Milk powder, 2,3,4,5, page-56

Star Combo Pharma aims for ASX vitamin riches.


A company that acquired the Living Healthy vitamins and health supplements brand from pharmacy chain Terry White Chemmart last year wants to make a big shift from being largely a contract manufacturer to a brand builder in its own right.
Star Combo Pharma has raised $7 million in an initial public offering at an issue price of 50¢, and will list on the ASX on Wednesday, with chairman Richard Allely outlining ambitious growth plans.
The company signed a three-year distribution deal with Terry White Chemmart as part of the acquisition where the Living Healthy vitamins brand will be on the shelves of 450 of the group's pharmacies.
Mr Allely said Star Combo currently generated about 70 per cent of its revenues through contract manufacturing for other vitamins companies from a modern facility at Smithfield in western Sydney.

About 30 per cent of its revenues come from its own brands, which include Costar, Amax and J&K. Those three brands are largely sold in gift stores and duty free stores.


"We're looking to twist that around the other way," he said on Tuesday. The company aims to have branded products revenue representing about 70 per cent of the total.
The Living Healthy brand had undergone a rebadging and repackaging, and Star Combo was aiming to accelerate its growth. Between 20 and 30 individual product lines, known as stock-keeping units, would be on the shelves of Terry White Chemmart outlets around Australia.
Mr Allely said while the overall vitamins market in Australia was very competitive, the category was showing solid growth and Star Combo was also eyeing a big push into China, to try to emulate in a smaller way the success of big players such as Blackmores and Swisse.
"We're running pretty fast to get access into the China market," he said.

At the issue price of 50¢, Star Combo has an indicative market capitalisation of $38 million. Mr Allely said the IPO had been oversubscribed and the company had been forced to scale back applications.

The company made a net profit of $1.48 million in 2016-17 from revenues of $9.84 million. Net profit in 2015-16 was $1.59 million from revenues of $9.4 million. The company hasn't made forecasts in its prospectus.
Mr Allely said it was too difficult to make a specific forecast, but with the Living Healthy brand in the Terry White Chemmart pharmacies there was likely to be significant momentum.
"What we are saying is that the growth will be significant," he said.


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