A great set of FY22 results for Probiotic today. It looks like underlying EPS of 16.7 cps was in line with Commsec analyst forecasts of 16.6cps. Great result all the same! Looking forward to revaluing the business shortly.

Source: Commsec 24/08/22

Held: IRL and SM

• Probiotic announced that it will acquire the assets and business of H&H Packaging (“H&H”) for total cash proceeds of (up to) $4 million.
• H&H is a Sydney-based contract packer and manufacturer with a 30-year operating history.
• The acquisition of H&H will deliver new customers to the Probiotec Group including exciting opportunities to service the industrial, chemical and agricultural markets, widening our overall reach into even more end markets. The acquisition will also add plastic moulding capabilities that can be rolled out across the Probiotec business for our own internal needs as well as to our existing client base, adding an element of vertical integration to the Group.
• In time, certain H&H functions may be incorporated into the proposed Sydney site consolidation project.
• H&H is expected to generate Revenue and EBITDA of approximately $6 million and $1 million respectively for the 12 months ended 30 June 2021.
• The acquisition is expected to be immediately EPS accretive (pre-synergies) from completion. The transaction will be funded from cash reserves and completion is expected to occur at the end of July 2021.

Chief Executive Officer of PBP, Mr Wes Stringer comments: “we look forward to welcoming H&H’s employees and customers to the Probiotec Group and continuing to build our manufacturing footprint in Australia via organic growth and further accretive acquisitions".
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About Probiotec
Probiotec Limited is a manufacturer, packer and distributor of a range of prescription and over-the-counter (OTC) pharmaceuticals, complementary medicines and consumer health products, and fast-moving consumer goods. The company owns five manufacturing facilities in Australia and distributes its products both domestically and internationally. Products are manufactured by Probiotec on behalf of a range of clients, including major international pharmaceutical companies.
Further details about Probiotec are available at www.probiotec.com.

ASX Announcement

FY21 Guidance (see table at footer for comparisons)

Revenue: FY21 guidance, $118-$122m 

Underlying EBITDA: $21-$22m

Underlying EPS: 10.0-11.0 cps

• We continue to see a strong level of inquiry from existing and new customers including to onshore manufacturing;
• Pharmaceutical product categories that have been affected by the health measures put in place to respond to Covid-19 are expected to improve progressively through the first half of FY22 and normalise through the second half.
• Demand has already started to return coupled with the clearing of stock on hand in the channel. The latest unfortunate lockdown in Victoria has had a minor negative impact on the Group’s FY21 earnings.
• The Multipack-LJM acquisition was successfully completed in January 2021 and has performed in line with expectations for the first 6 months with its earnings seasonally weighted to the July to December half.
• The Group is now focused on leveraging Multipack-LJM’s capabilities and high-quality customer base to drive the next phase of growth
• The NSW site consolidation strategy is being progressed and we expect this to be materially accretive for shareholders in the medium term
• We continue to assess a range of accretive M&A opportunities, with a focus on bolt-ons that bring new customers, synergy potential or strategic acquisitions that expand our capabilities.

About Probiotec
Probiotec Limited is a manufacturer, packer and distributor of a range of prescription and over-the-counter (OTC) pharmaceuticals, complementary medicines, FMCG and consumer health products. The company owns five manufacturing facilities in Australia and distributes its products both domestically and internationally. Products are manufactured by Probiotec on behalf of a range of clients, including major international companies.

ASX Announcement