Indies Pharma sheds debt while building new HQ
Pharmaceutical distributor Indies Pharma Jamaica Limited opted to draw on internal resources for the build-out of new operating space and has been shedding debt in the process.
The company nearly doubled its expenses in the July third quarter to $104 million due to the project.
Without those expenses, profit would have increased nearly 80 per cent for the quarter compared to the prior year, said Chairman and CEO Dr Guna Muppuri.
“The company has been spending out of its strong cash flows without borrowing any funds. We are preparing the company for no less than the next decade, investing in its operational and functional infrastructure,” said Muppuri.
“We are spending almost $50 million on such things as a new office, warehousing upgrades, and so on.”
The company mainly distributes and retails pharmaceutical and auxiliary products. Despite relying on cash flow to finance the build-out, its cash and equivalents still grew in the year, closing at $70.8 million from $44.4 million a year earlier.
Indies Pharma will be consolidating its warehouse and office operations at Ironshore in Montego Bay and will rent the office space it has at Catherine Hall in the city to third parties. The company expects to generate $16 million annually from rentals, which will go into future marketing budgets, the chairman said.
Indies Pharma is now debt free after paying off $52 million of long-term loans last year at the same time it was building the new premises at Ironshore.
Meanwhile, the company is forecasting “humble, nimble, and organic” for 2019.
Indies Pharma collected more revenue in the July quarter – $214.5 million compared to $148.2 million a year earlier – but profit slipped from $38 million, or 3 cents per share, to $33 million or 2 cents per share. Over nine months’ earnings per share improved from six cents to nine cents per share.
“The growth so far has been very organic purely by increasing our market share. This has been in line with our projections and strong statements made in the past,” said Muppuri. “The growth prospects for the upcoming fiscal year, starting November 1, 2019, will have inputs from the increasing basket size, addition of new line of products that are already on their way to Jamaica,” he said.