Photo: Ryan Remiorz, The canadian Press
Last November, the shareholders of the pharmacy chain, voted 99.9% for the offer to buy Metro. The sale, however, has not yet obtained the green light from the regulatory authorities.
A lower contribution from the division of generic drugs, as well as expenses of $ 8.5 million related to its marriage with Metro have undermined the profits of the Jean Coutu Group during the third quarter.
For the three-month period ended on 2 December, the pharmacy chain posted a net profit of 42.1 million, or 23 ¢ per share, which represents a decline of approximately 17.5 % compared to the same period last year. For their part, revenues declined, from 763,7 million to 758,9 million.
It is the net income per share for the three-month period ended on 2 December, a decline of approximately 17.5 % compared to the same period last year.
“If you look at our results, they seem to be negative, but they are not quite representative of the performance of our retail sales, which demonstrates the effectiveness of our strategy,” stressed the president and chief executive officer of Jean Coutu, François Coutu, Thursday, during a conference call with analysts. The senior management of the company established at Varennes has not addressed its merger with the Metro store, because the transaction whose closing is expected in the spring — has not yet received the green light from the regulatory authorities.
Sales of establishments that have been open one year rose 3.4 % for the entire network of the company. On the side of the pharmacy, the revenue growth from comparable amounted to 4 % compared to last year, while on the side of the commercial section, they grew by 2.3 %.
Sales of generic drugs Pro Doc were $ 43 million, down compared to 51.1 million in the third quarter of the previous fiscal year. This result is explained in particular by the professional allowances paid to pharmacists owners in Québec by the manufacturers of generic drugs higher up the restoration of the ceiling of 15 % on October 19.
“In our opinion, the Jean Coutu group is in a good position so that it will soon be swallowed by the Metro,” said analyst Keith Howlett, Desjardins capital Markets, in a note sent to its clients. Irene Nattel, of RBC capital Markets, abounded in his sense, minimizing, in a separate paper, the non-recurring charge of $ 5.5 million absorbed by Pro Doc relatively to the stocks held by wholesalers and pharmacists.
Last November, the shareholders of the pharmacy chain, voted 99.9 % for the offers of Metro cash and stock valued at $ 4.5 billion. This result was predictable, since the family Coutu controlled approximately 93 % of the voting rights. The combined business will generate annual sales of approximately $ 16 billion and operate over 1,300 supermarkets and pharmacies in Quebec, Ontario and New Brunswick. Synergies valued at $ 75 million expected to be realized over the next three years.