Colombo Pharmacy to say no to prescriptions!

The Colombo Pharmacy Company (PHAR) is to discontinue the business it was founded on owing to poor prospects and focus on those which are more attractive subject to shareholder approval.

The company, which runs the popular City Dispensary chain, yesterday announced that the Board of Directors has resolved to discontinue the pharmaceutical operations which have been making losses subject to shareholder approval by way of a special resolution at a General Meeting to be held in the near future.

The company will continue to engage in the business of property development in the future.

The planned move and approval from shareholders would result in a transaction or series of related transactions which have the purpose or effect of substantially altering the nature of the business carried out by the company.

The move comes hot on the heels of the control of PHAR’s parent Environmental Resources Investments (ERI) changing a few months ago with Taprobane Holdings holds acquiring a 29% stake. ERI owns a 66.4% stake in PHAR and public holding is 33.6%

Illiquid shares of the company closed down Rs. 8.10 or 1.5% to Rs. 540.

For the nine months ended on 31 December 2012, the net profit was Rs. 12.45 million, up from Rs. 5 million loss a year earlier. However, FY13 improved bottom line is largely on account of other operating income of Rs. 37 million. In the third quarter the loss was Rs. 4.2 million, up from Rs. 2.7 million in the corresponding quarter of FY12.

Turnover for nine months was Rs. 64 million, down by 27% whilst in the third quarter it was down by 43% to Rs. 16 million.

Despite losses, retained earnings as at 31 December 2012 was Rs. 265 million, up from Rs. 163 million a year earlier and Rs. 252 million as at 31 March 2012. Revenue reserves amounted to Rs. 535 million. Total assets were Rs. 1.1 billion, up from Rs. 864 million in December 2011.

It has Rs. 20.3 million in long-term liabilities including Rs. 18 million in interest bearing borrowings and Rs. 183 million in current liabilities of which Rs. 96 million is trade and other payables and Rs. 36 million in interest bearing loans and borrowings.