Why the Australian Pharmaceutical Industries Ltd share price is rocketing today

The Australian Pharmaceutical Industries Ltd (ASX:API) share price could rally following a promising half-year report.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Australian Pharmaceutical Industries Ltd (ASX: API) share price could rally following a promising half-year report released to the market today. 

Here are the key takeaways from the API half year report:

  • Net profit rose 27% to $29.1 million
  • The Priceline store network increased to 450 stores
  • A fully franked dividend of 3.5 cents per share is payable, up 40% on the same period last year

Australian Pharmaceutical Industries is the name behind brands like Priceline Pharmacy, Soul Pattinson Chemist, Pharmacist Advice and Club Premium.

During the half, API said a 25-store rollout buoyed returns in what was a challenging consumer environment.

"We have increased NPAT and returns to shareholders through organic growth in our Priceline Pharmacy network, despite the slower retail conditions in 2017, while generating cash and sustainable returns through our pharmacy distribution business," API CEO Richard Vincent said. "The strength of the Priceline Pharmacy brand continues to attract independent pharmacists to our network and the pipeline of potential partners remains robust."

Pleasingly, the company's board resolved to declare a dividend of 3.5 cents per share, fully franked, which is payable June 2nd.

Looking ahead, the company expects to expand its pharmacy network by a further 20 stores, and generate operational improvements, offering an expected net profit uplift of 10%.

Buy, Hold or Sell

The API share price has rallied strongly over the past five years, up over 550%. The company's gains have come from new store rollouts and ongoing distribution and retail growth.

Despite its strong gains to date, however, I think low-risk investors could get a superior exposure to API and other popular ASX shares by buying Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which is a diversified holding company. Indeed, while API could go on to beat the market from today's prices, I'd prefer to get exposure through Soul Patts.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen encourages your feedback. You can follow him on Twitter @OwenRask. The Motley Fool Australia owns shares of Washington H. Soul Pattinson and Company Limited. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »