EBOS Group (ASX:EBO) used its FY2026 first-half results call to reaffirm full-year earnings guidance while highlighting progress on its distribution centre (DC) renewal program, continued revenue momentum in healthcare and animal care, and expectations for stronger cash flow once peak investment tapers off.
Guidance reaffirmed as EBITDA rises and revenue jumps
Group CEO Adam Hall said the company’s FY2026 underlying EBITDA guidance of AUD 615 million to AUD 635 million was reaffirmed, with first-half underlying EBITDA of AUD 300 million described as consistent with the company’s expectations. Hall said management had anticipated cost stabilization through the first half and noted that is what the business is now seeing.
- Revenue up 13% to AUD 6.8 billion
- Underlying EBITDA up 3.2% to AUD 300 million
- Underlying NPAT of AUD 125 million, down from AUD 131 million in the prior period
- Statutory NPAT of AUD 125 million, up 13% due to lower net non-recurring costs than last year
- Leverage of 2.2x, within the company’s target range
- Interim dividend maintained at NZD 0.57 per share
Hall said underlying NPAT softness was expected, reflecting the DC renewal investment cycle and timing factors. CFO Alistair Gray added that depreciation and amortization rose to AUD 67 million, consistent with guidance and reflecting capital investment in the DC renewal program, while net finance costs increased to AUD 58 million due to higher lease interest and funding costs tied to the program.
DC Renewal Program: Kemps Creek operational, remaining sites due by end of FY26
Management repeatedly pointed to the DC Renewal Program as both a near-term drag through transition costs and a medium-term margin and productivity opportunity. Gray said six of eight distribution centres had been completed, with the largest and most complex facility, Kemps Creek, operational from October and delivered “on time and on budget,” performing in line with expectations.
The remaining two sites were described as on track to be operational by the end of FY2026, with optimization expected to continue into the first half of FY2027. Hall also cited Perth HCL and Auckland Onelink as sites expected to come online in the coming months.
In Q&A, Gray addressed analyst questions on one-off items, noting that restructuring and site transition costs rose to AUD 20 million from AUD 10 million a year ago. He said the costs were tied to the continued delivery of the DC program, including make-good costs on exiting existing sites and costs of setting up new sites. Gray said these should reduce in the second half after completion of the Kemps Creek transition and “materially reduce” from FY2027 as the program concludes.
Healthcare: growth in GLP-1s and high-value medicines, margin mix pressures and cost discipline
EBOS’ healthcare segment delivered underlying EBITDA of AUD 254 million, up 1.3%. Hall said the result reflected strong revenue growth and disciplined cost management, offset by mixed pressures from growth in high-value medicines and the DC program.
Hall said healthcare revenue increased 11.1% and gross operating revenue (GOR) rose 7.3%. He noted that accelerating high-value medicines create an “arithmetic decline” in GOR percentage margin due to higher revenue, but added that EBOS still gained GOR dollars in absolute terms. Competition in community pharmacy was also cited as a margin headwind, partly offset by strength in Medical Technology and the TerryWhite Chemmart network.
On costs, Hall highlighted that OpEx as a percentage of revenue was flat versus the prior comparable period and improved by 30 basis points compared to the second half of FY2025. Gray similarly said underlying operating expenditure was well controlled, improving by 30 basis points versus H2 FY25 and 10 basis points versus H1 FY25.
Within community pharmacy, Hall said revenue rose 14.8% and GOR increased 7.5%, driven primarily by sustained demand for GLP-1s and other high-value medicines. He said GOR margin declined 60 basis points, reiterating that competition in the pharmacy wholesale market was expected to remain elevated, while adding that EBOS had retained key customer contracts.
Retail Pharmacy Brands expands to 782 stores; MediAdvice investment added
Retail Pharmacy Brands was described by management as a “standout performer.” Hall said the TerryWhite Chemmart network reached $1.5 billion in sales for the half, up 9.8%, with like-for-like growth of 8.8%. Dispensary sales rose 11.5%, with like-for-like growth of 10.4%.
During the half, EBOS made a majority investment in MediAdvice, a pharmacy management group with around 80 pharmacies in New South Wales. Hall said the acquisition was intended to expand EBOS’ pharmacy reach and highlighted planned synergies in merchandising and retail media, while indicating the pharmacies would not be converted to the TerryWhite banner.
Across EBOS’ retail pharmacy networks, Hall said store count reached 782, reflecting 89 net new stores in the half. He also pointed to service and digital metrics, including 20% growth in flu vaccinations, 104 pharmacist prescribers across the network, 200 new digital screens installed across 100 pharmacies, and 817,000 online transactions in the half (up about 39%).
Animal Care and Contract Logistics deliver strong growth; acquisitions remain a focus
Animal Care underlying EBITDA rose 15.1% to AUD 68 million. Hall said segment revenue increased 48.3% to AUD 451 million, reflecting branded performance and the contribution from SVS. Excluding SVS, he said revenue grew 5.5%. Hall noted branded growth was supported by new product development, including new Black Hawk freeze-dried and air-dried ranges, which he said were performing ahead of expectations.
Contract logistics also posted a strong half, with Hall reporting GOR up 13.5%, driven by principal wins in Australia and New Zealand and supported by infrastructure capability improvements, including expanded cold chain storage.
On capital allocation, Gray said EBOS had approximately AUD 930 million of undrawn committed bank facilities and ample covenant headroom, and had refinanced part of its debt facilities, extending weighted average maturity to 3.3 years. Management also highlighted AUD 70 million deployed in bolt-on acquisitions during the half, which Gray said were expected to be “EPS accretive immediately.”
Looking ahead, Hall and Gray said CapEx is expected to step down materially as the investment cycle ends. Hall said CapEx is expected to be about 30% lower in FY2027, while Gray said it is expected to reduce by circa 13% as the DC renewal program concludes. Both executives said improved productivity, normalizing transition activity, and easing working-capital impacts should support improved cash conversion from FY2027.
About EBOS Group (ASX:EBO)
EBOS Group Limited engages in the marketing, wholesale, and distribution of healthcare, medical, pharmaceutical, and animal care products in Australia, New Zealand, and Southeast Asia. It operates through Healthcare and Animal Care segments. The company provides healthcare logistics; medication management solutions; pharmacy management software; loyalty, generics, compliance, business intelligence, and store software services; and health communications, programs, and consultancy services. It also offers community based health care services and programs; vitamins, minerals and supplements, herbal and fruit teas, and natural toothpastes, as well as functional foods, including molasses and manuka honey; Pharmacy Choice, a five step integrated retail program for independent pharmacies; and healthSAVE, a community pharmacy banner that helps members drive their retail businesses.
