for hippies only

Don't be square.

http://www.brr.com.au/HEA/health-corporation-limited

Health Corporation's Chairman, Mr Graham Dunkley, said proceeds from the IPO would fund the expansion of what is already a profitable and established business.

On announcing the IPO in early November, Mr Dunkley said,

"On listing Health Corporation, the board's intention is to accelerate earnings-per-share growth by funding passionate pharmacists into their own retail businesses and by expanding its franchise network under the Health Information Pharmacy (HIP) brand in Australia's fragmented pharmacy market".

"The funds raised through this offer will be used to embark upon an immediate growth phase to secure a greater asset and revenue base".

To that end, Health Corporation is pleased to also announce today, as part of its ongoing growth strategy that the number of franchised pharmacies has increased from 25 at the time the IPO was announced to 27 prior to listing the company on Thursday 21 December.

In commenting on these additions to the store franchise operations, Managing Director of Health Corporation Limited, Mr Ken Lee said,

"We have just settled 2 stores under the HIP franchise with 3 more under contract and several in the pipeline for 2007".

"This reflects the addition of 2 new stores under the Health Information Pharmacy (HIP) brand with one in Sydney and the other in South East Queensland".

Since it commenced operations in 2002, the HIP brand has been developed as a unique franchise system providing numerous business systems and mentoring services enabling pharmacists to run their businesses more profitably whilst delivering superior healthcare services to their customers.

The company believes that it can quickly expand the franchise network to at least 40 pharmacies with an objective of having 100 pharmacies nationwide in the medium term.

"Initial plans are for between 12 and 24 pharmacies to join in the next year or two, either through acquisition or through a franchise arrangement", Mr Dunkley said.

In commenting on the franchise and finance model Ken Lee, Health Corporation's Managing Director commented,

"Health Information Pharmacy was created to improve the health care of communities via the active use of a pharmacist's medical knowledge. The increasing pressures of business operations and potential declining profits faced by pharmacists were also factors crucial to the development of a professional pharmacy business model".

"The company has sourced passionate, entrepreneurial pharmacists who will underpin the expansion of the company. Uniquely, each pharmacist is personally trained by an accredited Business Coach to maximise growth potential".

"This business model facilitates delivery of exceptional care and lifelong relationships, enabling Health Information Pharmacy businesses to clearly differentiate themselves from a high volume, impersonal, supermarket-based pharmacy or commodity retailer, and gain market share".

http://www.hip.com.au

Fighting fit

December 22, 2006

Health Corporation (HEA) 68c

CONSOLIDATION plays in the health sector are the new black: like those bug-eyed sunglasses which will be superseded by the slimline version next year, albeit subtly different from the minimalist shades from last time around so fashionistas can't use the same pair again.
Coming back to health, Health Corporation is trying to do with pharmacists what Vision Group is doing with eye doctors or what Capitol Health is attempting with dentists: corralling chemists under a consistent brand name known as Health Information Pharmacy (HIP).

The nation's 5000 or so apothecaries have attracted the gaze of consolidators before: Australian Pharmaceutical Industries tried an ill-fated model of persuading chemists to become front-of-shop purveyors of soap on a rope and strawberry-flavoured condoms.

Health Corp's model differs in that the pharmacists don't have to stray from their mortar-and-pestle roots: growth is based on add-on services such as weight-loss or stop-smoking programs.

Health Corp's business model is based on a franchise model: pharmas pay an upfront fee averaging $95,000.

According to Health Corp chief Ken Lee, 60 per cent of chemist owners are aged over 55. The young graduates who want to take over typically need $2million to buy an outlet, which is hard to amass from casual shifts at Hungry Jack's.

Health Corp thus provides the financing, as well as business coaching and group buying power to match the likes of drug distributors Symbion and Sigma Pharmaceutical.

Health Corp currently has 27 chemists in its networks and aims to build to 100 outlets over the next two years.

"Initial plans are for between 12 and 24 pharmacists to join in the next year or two, either through acquisition or through a franchise arrangement," Lee says.

Lee, a second-generation chemist, says Health Corp has attracted chemists from the other banner groups (Amcal, Guardian and the like) and the independents. The register is dominated by the chemists and the 35,000 members of the customer loyalty program.

Health Corp's $3.3 million raising yesterday ended in the money at 68c a share, well up on the 50c offer price.

Earnings-wise, Health Corp made $250,000 last year but isn't game to forecast any numbers. We rate Health Corp a SPECULATIVE BUY, but readers should be aware Criterion was convinced by API's strategy before it went seriously pear-shaped.

http://www.theaustralian.news.com.au/story...7-23634,00.html