speculators can even take a good gamble with a 15 cent special dividend for on the book holders by 7 August... Payment Mid August...

[Buffett Jr]

How much room for growth is there for GXH?

Being an NZ based business, there is only so much acquisitions they can complete without straying from their core business.

[BlackPeter]

How much room for growth is there for GXH?

Being an NZ based business, there is only so much acquisitions they can complete without straying from their core business.

Good question. I guess their pharmacy wing looks quite saturated. Probably still lots of opportunities in the rest of the medical market (medical centre's, care), but they have not yet proven that they are able to make money in these other areas.

I would see as well lots of potential in increasing efficiencies in the pharmacy market. From a user perspective - they are are hopelessly inefficient compared to many overseas pharmacies, but this might be as well related to requirements of the NZ health system.

So I guess, I do see potential in NZ for a company in this industry to grow their profits, but I am not sure yet, whether GXH management demonstrated so far the skills to utilise this potential.

[Buffett Jr]

I've looked into companies that grow primarily by acquisition and also held some. When they start to sway from their bread and butter business, they tend to not do so well in terms of margins and return on incremental capital. Feel this might be the case with GXH.

Other thing is in order to grow eps, they start to pay more P/E multiples for the businesses they acquire.

[BlackPeter]

Director buying (roughly 25k shares): https://www.nzx.com/files/attachments/240188.pdf

[Jerry]

Ingenuous question here. Why did they give out such a great special dividend when their borrowings are so high?

[Lewylewylewy]

What's the debt gearing on gxh?

[BlackPeter]

What's the debt gearing on gxh?

liabilities to total assets was 59% at last balance date (March 2016). Quite normal I would have thought ...

[winner69]

What's the debt gearing on gxh?

You think $73m debt v $94m equity too high?

I assume you suggesting that is an issue.

[BlackPeter]

Directors don't seem to be concerned about the gearing ...

Both Andrew Bagnall as well as
https://www.nzx.com/files/attachments/245710.pdf

Peter Merton slightly pop up their 43,6m odd shares (each) by roughly 31600 shares:
https://www.nzx.com/files/attachments/245711.pdf

(Not sure - could be DRP or director fees, but still good sign - they certainly have skin in the game)