U.S. Markets closed

Edited Transcript of EBO.NZ earnings conference call or presentation 21-Feb-17 10:30pm GMT

Thomson Reuters StreetEvents

Interim 2017 EBOS Group Ltd Earnings Presentation

Feb 22, 2017 (Thomson StreetEvents) -- Edited Transcript of EBOS Group Ltd earnings conference call or presentation Tuesday, February 21, 2017 at 10:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Patrick Davies

Ebos Group Limited - CEO

* John Cullity

Ebos Group Limited - CFO

================================================================================

Conference Call Participants

================================================================================

* Chelsea Leadbetter

Forsyth Barr - Analyst

* Stephen Ridgewell

Craigs Investment Partners - Analyst

* Andrew Goodsall

UBS - Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Thank you for standing by and welcome to the EBOS Group Limited half year results conference call. At this time all participants are in a listen only mode. There will be a presentation followed by a question and answer session. (Operator Instructions). I must advise you that this conference is being recorded today, February 22, 2017. I would now like to hand the conference over to your first speaker today, Mr. Patrick Davies, CEO, Ebos Group. Please go ahead.

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [2]

--------------------------------------------------------------------------------

Thank you, and good morning everybody. Our results for the six months ended December 31 have been lodged with the New Zealand and Australian stock exchanges earlier this morning, and we'll walk you through a presentation that's available on both those exchanges and also on our Group website.

I'm joined this morning by John Cullity, Group Chief Financial Officer, and the format is familiar to most of you, the presentation from us will take about 20 minutes. At the end of that there will be a short question and answer, and a replay of the webcast for those that are really interested is going to be available later today on our Group website.

If we could just jump forward now to slide four which gives an overview of the headline numbers for the group for the period ended December 31, 2016. Revenue grew for the six months at a very healthy 17.2% on the prior comparable period, positively impacted again by Hepatitis C medicine sales in Australia, just noting that there's no prior comparable statistics for those products.

Our reported profit after tax of NZD68.8 million rose 7.2%, and when adjusted for the impact of a stronger New Zealand dollar against the Australian dollar, profit after tax grew 10.9% in constant currency for the period.

Pleasingly return on capital employed grew to 16% and the EBOS Board has announced an interim dividend of NZD0.30 cents per share which represents a very healthy 15.4% growth on last year's interim dividend. We footnote on this page that absorbed within these profit numbers is NZD2.4 million of pre-tax costs incurred on the Terry White Chemmart merger which completed on October 31 last year.

Moving forward to slide five, this gives a three year view of the key financial metrics, and we're delighted to be posting fresh highs, particularly given the very strong growth in profit last year. Operating cash flow was in-line with the prior comparable period and our balance sheet is in really good shape, we have modest gearing and ample capacity to pursue further acquisitions, which remains a priority as we execute our strategies across both healthcare and animal care businesses. Our long term approach of having a diversified portfolio of scale businesses has underpinned our growth in recent years and is again evidence in our performance for this period.

Slide six gives a little more detail on the group P&L, also showing the underlying profit and earnings per share. As mentioned, revenue grew very strongly, noting the large impact on our Australian healthcare business unit from the sale of Hepatitis C medicines at lower margins. Net debt at NZD288 million is substantially lower than the prior comparable period, and net debt to EBITDA was down to 1.25 times, although this is broadly in-line with what we reported at June 2016, in fact slightly higher but broadly in-line.

John will talk in a little more detail around the debt and working capital position, and might also touch on the exchange rate shifts which have dampened our profit after tax by NZD2.1 million in the first half.

Slide seven in the presentation now turns to our performance by segment, both in healthcare and animal care where we saw healthy improvements in EBITDA on a constant currency basis healthcare EBITDA was up 10.6% and animal care up 10.7%. Corporate costs shown on this page reflect, the increase reflects the transaction costs of the Terry White Chemmart merger as previously mentioned. The split of earnings by major operating business as seen on the right hand side of this slide, it hasn't changed materially and I'll pull out some relevant points within the healthcare and animal care businesses in the next few slides.

Skipping forward now to slide nine. The healthcare revenue growth of NZD575 million was up 21.5% in constant currency terms. Very large growth in Australia we've touched on with Hepatitis C medicines, and also positive contributions from the Terry White Group now being consolidated within our Group numbers against a more moderate growth in New Zealand. In New Zealand we report our international division where profit is very lumpy, and we are cycling off a high in the prior comparable period, however referencing earlier comments about the benefits of a diverse portfolio we do have contributions from Red Seal acquired in November 2015 which now reports as part of the New Zealand region.

The other dynamic worth noting on this slide is the diluted impact on EBITDA margins of Hepatitis C sales in Australia. These products are very high face but a lower margin, so whilst profitable we do see a dilution of our margins.

Moving to slide 10 and now just for the next few slides giving some key points from the major operating units within the Group. Community Pharmacy, I've mentioned Hepatitis C a couple of times; these products are sold in both our Community Pharmacy business and also in our institutional businesses. Excluding Hep C sales prescription medicine sales were flat with the impact of price depression in the Australian market, in particular impacting on headline revenue. Over-the-counter or non-drug sales declined marginally with a dampening in export demand.

Positive contributions from our investments in warehouse efficiency in Australia, particularly in Victoria and also with the Terry White Group now consolidated into our group numbers assisted overall performance in Community Pharmacy.

In our consumer products businesses we reported very large growth in GOR, or gross operating revenue, as defined at the bottom of that slide, from the Red Seal acquisition and other agency wins in the New Zealand market, and off the small base we're very pleased with the growth in Red Seal exports to China and South Korea in particular. We're continuing to focus on export opportunities for our consumer products business in the years ahead, but just noting we are off of a small base but some good progress there and confidence for the future.

The institutional healthcare business has been impacted by the unpredictable nature of our international activity which I touched on earlier. But our Onelink and Symbion Hospital businesses contributed very positively in the period to lift the growth in revenue and GOR very substantially in that last six month period. Our Contract logistics business delivered modest growth in GOR, mindful of a very strong prior comparable period. The New Zealand operations are continuing to perform well, and our focus in Australia is to bring a new facility online in Sydney later this year to allow capacity to expand further in the Australian market.

Our animal care businesses, if we go forward just a couple of slides, the first half results for animal care were very good. The sustained investment in our key brands has driven excellent revenue and profit improvement, and separately our joint (technical difficulty).

--------------------------------------------------------------------------------

Operator [3]

--------------------------------------------------------------------------------

Pardon me, this is the operator, we've just had the speaker line disconnected. One moment until we resolve this issue. Thank you for holding, we will now recommence the presentation.

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [4]

--------------------------------------------------------------------------------

Hello everybody, it's Patrick Davies speaking. Apologies, we had a line drop out here. I hope we've got you all back online. I think the last slide that we were talking to was to close out on our animal care businesses. For those I'm just assuming that perhaps didn't cover that I'll quickly recap. The first half results for animal care were very good, we have sustained our investment in key brands which has driven excellent revenue and profit improvement and our joint venture here in New Zealand for the Animates Retail Group again lifted profitability.

BlackHawk revenue grew 48% on the back of a large marketing spend, introduction of new product and expanded ranging in key retailers. Vitapet again achieved double digit revenue growth and our veterinary wholesaler Lyppard was steady on the prior period in a very active and very competitive market.

I'll just hand to John Cullity now to take us through a little more detail on the cash flow balance sheet and debt levels.

--------------------------------------------------------------------------------

John Cullity, Ebos Group Limited - CFO [5]

--------------------------------------------------------------------------------

Okay thank you, Patrick, take two. So now on slide 16, for everyone's benefit, and talking about the cash flow performance of the Group. So following on from FY2016 when we had a very significant decrease in our net debt levels, we've also been able to report a very solid cash result for this first half.

Cash from operating activities is NZD48 million for the half, representing a slight increase on the PCP. During the period you'll notice that we spent NZD16 million on capital expenditure and within that spend was NZD11.7 million on our new Brisbane DC. We've now spent NZD18 million in total on this project and our forecast total spend on this one project is NZD58 million.

The business does not typically require heavy spend on CapEx however over the next two financial years we are progressing on two growth projects being the new Brisbane DC as well as our new Contract Logistics facility in Sydney, New South Wales.

We are now expecting CapEx to be approximately NZD45 million to NZD50 million in full year FY2017. So it's down from a previous estimate of about NZD70 million that we noted at the end of last year. We're also forecasting that in FY2018 we think we'll spend about NZD45 million in CapEx on FY2018. So the spend that was earmarked for FY2017 has been slightly delayed, and some of that will be pushed into FY2018.

In the cash flow you can also see that we've outlayed just under NZD17.5 million on the Terry White Chemmart merger, and we paid dividends of just over NZD49 million. All of that resulted in an increase in our net debt levels of NZD40.5 million. We've also noted in the presentation that we've seen a moderation in the sales of our Hepatitis C medicines throughout this half, and this moderation will in effect have an impact on our working capital, so it will result in a higher net working capital for the group and have a consequential negative impact on our cash flow.

Therefore we are flagging that we're not expecting our full year cash result to be anywhere near as strong as last year, which did include a significant one-off cash benefit from this activity.

On page 17 you can see the working capital metrics and you can see our vigilance on managing working capital is very strong with a cash conversion of 17 days representing a significant reduction on the December 2015 levels. As was evident back in June 2016 we've had a significant reduction in the balance of our net working capital which is predominantly due to the Hepatitis C business in Australia having a material impact on both our debtors and creditors balances.

In terms of debtor provision we added another NZD400,000 to the provision through the P&L for the half year, and that's standard practice for us. Our total debtor provisioning of the balance sheet is now approximately just over NZD19 million. We've not noticed any deterioration in our debtor book, and in fact we had a very strong cash collection to the first half of this financial year. All of that said we will have some bad debt write-offs in the full year to June 30, but this is normal and the amount of any write-off will be immaterial and will be offset against the provision account in the balance sheet and will not require any additional charge through the P&L.

Turning to page 18 we finish the period with net debt at NZD288 million, a slight increase above the June 2016 levels, and our net debt to EBITDA ratio increased slightly to 1.25 times from the 1.1 at June 2016. Our gearing ratio at the end of December 2016 is still very conservative at 20%. Now return on capital has been effectively maintained at the high we recorded at June of above 16%, especially when you adjust for the NZD18 million that we've spent on a new Brisbane DC facility.

From a capital management perspective there's been no change to our approach or thinking here in providing increased returns to shareholders via higher dividends and a focus on using our balance sheet strength to pursue value adding M&A opportunities. We have the ability to comfortably debt finance NZD300 million of acquisitions.

On page 19 we've got earnings per share and dividend statistics. So as mentioned previously we have recorded very strong growth in our earnings per share, just over 10% on a constant currency basis, and just under 13% on an underlying basis. The Board has declared an interim dividend of NZD0.30 cents per share, which represents a 15.4% increase on the PCP. The dividend payout ratio is 66% which is within the Board's guidelines of paying between 60% to 70% of NPAT.

The interim dividend will be imputed to 25% for New Zealand shareholders and franked 100% for Australian resident shareholders. Once again the dividend reinvestment plan will not be operable for this interim dividend.

A couple of other items to note, as Patrick mentioned the impact of currency did have a significant impact on our reported results for the half year, and the details of that are outlined on page 24, so in effect on the translation of our earnings into New Zealand dollars the average exchange rate for the period was up by NZD0.033 on the PCP, and that negatively impacted our reported EBITDA and NPAT by NZD3.7 million and NZD2 million respectively.

Then on page 25 we provided a little reconciliation there from our reported results to our underlying results on both the NPAT line and the EBITDA line.

So with that I'll hand back to Patrick.

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [6]

--------------------------------------------------------------------------------

Thanks very much, John. Just a couple of slides to wrap up ahead of any questions. In summary these are very pleasing results. We've achieved really good growth in the six month period, particularly on top of last year's performance which was particularly good for the Group, with growth coming from a number of businesses across healthcare and animal care. Our strategy over many years to pursue a diverse range of businesses is a strength of the Group, and this is evident in the results we're now releasing.

The more recent acquisitions are contributing really well, notably BlackHawk and Red Seal. The most recent announcement of the Terry White Chemmart merger in late 2016 is of strategic importance to us, and in the years ahead I'm sure will be a topic of more color and conversation for our Group.

In both Australia and New Zealand we are continuing to invest back into our businesses, so it's not only an approach of acquiring externally, we're investing consistently back into our businesses. The most recent example of a major new facility for our Group was in Melbourne in Australia where we brought some new technology to the market area in Australia and that investment has helped manage costs and lift productivity ahead of our expectations at that site and will bring long term benefit.

John mentioned that we are well advanced now or well underway in a new site for Brisbane and another one in Sydney for our Contract Logistics business in the next year and a half. That approach of making sure we are bringing the very best in logistics infrastructure to our business is ongoing, and we expect long term benefit from that activity.

The balance sheet's in good shape, cash flow is good with modest gearing, and we're well poised for further investment to expand again for the right opportunity, and as mentioned the dividend picking up nicely for the interim period. So our approach really in many regards has not changed; I think the results are evident in the numbers we've shown today.

The last slide from me ahead of any questions is number 22, our outlook. We have reported a good start to the financial year across both healthcare and animal care divisions.

At our annual meeting in October last year we provided guidance of underlying constant currency net profit after tax growth for the year of between 7% and 10% compared to the prior period. We now expect our full year financial year FY2017 earnings to be at the upper end of this range.

On that note I'll close the presentation but I will open through the moderator for any questions in the few minutes we have left.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Thank you. (Operator Instructions). Your first question comes from Chelsea Leadbetter of Forsyth Barr, please go ahead.

--------------------------------------------------------------------------------

Chelsea Leadbetter, Forsyth Barr - Analyst [2]

--------------------------------------------------------------------------------

Thanks, moderator, and morning guys. Just firstly if we can start with the community pharmacy division, just trying to get a feel for what you consider the underlying growth rate in that segment, I mean if we adjust for the Hep C and the Terry White Chemmart merger, what does that look like?

--------------------------------------------------------------------------------

John Cullity, Ebos Group Limited - CFO [3]

--------------------------------------------------------------------------------

Probably about 1% to 2%, Chelsea, really in terms of that. Particularly in this period because you might recall in FY2016 we had very strong growth in the OTC channel, and that's pulled back a bit so we haven't had that growth in this period, so it's probably come off its traditional norms a bit in terms of that growth rate.

--------------------------------------------------------------------------------

Chelsea Leadbetter, Forsyth Barr - Analyst [4]

--------------------------------------------------------------------------------

Okay, and just looking forward and particularly around OTC, can you give us a bit more color on how you're thinking about the second half and thereafter and how early trading in that OTC market and maybe in the prescription medicine space as well how that's looking?

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [5]

--------------------------------------------------------------------------------

I think OTC is a little hard to pick to be honest, I'm not trying to talk it down or up. You'd be aware from other companies reporting that the export as we refer to it, the grey market if you will, has come off a very high run-rate from a year or so ago and it's still a bit bumpy to be honest, but we wouldn't imagine that it would be radically different from what we saw in the first half. If anything there might be a little bit of upside but I don't think that's material.

Prescription activity is most-- well volume to one side but the value is obviously impacted by the Australian Government price reform agenda. That was pretty strong in the last -- well has been pretty strong over the last 18 months. As we look forward we see that moderating a little bit absent anything new being announced, and I'm not aware of anything to share on that front today. So I think the face value on prescription sales will still be impacted by that but that will ease up a little bit in the next 12 to 18 months, Chelsea.

--------------------------------------------------------------------------------

Chelsea Leadbetter, Forsyth Barr - Analyst [6]

--------------------------------------------------------------------------------

Thank you, and just last area of questions around animal care, obviously a pretty strong result from BlackHawk in particular. How much further can you take that brand. Is there still quite a bit of opportunity for growth across the network, or are you seeing the key upside that you were thinking when you did acquire it?

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [7]

--------------------------------------------------------------------------------

Well in truth's Blackhawk's kicked on stronger than we'd anticipated, and we took the opportunity in this period to really put our foot down on marketing-- when I say foot down, I mean accelerate the marketing spend to support the brand.

It's true that we've achieved some of the things that we set out to achieve for BlackHawk, but we still hold a pretty modest share ultimately of the premium food market for -- you know, in the animal care sector. So I think we've got market share opportunities. It's not an easy market to run at those levels of growth obviously but that's quite-- well very, very strong growth in any product for a sustained period.

But I wouldn't say we were out of scope there but certainly we've had some of the growth a little quicker than we'd anticipated, but we're still confident we can do more with BlackHawk.

--------------------------------------------------------------------------------

Chelsea Leadbetter, Forsyth Barr - Analyst [8]

--------------------------------------------------------------------------------

Okay I'll leave it there for now, but thanks guys, and great result.

--------------------------------------------------------------------------------

Operator [9]

--------------------------------------------------------------------------------

Your next question comes from Stephen Ridgewell from Craigs Investment Partners, please go ahead.

--------------------------------------------------------------------------------

Stephen Ridgewell, Craigs Investment Partners - Analyst [10]

--------------------------------------------------------------------------------

Thanks, and just to echo Chelsea's comment, congratulations to the management team on another period of good growth. I just wanted to get a high level split if I could of the 13% constant currency NPAT growth in the first half, if you[back out the Terry White acquisition costs, roughly what was the breakout between organic growth and growth from acquisition, and particularly from Red Seal and Terry White? So there's about NZD1 million earnings from Terry White, but unclear what the Red Seal contribution was on the first half, that'd be useful thanks.

--------------------------------------------------------------------------------

John Cullity, Ebos Group Limited - CFO [11]

--------------------------------------------------------------------------------

Your growth rate, Stephen, if you exclude the acquisition is about 9.5% at the NPAT, underlying NPAT line.

--------------------------------------------------------------------------------

Stephen Ridgewell, Craigs Investment Partners - Analyst [12]

--------------------------------------------------------------------------------

Great thanks, and Chelsea actually asked a couple of questions on the pharmacy business which I had, but maybe just moving to the animal care business, Mars is recently trying to acquire VCA for $7.7 billion, they've obviously got a large branded pet food business, and seem to see strategic benefits in owning the vet clinics as well. Just interested in EBOS's thoughts on this given that obviously BlackHawk is growing quickly and you've got the Masterpet business as well. Is acquisition of vet clinics something that is on the radar or something that you would consider strategically useful for growing that animal care business if they were to become available at the right price and the right kind of fit? Is that something you would consider in the pipe?

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [13]

--------------------------------------------------------------------------------

That's an interesting question and that Mars move is phenomenal really. The shift in via the I guess the continuation of their investment beyond food into services.

In our world, here in the New Zealand market, our joint venture with Animates is already exposing us to that so they do have some co-located veterinary clinics at the moment, about 10. There is, I understand, a state of ambition to continue that in the Animates business, and we're obviously supportive of that. In the Australian market we're not an owner of veterinary clinics, and in truth I don't know that I'd see it necessarily as supportive of -- or as our strategy to grow our branded product sales in the market.

But the sophistication, there is a little bit of a difference in truth, I won't bore you with the details, but the New Zealand market and the Australian market for purchase of products for your pets is slightly different; there's a higher veterinarian involvement in the sale of products in the New Zealand than in Australia.

In the Australian market you'd probably be aware there's a lot of investment in pet retailing and there are some very sophisticated growing retail groups in that market, and our product sales are benefiting growing good partnerships, they're good ranging and obviously good products coming to the market through those guys.

So for us to acquire vet clinics in the Australian market would be a bit of a shift from where we are today. It's not currently on our radar to be honest, and the prices there we are aware have been pretty aggressive, and I note that's held back a little bit some of the growth in clinic acquisitions for Green Cross Limited. So it's a pretty active market, pretty full prices, so we watch but we're not participating at this point.

--------------------------------------------------------------------------------

Stephen Ridgewell, Craigs Investment Partners - Analyst [14]

--------------------------------------------------------------------------------

Thanks for that, and just generally are you starting to see prices come off a little bit for over the counter or branded businesses more generally even going back to the human health businesses, given what we've seen in the listed space, and a lot of those businesses have been getting quite material (d-rates) in the last six months or so. Have you started to see that coming through in expectations from vendors the private businesses that you might be talking to, is that happening?

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [15]

--------------------------------------------------------------------------------

No, one word answer, no. The price for some of the assets that we've been interested in over the last year or so have been very (full), and I note with interest as you say that some of the really big names have seen those that are listed are seeing some re-ratings, but I haven't seen that yet on the targets that we've had a look at or opportunities that we've had a look at, Stephen.

--------------------------------------------------------------------------------

Stephen Ridgewell, Craigs Investment Partners - Analyst [16]

--------------------------------------------------------------------------------

Great thanks, and just this one last line of questioning on Red Seal. So 8.4% growth year-on-year, is that business still growing -- you noted there was some good export momentum directly into market in Asia, but is that business still growing in the domestic market, and particularly if we think about the June half year versus December half, was that seeing sequential growth in that brand or is that feeling the ill-effects that we're seeing across the market for these sorts of businesses and then relatedly has EBOS been able to expand distribution of the Red Seal products into Australia thanks?

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [17]

--------------------------------------------------------------------------------

To answer both components, in the New Zealand market Red Seal continues to perform really well, growth is around that 8% to 9% in the kiwi market. In Australia we've seen some modest expansion of Red Seal. We remain very optimistic about what we can do with Red Seal in Australia in the longer term, but nothing material in these results. I think as we look forward a year or two we'd like to be giving you some pretty good guidance on that.

--------------------------------------------------------------------------------

Stephen Ridgewell, Craigs Investment Partners - Analyst [18]

--------------------------------------------------------------------------------

Great thanks very much.

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [19]

--------------------------------------------------------------------------------

Thanks Stephen.

--------------------------------------------------------------------------------

Operator [20]

--------------------------------------------------------------------------------

Your next question comes from Andrew Goodsall from UBS, please go ahead.

--------------------------------------------------------------------------------

Andrew Goodsall, UBS - Analyst [21]

--------------------------------------------------------------------------------

Thanks very much guys, thanks for taking my question, and apologies if some of my questions have been answered. I'm just trying to understand the profile of Hep C and how you see that playing out both at revenue and margin perhaps in the next year or two?

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [22]

--------------------------------------------------------------------------------

Andrew, we're probably a little bit blind on it to be honest with you. We saw an explosive kick start, some moderation in current trading, yet when you look at it from an elevated view the Kirby Institute report out yesterday suggests that about, I'm not sure, 12%, 13%, 14% of the available patient audience has had some form of hepatitis C medicine treatment in the period since these products came to market. They estimate the market to be 230,000 people in the Australian population, 33,000 to date having been treated.

The pace at which-- and the intention by the way which is positive of course is that the government is talking about eradicating Hepatitis C, so if that requires each person to receive some treatment then over the next decade we're going to see a pretty solid stream of activity.

What we don't know is, is that a constant stream? Is there further education, further access through awareness and promoting the products more broadly? Don't know, but I think from our point of view some moderation from what we saw initially is going to settle in, but this thing won't quickly evaporate, and unless the government is looking at some quite different way of bringing the products to market, some quite different funding or access structure then what we see today will roll forwards for a few years. For us as people may be aware we participate three ways with this product and it just probably underlines our approach to diversity.

We are the exclusive pre-wholesaler for Gilead for those Hepatitis C products in Australia. We sell them in the pharmacy channel and we sell them in the hospital channel, and we're benefitting from that diversity in this example.

--------------------------------------------------------------------------------

Andrew Goodsall, UBS - Analyst [23]

--------------------------------------------------------------------------------

One of your competitors has been active talking about expansion to the hospital market. Are you seeing any impacts around market share at hospital distribution?

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [24]

--------------------------------------------------------------------------------

We haven't at the moment. We obviously keep a keen eye on that. The hospital business unit for us in both countries but certainly in Australia where there's been a new competitor we've not really seen much change, Andrew, at this point.

--------------------------------------------------------------------------------

Andrew Goodsall, UBS - Analyst [25]

--------------------------------------------------------------------------------

My final question was just it's probably early days but anything coming out on the review?

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [26]

--------------------------------------------------------------------------------

No, absolutely nothing, it's quiet publicly on that front at the moment. I think it--

--------------------------------------------------------------------------------

Andrew Goodsall, UBS - Analyst [27]

--------------------------------------------------------------------------------

Delayed.

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [28]

--------------------------------------------------------------------------------

We just wait like everybody else to see when that might pop out. I really don't have any greater insight on that.

--------------------------------------------------------------------------------

Andrew Goodsall, UBS - Analyst [29]

--------------------------------------------------------------------------------

No problem, terrific, great result thank you very much.

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [30]

--------------------------------------------------------------------------------

Thanks, Andrew.

--------------------------------------------------------------------------------

Operator [31]

--------------------------------------------------------------------------------

There are no further questions at this time, I'll now hand back to Mr. Davies for closing remarks.

--------------------------------------------------------------------------------

Patrick Davies, Ebos Group Limited - CEO [32]

--------------------------------------------------------------------------------

Thanks very much everybody for joining us this morning. Sincere apologies for the little glitch in the middle there, I hope you didn't miss too much if anything from the presentation material. As mentioned there is a replay available on our website later today and on that note we'll call it quits for today, thanks very much.