Earlier in the month Australian Pharmaceutical Industries Ltd (ASX: API) provided the market with impressive full year guidance. Today the owner and operator of the Priceline, Soul Pattinson, and Pharmacist Advice brands duly delivered on its word and more.

For FY 2016 the company produced underlying net profit after tax growth of 18% to $51.4 million, which beat its prior guidance of $51 million. Earnings per share came in 20.5% higher year on year at 10.6 cents.

In its previous update management advised that net debt at the end of its financial year would be less than $30 million. Once again management has outdone itself and reduced net debt by a massive $44.9 million to $25.9 million.

In FY 2017 it will continue to pay down debt and expects to be net cash positive by the end of FY 2017 subject to capital management plans.

Driving the strong earnings growth has been the company’s Priceline brand. The strong demand has seen the store network expand by 22 stores to a total of 442 stores during FY 2016. Twenty more stores are expected to open in FY 2017.

Overall Priceline sales for the period increased 7.6% to $1.15 billion and comparable stores sales growth was 2.8%. Including dispensary sales, overall sales were approximately $2 billion and up 11.7% on the prior year.

A lot of this success comes down to the fact that Priceline has been winning market share in key categories such as colour cosmetics, skincare, over-the-counter health, and prescriptions.

The company’s pharmacy distribution segment performed strongly in FY 2016 as well. Revenues grew by 11.2% to $2.75 billion. As the segment had been largely flat in the last three years, this was great to see. The launch of new high-value Hepatitis C treatments was a key catalyst in the growth.

A final fully franked dividend of 3.5 cents per share has been declared, meaning its full year dividend is 33% higher than last year at 6 cents per share. Moving forward management intends on lifting its payout ratio to 60%.

Although it hasn’t provided any firm earnings guidance for FY 2017, management appears confident that the strong organic growth will continue.

So with its shares changing hands at just 18x full year earnings, I personally feel Australian Pharmaceutical Industries is a bit of bargain right now. Especially with rival Sigma Pharmaceutical Limited (ASX: SIP) trading at 27x full year earnings.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.