Bagnall in control of Life Pharmacy

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Multimillionaire investor Andrew Bagnall has moved to a controlling stake in a newly profitable Life Pharmacy.

The NZX-listed pharmacy franchising group last week posted a $61,000 March-year profit, a turnaround from a $570,000 loss the year before and a $6.6 million loss in 2007. The company's balance sheet shows accumulated deficits of $9.6 million.

As part of a recent rights issue that raised $11.6 million, Bagnall's LPL Trustee exercised its rights under a 2007 option agreement to take up an issue of 27.1 million shares, taking its stake to 50.01 percent. Chairwoman Liz Coutts said Bagnall effectively owned around 25 percent of Life Pharmacy's franchised outlets.

Under a 2003 rule change, non-pharmacists may own a maximum 49 percent shareholding in a pharmacy. Life Pharmacy owns 49 percent of its franchised pharmacies, so Bagnall's indirect stake is around half that.

Coutts said much of the profit improvement came from a stronger and more focused marketing programme and improved benefits from the Living Card loyalty programme, which has 250,000 members. Sales grew by 5 per cent and had been strong in both dispensary and retail. Beauty products were regarded as affordable luxuries, Coutts said, performing well even during a recession.

The company also completed the acquisition of Chemist Care Services, which had eight franchisees and has since expanded to 13. The group's Life Pharmacy, Life Metro, Life Outlet and Care Chemist brands now operate 50 outlets, double the number it had last year.

- © Fairfax NZ News