Green Cross Health Full Year Results to 31 March 2022
Green Cross Health Limited (NZX: GXH)
Full Year Result announcement for the audited twelve months ended 31 March 2022
GREEN CROSS HEALTH REPORTS FULL YEAR PROFIT OF $24.6M
27 May 2022, AUCKLAND, NZ: Listed primary healthcare provider Green Cross Health, the Group
behind Unichem and Life Pharmacy, The Doctors and Access Community Health, reported Net Profit
After Tax Attributable to Shareholders of $24 .6 million, which was ahead of the prior year by 47% and
included an increase in performance across all three divisions, as well as in-year acquisition activity.
Result Summary:
• Operating Revenue up 18% to $670.3m
• Operating Profit (EBIT) up 54% to $54 .1m
1
• Net Profit After Tax Attributable to Shareholders up 47% to $24 .6m
1
• Pharmacy Operating Revenue up 16% and Operating Profit up $11.7m to $35.9m
• Medical Operating Revenue up 35 % and Operating Profit up $6.6m to $16.0m
• Community Health Operating Revenue up 12% and Operating Profit up $1.9m to $5.6m
• Over $20m invested in growth including eight medical centre acquisitions, one medical centre
greenfield and five pharmacy acquisitions
• Internal promotions of Alison Van Wyk (COO), Androulla Kotrotsos (GM Community Health), plus
appointment of Wayne Woolrich (GM Medical)
• $21m Net Cash position – 3.5 cps dividend declared
Green Cross Health Group CEO Rachael Newfield, commented, “The Company played a lead role in
protecting our communities during the COVID-19 pandemic by adapting our business model across all
three divisions and scaling up to deliver essential services over a time of extreme uncertainty across
New Zealand. Our ability to deliver on our business strategy and invest in growth, coupled with our
willingness and ability to deliver additional services, has contributed to a solid FY22 financial
performance, resulting in a 47% lift in net profit to shareholders.
“Every member of the Green Cross Health team has played their part, and their efforts are widely
appreciated not just here at Green Cross Health, but by New Zealand communities nationwide.”
Green Cross Health Chair Kim Ellis, added, “The financial result for the year reflects the operational
efforts that have gone into the pandemic response, our acquisition strategy and delivery of organic
growth plans. Our financial performance and strong Balance Sheet support the continuation of our
acquisition strategy as well as the payment of dividends to shareholders.”
1
After deducting one-off costs of $1.4m associated with the process to acquire Tamaki Health, which Green Cross Health and its
consortium partner withdrew from in November 2021.
Unichem & Life Pharmacy Division
Pharmacy Revenue for the period saw an increase of 16% to $367m. Operating Profit for the period
was up 49% to $35.9m, driven by further growth in dispensary activity and earnings from COVID-19
vaccinations and other services. Throughout the year our network of 345 pharmacies played a key
role in supporting communities – providing essential services, supporting the COVID-19 vaccination
programme and continuing to innovate and bring new healthcare solutions. Green Cross Health
pharmacies represented 51% of all New Zealand pharmacies providing COVID-19 vaccinations.
Even with the return to three-monthly dispensing (rather than monthly dispensing Pharmac put in
place for much of the prior year given COVID-19 related challenges), script volumes increased 2%
year-on -year. The Green Cross Health pharmacy network dispensed over 30 million scripts during the
period, representing almost 40% of New Zealand’s volumes.
Retail sales were consistent year-on-year, with metro areas most challenged by further COVID-19
restrictions and businesses working from home. A differentiated product focus resulted in 20% of
retail sales now being sourced via strategic supplier partnerships. In line with the strategy of retail
innovation, new services were launched in the year including Ingeneous DNA testing and Phillips’
sleep apnoea, enhancing our ability to connect with our customers on health solutions.
Living Rewards loyalty membership grew by 81,000 to 1.89m members through targeted acquisition
campaigns and differentiated offers to loyalty customers, who spend 62 % more on average than non-
loyalty members. The Company has contracted the installation of a new loyalty system in FY23 , which
will allow for enhanced customer segmentation and relevant, personalised offers.
Tight control of labour and occupancy costs continued through the period with a number of leases
successfully renegotiated. The ongoing review and optimisation of the store portfolio is a strategic
priority. During the year the division acquired two pharmacies in Whakatane, two pharmacies in
Katikati and one in Onehunga. Investments included a 25% holding in PillDrop, ensuring Green Cross
Health stays close to the increased demand for digital services and the changing needs of customers.
The Pharmacy digital booking system has been enhanced to support ease of customer access to instore
services and online fulfilment capability has been scaled to support a 51 % increase in online demand.
The division announced a partnership with ASX listed MedAdvisor to roll out digital solutions to
customers across the pharmacy network to support an omni-channel experience. In FY22, 450 staff
completed year one of the specialised Green Cross Health retail apprenticeship programme, with year
two of the programme now underway.
The value of the pharmacy workforce was highly visible throughout the pandemic response. Green
Cross Health urges the Government to support the enhanced role community pharmacy has played
and to address workforce sustainability and cost pressure recovery. With the health reforms
underway, Green Cross Health calls on the Government to remove the medicines co-payment tax for
vulnerable and marginalised communities as it is a significant barrier to equity of access.
The Doctors Medical Division
The Medical division achieved year-on -year growth in revenue and profitability, through COVID-19
testing, vaccinations and other COVID-19 care opportunities, plus investing to drive growth both
organically and through acquisitions. Medical Operating Revenue grew 35% to $111.0m, with
Operating Profit up 71% to $16.0m.
Nationwide footprint increased by 8 to 53 medical centres through a high level of acquisition activity
and one greenfield development. Two centres were added in each of Auckland, Wellington,
Christchurch and Queenstown. The Doctors Greenlane was opened in April 2021 and is already
exceeding expectations. Enrolled patients for Medical as at 31 March 2022 totalled 329,000, an
increase of 44,000 (+15%) since 31 March 2021.
COVID-19 created additional clinical and administrative demands, which put further pressure on
practices and healthcare staff. Practices were required to respond to relentless change and added
demands, while continuing to run day-to -day operations and provide high-quality care to patients. As
community transmission spread, isolation requirements and positive cases also impacted Medical’s
workforce for extended periods.
The division offered phone, virtual and in-person consultations to ensure seamless patient care
throughout the pandemic. The introduction of COVID-19 vaccinations to general practice, the
transition from PCR swabbing to rapid antigen testing, and caring for COVID-19 positive patients
within their home was a huge focus for the clinical teams.
Operationally, COVID-19 had an adverse impact on both acute and routine care presentations. The
demand for swabbing activity was high and in some practices more than offset the decline in patient
presentation revenue. A new ‘Covid Care’ telehealth service was implemented by the centralised
virtual HouseCall team within a short space of time, relieving some of the pressure on the division’s
network.
The Medical strategy is to grow organically and through acquisitions. With increased scale, there
should be opportunities to strengthen relationships with funders and become more cost efficient
while maintaining high performing clinical teams. The Government’s health reforms are moving into
implementation which is an opportunity to work more closely with Health New Zealand, the Māori
Health Authority and locality partners to improve how care is delivered more equitability to
communities across New Zealand.
Access and Total Care Health Community Health Division
The Community Health team of over 3,000 front-line and support staff delivered care to vulnerable
communities during the various stages of the COVID-19 pandemic, ensuring clients were able to stay
safely in their own homes.
The year was impacted by significant workforce shortages due to illness or contact isolation
requirements, which led to a transitioning of care models to ensure clients with COVID-19 continued
to receive services. Despite the headwinds, the division delivered year-on -year revenue growth of
12% to $192.2m, and operating profit (EBIT) growth of 51% to $5.6m. Despite the improved financial
performance, operating profit margin remains low at 2.9%.
The strategy to increase share in higher clinical care needs segments has been successful, seeing a
13 % growth in this segment over the previous year. With a workforce constrained by COVID-19 vaccine
mandates and border closures, the division successfully leveraged digital tools to provide enhanced
telehealth services and improved rostering.
Investment in people and technology has provided operational efficiencies via automation and system
improvements. Rollout of the client portal continued with a 61% increase in users year-on-year.
Upskilling of team members has been driven via internal training programmes, including online
competency development and assessment. In year, there was positive staff engagement from the
newly introduced staff development programme Whakatipu Tāngata, which was nominated as a
finalist in the New Zealand HR awards.
A health equity focus has seen the division weave te reo Māori and tikanga Māori into operations and
strategy. This year saw the launch of Tā Tātou Rautaki (our strategy) that supports kaupapa and te
ara whakamua (pathway forward).
The Company expects the transition to Health New Zealand and the Māori Health Authority will allow
for a consistent approach nationally, with a localities-based approach to meet regional needs and
support equity of access. The COVID-19 pandemic response has again highlighted the value of the
Home and Community sector to the Government; a sector that needs to see improved funding to
counter escalating wage costs and to safeguard the sustainability of the valuable services provided.
Outlook and Dividend
Whist acknowledging there is still some COVID-19 uncertainty ahead, the Board is pleased with how
the Company has responded to the pandemic, noting the significant investment and tremendous
effort that has gone into the past year’s performance whilst performing a critical primary healthcare
role for the community.
Green Cross Health is committed to meeting patient and customer expectations, providing to all New
Zealanders accessible, quality primary healthcare. As part of this commitment, the Company is
seeking opportunities to work more closely with Health New Zealand, the Māori Health Authority and
locality partners to improve how care is delivered more equitability to communities.
The Board has declared a final FY22 dividend of 3.5 cents per share. The expectation is for FY23 to
return to pre COVID-19 profitability levels, adjusted for acquisitions.
[Ends]
Contact:
Ben Doshi
ben.doshi@gxh.co.nz
Rachael Newfield
rachael.newfield@gxh.co.nz
About Green Cross Health
Green Cross Health (NZX: GXH) is a trusted New Zealand primary healthcare provider with multi-
disciplinary healthcare teams with the purpose of working together to support healthier communities.
Green Cross Health is focused on creating sustainable healthcare solutions with positive outcomes
and experiences.
New Zealand owned and operated, Green Cross Health operates under branded groups Unichem and
Life Pharmacies, The Doctors medical centres, Total Care Health community nursing services and
Access Community Health to provide support, care and advice to diverse New Zealand communities.
Providing convenient access to professional healthcare with 345 Unichem and Life Pharmacies
covering almost every New Zealand community, Green Cross Health makes more than 3. 8m home
visits to more than 36 ,000 community health clients and cares for 329,000 enrolled patients at medical
centres.
---
GXH Annual Results Pres
entation
27 May 2022
Pg 2
Disclaimer
The information in this presentation was prepared by Green Cross
Health Limited (GXH) with due care and attention. However, the
information is supplied in summary form and is therefore not neces
sarily complete, and no represen
tation is made as to the accu
racy,
completeness or reliability of the information. In addition, ne
ither GXH nor any of its subsidiar
ies, directors, employees, sha
reholders nor
any other person shall have liability whatsoever to any person
for any loss (including, without limitation, arising from any fa
ult or
negligence) arising from this presentation or
any information supplied in connection with it.
This presentation may contain forward-looking statements and pr
ojections. These reflect GXH current expectations, based on what
it
thinks are reasonable assumptions. GXH give
s no warranty or representation as to its
future financial performance or any future
matter.
Except as required by law or NZX listing rules, GXH is not oblige
d to update this presentation after its release, even if thing
s change
materially. This presentation does not cons
titute financial advice. Further, this pres
entation is not and should not be constru
ed as an offer
to sell or a solicitation of an offer to buy GXH securities and
may not be relied upon in connection with any purchase of GXH se
curities.
This presentation contains a number of non-GAAP financial measur
es, including Operating Revenue and Operating Profit. As they a
re not
defined by GAAP or IFRS, GXH calculation of these measures may
differ from similarly titled measures presented by other compani
es and
they should not be considered in isolatio
n from, or construed as an alternative to,
other financial measures determined in acco
rdance
with GAAP. Although GXH believes they provide useful informatio
n in measuring the financial performance and condition of GXH bu
siness,
readers are cautioned not to place undue reliance on these non-GAAP financial measures.The information contained in this presentation should be consid
ered in conjunction with the consolidated financial statements fo
r the
period ended 31 March 2022.
GXH Annual Results Pres
entation
27 May 2022
Pg 3
Operational Highlights
GXH
Highlights
Group Revenue up 18%
Initial script volumes up 6%
Same store dispensary revenue up 7%
9 new medical centres
Community Health EBIT margin 2.9% (LY 2.2%)
Same medical centre revenue growth of 8%
$100m increase in Group Revenue year-on-year
47% increase in Net Earnings Attributable to Shareholders versus last year
Internal promotion of Alison Van Wyk to Chief Operating Officer, and Androulla Kotrotsos to GM Community Health division
Acquisition of five new pharmacies
Appointment of Wayne Woolrich to GM Medical
Acquisition of eight new medical practices, plus one greenfield
GXH Annual Results Pres
entation
27 May 2022
Pg 4
Successful diversification of EBIT contribution over time
340
336
317
367
71
77
82
111
157
156
171
192
567
569
570
670
-
100 200 300 400 500 600 700 800
FY19
FY20
FY21
FY22
Million
Revenue Composition ($m)
Pharmacy
Medical
Access
Group
27.3
25.2
24.1
35.9
4.4
6.6
9.3
16.0
0.1
1.2
3.7
5.6
29.4
31.0
35.1
54.1
-
10 20 30 40 50 60
FY19
FY20
FY21
FY22
Million
EBIT Composition ($m)
Pharmacy
Medical
Access
Group
GXH Annual Results Pres
entation
27 May 2022
Pg 5
GXH pharmacies
represented
51%
of all New
Zealand pharmacies vaccinating
Supporting Communities through COVID-19
•
All divisions provided essent
ial services to New Zealand
communities
–
Pharmacies remained open throughout all alert levels
–
Medical centres provided phone, virtual and in-person consultations
–
Community Health continued home visits and introduced telehealth offering
•
GXH supported the national COVID-19 response
–
scaled vaccination capacity in
short timeframes, vaccinating
onsite and offsite
–
safely extended pharmacy vaccinations to children
–
rapid antigen testing introduced in pharmacies
–
PCR swabbing and introduction
of rapid antigen testing in
medical centres
–
upgraded online pharmacy capabi
lity to fulfil increase in
demand
•
Prioritised the health and sa
fety of staff and customers
of eligible GXH medical
centres vaccinating
of eligible medical
centres swabbing
GXH Annual Results Pres
entation
27 May 2022
Pg 6
GXH Annual Result - Financial Overview
Group Revenue$670.3m
18% increase vs FY21
Medical Operating Profit$16.0m
71% increase vs FY21
Operating Profit/EBIT$54.1m
54% increase vs FY21
Net Profit After Tax$24.6m
47% increase vs FY21
(attributable to shareholders)
Pharmacy Operating Profit$35.9m
49% increase vs FY21
Community HealthOperating Profit$5.6m
51% increase vs FY21
Pharmacy Division
New Zealand’s largest network of health
retailers: supporting easy access to quality
health care
GXH Annual Results Pres
entation
27 May 2022
Pg 8
Pharmacy Performance
•
Revenue up
16% to $367.1m
•
Operating Profit
up 49% to $35.9m
•
The rise in
Pharmacy Revenue and Operating
Profit
was primarily due to further growth in
dispensary activity and revenue from COVID-19 vaccinations
•
Five new stores
acquired during the year, two
in Whakatane, two in Katikati and one in Onehunga
•
Total script numbers
up 2% (this year returned
to 3-monthly dispensing)
27.3
25.2
24.1
35.9
2019
2020
2021
2022
Pharmacy Operating Profit ($m)
340.2
336.4
316.8
367.1
2019
2020
2021
2022
Pharmacy Operating Revenue ($m)
GXH Annual Results Pres
entation
27 May 2022
Pg 9
Living Rewards Progress
Successful new member acquisition campaigns added 81,028 new members, despite COVID-19 conditions
Elevated instore messaging
Increased communications and offers to Living Rewards members
Contract signed to replace loyalty platform in FY23, to increase segmentation and personalisation capability
Living Rewards members spend more than non-members
1.41.51.61.71.81.92.0
F19
F20
F21
F22
Continued Growth in Living Rewards Members
Living Rewards Members Spend More
62%
more thannon‐members
48%
more thannon‐members
1,886,078 Living
Rewards members
GXH Annual Results Pres
entation
27 May 2022
Pg 10
Grown Ecommerce and Differentiated Retail Offer
Differentiation of retail product offering through strategic supplier partnerships, now accounts for 20% of retail sales
Elevated Pharmacy Health over-the-counter medication offering
Increased basket size by 3.2%, supported by introduction of new GXH Essentials range to lift margins along with basket size
Focused on high-quality, premium vitamins with 288% increase in this growing sub-category
Developed international sourcing capability
Invested in additional digital functionality to lift online customer engagement, with over 13 million page views, and conversion rate increasing 35% year-on-year
Over 200,000 customer bookings f
or in-store services using
our newly created c
entralised booking tool
Scaled fulfilment capability to support a 51% increase in online product demand
Investment in PillDrop (25% shareholding)
Partnership with ASX-listed MedAdvisor; phased plan to roll out digital solutions across the pharmacy network
0%5%
10%15%20%25%
FY19
FY20
FY21
FY22
% of retail sales
Growth in Differentiated Brands
0%1%2%3%4%5%6%7%
$50 $55 $60 $65 $70 $75 $80 $85
F19F20F21F22
% of retail sales
Average order value
Ecommerce has Successfully Scaled
Average order value
% sales
GXH Annual Results Pres
entation
27 May 2022
Pg 11
Leveraging our National Scale
New Zealand’s largest network of health retailers with 345 stores nationwide
Dispensed over 30 million scripts, representing almost 40% of all New Zealand volumes
Advocated for additional support for pharmacies during the pandemic
On the back of COVID-19 pediatric vaccinations, pharmacy successfully lobbied to administer children’s flu vaccinations in the year ahead
450 pharmacy employees completed year one of specialised GXH retail apprenticeship programme
58
287
Pharmacy Count by
Brand
Life
Unichem
91
254
Pharmacy Count By
Ownership
Equity
Licensee
-
5
10 15 20 25 30 35
F19
F20
F21
F22
Script count (millions)
Over 30 Million Scripts Dispensed Per Year
Stores nationwide
GXH Annual Results Pres
entation
27 May 2022
Pg 12
Brand & customer
Pharmacy Will Win By Focusing on the Customer
Retail disciplines
Omni-channel
experience
Network scale &
leadership
Cost focus
Differentiated brand and products, recognising
customer loyalty
Professional instore experience, margin management
Care & advice accessible to the customer in multiple
channels
Leveraging our trusted brands, advocating for equity
for all New Zealanders
Workforce productivity & occupancy cost control
Pharmacy Strategy
Medical Division
Growth, leadership and sustainable
models of care
GXH Annual Results Pres
entation
27 May 2022
Pg 14
Medical Performance
Revenue
up 35% to $111.0m, driven by
COVID-19 testing, vaccinations, other COVID-19 care opportunities and acquisitions Operating Profit
at $16.0m, driven by
COVID-19 services, procurement benefits, cost management and acquisitions 329,000 enrolled patients
as at 31
March 2022, an increase of 44,000 (+15%) since 31 March 2021Ownership
in 53 medical centres
4.4
6.6
9.3
16.0
2019
2020
2021
2022
Medical Operating Profit ($m)
70.5
76.5
82.2
111.0
2019
2020
2021
2022
Medical Operating Revenue ($m)
GXH Annual Results Pres
entation
27 May 2022
Pg 15
Track Record of Operational Improvement
Continued efficiency gains through operational improvement and leveraging scale
– Employee costs reduced to 70% of revenue– Other costs reduced to 18% of revenue
Improved utilisation through system and process improvements
Procurement gains in IT and recruitment
Recruited Virtual Lead to support ‘Covid in the Community’ initiatives and further evolve the HouseCall offering
Recruited Clinical Director to enhance clinical offer to patients and funders
Strengthened alignment with selected funders, to support future efficiencies and equity of outcomes
*F19 is pre adoption of IFRS16
0%2%4%6%8%10%12%14%16%
0%
10%20%30%40%50%60%70%80%
F19*
F20
F21
F22
EBIT margin %
% of revenue
Increased Efficiency Through Operational Efficiencies and Systematic Triaging
Employee costs %
Other costs %
EBIT margin %
GXH Annual Results Pres
entation
27 May 2022
Pg 16
Successfully Accelerated Acquisitions
* includes greenfield sites,
excludes shareholding changes
Following investing and developing internal capability, completed a record 8 acquisitions in year
One greenfield centre (The Doctors Greenlane)
Successfully integrated acquisitions, to close with 53 medical centres
Strong pipeline of future acquisitions
Completed 12 centre rebrands, continuing to build The Doctors brand presence
The Doctors now has New Zealand’s largest general practice enrolled patient base
0
50
100150200250300350
F19
F20
F21
F22
Enrolled patients (000s)
Enrolled Patients
329,000 enrolled patients
4
1
3
9
FY19
FY20
FY21
FY22
Medical Acquisitions*
GXH Annual Results Pres
entation
27 May 2022
Pg 17
Patient & brand
Medical Focused on Organic Growth and Acquisitions
Scale
Te c h n o l o g y
Operational
improvement
Cost and margin
focus
High quality patient care
Targeted centre acquisitions
Utilising data and systems, omni-channel offering
Continuous improvement focus, clinical development
Workforce productivity & margin management
Medical Strategy
Community Health
Division
Delivering sustainable services to maintain
and support clients’ independence within their
own home
GXH Annual Results Pres
entation
27 May 2022
Pg 19
Community Health Performance
Revenue
up 12% to $192.2m
Operating Profit
increased $1.9m to $5.6m
Improved performance
reflects strategy
of supporting clients with higher clinical needs and improving profitability of contractsCost efficiencies
have resulted from
investment in people, technology and systemsContinued advocacy
for additional funding
to support sector sustainability
156.5
155.6
171.4
192.2
2019
2020
2021
2022
Community Health Operating Revenue ($m)
0.1
1.2
3.7
5.6
2019
2020
2021
2022
Community Health Operating Profit ($m)
GXH Annual Results Pres
entation
27 May 2022
Pg 20
Improved Margin Levers Driving EBIT Growth
Investment in systems and data now providing necessary information for decision making, creating a platform for profitable growth
Process development and resourcing to support service delivery
Revenue increased from $171m to $192m
Higher clinical needs now 20% of revenue
Given tight margins, management of labour cost critical to profitability
Data and reporting disciplines now well-established
Employee cost reduced to 93% of revenue
0.1
1.2
3.7
5.6
95.4%
93.8%
92.9%
92.7%
91%92%93%94%95%96%
-
1.0 2.0 3.0 4.0 5.0 6.0
2019
2020
2021
2022
EBIT $m
Labour Efficiency Initiatives Delivering EBIT Growth
EBIT $
Employee costs %
0%1%2%3%4%
-
50
100 150 200 250
F19F20F21F22
Revenue $m
Driving Growth in Higher Clinical Needs Segment to Lift Margin
Higher clinical needs revenue
Other revenue
EBIT margin %
EBIT margin %
% of revenue
GXH Annual Results Pres
entation
27 May 2022
Pg 21
in use by
2,060
support
workers
Utilisation of Technology Improving Efficiencies
0
100200300400500600700800900
F20
F21
F22
Daily Client Log ins to MyAccess
MyAccess (Client portal)
– Rollout of our internally developed client
portal continued, improving client visibility of upcoming appointments and staffing
– Provides clients quick access to
information, reducing coordination costs
– 61% increase in users year-on-year
AVA (Access Virtual Assistant)
– Continued to enhance our internally
developed, award winning, support worker rostering and time & attendance app
– 80% of support workers now utilising the
app
GXH Annual Results Pres
entation
27 May 2022
Pg 22
Client
Community Health Targeting Profitable Growth
Te c h n o l o g y
Sector
representation
Cost and margin
Higher clinical needs & excellent client experience
Digital and systems development
Advocating for sustainable funding and equity for all
clients
Workforce productivity & contract margin management
Community Health Strategy
GXH Annual Results Pres
entation
27 May 2022
Pg 23
Group Financial Result
12 months ending 31 March 2022
GXH Annual Results Pres
entation
27 May 2022
Pg 24
Group Revenue and Operating Profit
•
Revenue of $670.3m, up 18%
•
FY22 revenue supported by COVID-19 activity
567.2
568.5
570.4
670.3
2019
2020
2021
2022
GXH Operating Revenue ($m)
29.4
31.0
35.1
54.1
2019
2020
2021
2022
GXH Operating Profit ($m)
•
Operating Profit of $54.1m, up 54%
•
In FY22, all divisions increased Operating Profit by 49% or more
GXH Annual Results Pres
entation
27 May 2022
Pg 25
Margin Expansion in Medical and Community Health, Improved Margins for all Divisions in FY22
EBITDA margin–
All divisions have improved their EBITDA margin in FY22 versus FY21
–
Medical and Community Health divisions have improved their margin each year since FY19
ROCE–
Return on capital employed of 19.9% represents strong capital efficiency
–
Return on capital employed has improved 8.3ppts over the last two years
*FY19 is pre adoption of IFRS16
16.5%
11.6%
14.4%
19.9%
FY19*
FY20
FY21
FY22
ROCE Improvement Over Last Two years
9.8%
14.1%
13.0%
14.8%
7.9%
14.2%
16.3%
19.4%
0.8%
2.4%
3.7%
3.9%
6.7%
10.5%
10.3%
11.9%
0.0%5.0%
10.0%15.0%20.0%
FY19*
FY20
FY21
FY22
EBITDA margin
Pharmacy
Medical
Access
Group
GXH Annual Results Pres
entation
27 May 2022
Pg 26
Group NPAT, EPS & Dividend
11.3
9.4
11.7
17.2
2019
2020
2021
2022
GXH Net Profit After Tax A
ttributable to Shareholders
(cps)
16.1
13.5
16.8
24.6
2019
2020
2021
2022
GXH Net Profit After Tax A
ttributable to Shareholders
($m)
•
EPS at 17.2 cps, an increase
of 47% on the prior year
•
Final FY22 dividend of 3.5cps declared – payment date of 23 June 2022 (interim dividend was 3cps)
7.0
3.5
0.0
6.5
2019
2020
2021
2022
Dividends Per Share
Based on dividends declared during the year
GXH Annual Results Pres
entation
27 May 2022
Pg 27
Strong Working Capital Management and Operating Cash Flow, Allowing for Acceleration of Acquisition Activity
26.8%
29.5%
14.0%
12.1%
2019
2020
2021
2022
Gearing Ratio (debt / debt + equity)
•
Gearing ratio of 12% in FY22
•
Undrawn debt facilities of $44m as at 31 March 2022
•
Net cash position of $21.1m as at 31 March 2022
•
Improved working capital ma
nagement has positioned
GXH well to take advantag
e of future investment
opportunities
•
Financing ratios:
– Debt / pre IFRS16 EBITDA – 0.4x – Operating Profit / Interest – 77.3x
31.4
34.8
51.2
44.3
54.3
65.8
2019
2020
2021
2022
GXH Operating Cash Flow ($m)
IFRS 16 adjustment
•
Operating Cash Flow of $44.3m (excl. IFRS 16)
Enabling investment ($24.9m) in:•
Five pharmacy acquisitions
•
Eight medical centre acquisitions
•
One medical greenfield development
•
Ongoing site capex requirements
•
PillDrop, and other digital capability
70.9
GXH Annual Results Pres
entation
27 May 2022
Pg 28
Outlook
GXH experienced a very strong FY22, buoyed by COVID-19 related activity
Expectation for FY23 is a return to pre COVID-19 profitability levels, adjusted for acquisitions
Strong balance sheet allows for dividend pay-outs and an accelerated level of acquisition activity
GXH Annual Results Presentati
on
25 June 2020
Pg
29
GXH Annual Results Pres
entation
27 May 2022
Pg 29
About Green Cross Health
GXH Annual Results Pres
entation
27 May 2022
Pg 30
Our Purpose
Working together to
support healthier
communities.
We are passionately
committed to the health
and wellness of New
Zealand, and to providing
the best support, care and
advice to our communities.
This is our promise.
GXH Annual Results Pres
entation
27 May 2022
Pg 31
Who We Are
Pharmacies providing extensive range of
health, wellness and beauty related products
and services across co
mmunities throughout
New Zealand, supported by digital offerings
General practice networks across New
Zealand, offering in-practice and virtual
services
Personal care, nursing, rehabilitation and
household assistance delivered within homes
across New Zealand
As at 31 March 2022
---
Green Cross Health Limited
Group consolidated financial
statements
for the year ended 31 March 2022
Contents
Page
Directors declaration2
Independent auditor's report3
Financial statements
Consolidated statement of comprehensive income7
Consolidated statement of changes in equity8
Consolidated statement of financial position9
Consolidated statement of cash flows10
Notes to the financial statements11
-1-
Green Cross Health Limited
Directors' declaration
31 March 2022
In the opinion of the Directors of Green Cross Health Limited, the financial statements and notes, on pages 7 to 32:
Comply with New Zealand generally accepted accounting practice and give a true and fair view of the financial
position of the Green Cross Health Limited Group as at 31 March 2022 and the results of its operations and
cash flows for the year ended on that date.
Have been prepared using appropriate accounting policies, which have consistently applied and supported by
reasonable judgements and estimates.
The Directors believe that proper accounting records have been kept which enable, with reasonable accuracy, the
determination of the financial position of the Group and facilitate compliance of the financial statements with the Financial
Reporting Act 2013.
The Directors consider that they have taken adequate steps to safeguard the assets of the Group, and to prevent and
detect fraud and other irregularities. Internal control procedures are also considered to be sufficient to provide reasonable
assurance as to the integrity and reliability of the financial statements.
The Directors are pleased to present the financial statements of Green Cross Health Limited for the year ended 31 March
2022.
For and on behalf of the Board of Directors:
Kim EllisCarolyn Steele
ChairDirector
26 May 202226 May 2022
-2-
© 2022 KPMG, a New Zealand Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee. All rights reserved.
Independent Auditor’s Report
To the shareholders of Green Cross Health Limited
Report on the audit of the consolidated financial statements
Opinion
In our opinion, the consolidated financial
statements of Green Cross Health Limited
(the ’company’) and its subsidiaries (the 'group') o n
pages to 7 to 32:
i.present fairly in all material respects the Group’s
financial position as at 31 March 2022 and its
financial performance and cash flows for the
year ended on that date in accordance with New
Zealand Equivalents to International Financial
Reporting Standards and International Financial
Reporting Standards.
We have audited the accompanying consolidated
financial statements which comprise:
— the consolidated statement of financial position
as at 31 March 2022;
— the consolidated statements of comprehensive
income, changes in equity and cash flows for
the year then ended; and
— notes, including a summary of significant
accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ ISAs (NZ)’) . We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the
group in accordance with Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (Including International Independence Standards) (New Zealand) issued by the
New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ In ternational Cod e of Ethics for Professional Accountants (including International Independence
Standards) (‘IESBA Code’), and we have fulfilled our other ethical responsibilities in accordance with these
re quirements and the IESBA Code.
Our r esponsibilities under ISAs (NZ) are further described in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
O
ur firm has also provided other services to the group in relation to tax compliance and support services and
c
ybersecurity testing. Subject to certain restrictions, partners an d employees of our f irm may also deal with the
g
roup on normal terms within the ordinary course of trading activities of the business of the group. These
matters have not impaired our independence as auditor of the group. The firm has no other relationship with, or
interest in, the group.
Materiality
The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and on the consolidated financial statements as a whole. The materiality for the consolidated financial
statements as a whole was set at $1.65m determined with reference to a benchmark of group Profit Before Tax.
We chose the benchmark because, in our view, this is a key measure of the group’s performance.
4
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements in the current period. We summarise below those matters and our key
audit procedures to address those matters in order that the shareholders as a body may better understand the
process by which we arrived at our audit opinion. Our procedures were undertaken in the context of and solely
for the purpose of our statutory audit opinion on the consolidated financial statements as a whole and we do not
express discrete opinions on separate elements of the consolidated financial statements.
The key audit matter How the matter was addressed in our audit
Impairment of goodwill ($156.8 million)
Refer to note 13 of the consolidated
financial statements.
The Group has grown significantly through
acquisitions in its Pharmacy, Medical and
Community Health business units which
has resulted in the recognition of goodwill
in the amount of $85.8 million, $52.0
million and $19.0 million, respectively.
In the event the business units under-
perform compared to their business
cases, there is a risk that the goodwill
arising on acquisition may no longer be
supported.
As disclosed in note 13, the Group
performs an annual impairment test of
goodwill and uses a discounted cash flow
model to determine the recoverable
amount of its business units to which
goodwill has been allocated.
In performing this assessment,
assumptions are made in respect of future
economic and market conditions,
including the impact of COVID-19.
Cashflow forecasts include consideration
of the Group’s strategic business plan for
each business unit and their impact on
forecast sales and operating costs.
Additionally, management determined
terminal growth rates and discount rates
which reflect an assessment of the time
value of money and the risks specific to
each business unit.
The annual impairment test performed by
the Group was significant to our audit due
to the magnitude of the goodwill balance
and because the assessment process
involved judgment about the future
performance of the business units.
Our audit procedures included:
— Ensuring the allocation of goodwill to the Group’s business units is
appropriate;
— Evaluating the methodology, mathematical accuracy and
assumptions applied in the discounted cash flow models. We
used our own valuation specialists to assist us with the
consideration of terminal growth and discount rates;
— Challenging management’s cash flow assumptions over projected
cash flows taking into consideration COVID-19, and the expected
impact of the Group’s business plans for each business unit by
reference to their historical performance and the internal and
external factors that influence their operations;
— Performing sensitivity analysis around the key assumptions used
in the models; and
— Reviewing the appropriateness of related disclosures in the
consolidated financial statements.
We did not identify any factors that were materially inconsistent with
management’s overall conclusions.
5
Other information
The Directors, on behalf of the group, are responsible for the other information included in the group’s Annual
Report. Other information includes the Directors Declaration and the other information included in the Annual
Report. Our opinion on the consolidated financial statements does not cover any other information and we do
not express any form of assurance conclusion thereon.
The Annual Report is expected to be made available to us after the date of this Independent Auditor's Report. Our
responsibility is to read the Annual Report when it becomes available and consider whether the other information
it contains is materially inconsistent with the consolidated financial statements, or our knowledge obtained in the
audit, or otherwise appear misstated. I f so, we are required to report such matters to the Directors.
Use of this independent auditor’s r eport
This independent auditor’s report is made solely to the shareholders as a body. Our audit work has been
undertaken so that we might state to the shareholders those matters we are required to state to them in the
independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the shareholders as a body for our audit work, this independent
auditor’s report, or any of the opinions we have formed.
Responsibilities of the Directors for the consolidated financial
statements
The Directors, on behalf of the company, are responsible for:
— the preparation and fair presentation of the consolidated financial statements in accordance with generally
accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial
Reporting Standards) and International Financial Reporting Standards;
— implementing necessary internal control to enable the preparation of a consolidated set of financial
statements that is fairly presented and free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate or to
cease operations or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial
statements
Our objective is:
— to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error; and
— to issue an independent auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs NZ will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
consolidated financial statements.
6
A further description of our responsibilities for the audit of these consolidated financial statements is located at
the External Reporting Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our independent auditor’s report.
The engagement partner on the audit resulting in this independent auditor's report is Jodi Newth.
For and on behalf of
KPMG
Auckland
26 May 2022
Green Cross Health Limited
Consolidated statement of comprehensive income
For the year ended 31 March 2022
20222021
Notes$'000$'000
Operating Revenue4670,327
570,402
Operating expenditure6.2(592,337)(513,065)
Depreciation and amortisation expense11,13(7,461)(8,060)
Depreciation - leases12(17,433)(15,338)
Impairment11,13(841)(242)
Share of equity accounted net earnings151,893
1,405
Operating profit before interest and tax54,14835,102
Interest income7884
Interest expense(701)(1,094)
Interest expense - leases(5,480)
(5,166)
Net interest expense(6,103)(6,176)
Profit before tax48,04528,926
Income tax expense7(14,292)
(7,890)
Profit after tax for the year33,75321,036
Other comprehensive income for the year, net of tax-
-
Total comprehensive income for the year
33,75321,036
Attributable to:
Shareholders of the parent24,56116,752
Non-controlling interest9,192
4,284
33,75321,036
Earnings per share:
Basic earnings per share (cents)817.1611.70
Diluted earnings per share (cents)817.1011.69
The accompanying Statement of Accounting Policies and Notes to the Consolidated Financial Statements on pages 11 to
32 form part of the Financial Statements.
-7-
Green Cross Health Limited
Consolidated statement of changes in equit
y
For the year ended 31 March 2022
Share
Capital
Retained
earnings
Non-
controlling
interest
Total equit
y
Notes$'000$'000$'000$'000
Balance as at 1 April 202090,61033,80210,307134,719
Profit or loss for the year-
16,7524,28421,036
Total comprehensive income for the year
-16,7524,28421,036
Distributions to non-controlling interests--(7,309)(7,309)
Impacts of other transactions with non-controlling interest-311,1701,201
Dividends to shareholders9-
---
Balance as at 31 March 202190,61050,5858,452149,647
Balance as at 1 April 202190,61050,5858,452149,647
Profit or loss for the year-
24,5619,19233,753
Total comprehensive income for the year
-24,5619,19233,753
Distributions to non-controlling interests--(3,013)(3,013)
Impacts of other transactions with non-controlling interest-(1,971)(146)(2,117)
Dividends to shareholders9-
(4,314)-(4,314)
Balance as at 31 March 202290,61068,86114,485173,956
The accompanying Statement of Accounting Policies and Notes to the Consolidated Financial Statements on pages 11 to
32 form part of the Financial Statements.
-8-
Green Cross Health Limited
Consolidated statement of financial position
As at 31 March 2022
20222021
Notes$'000$'000
ASSETS
Current assets
Cash and cash equivalents45,15437,302
Trade and other receivables1047,31038,933
Inventories32,16530,388
Income taxes refundable10-
1,831
Total current assets124,629108,454
Non-current assets
Other receivables102,127-
Property, plant and equipment1119,72919,517
Right-of-use assets1284,04576,355
Intangible assets13159,806140,815
Deferred tax asset1413,71912,018
Investments accounted for using the equity method154,720
7,724
Total non-current assets284,146256,429
Total assets408,775364,883
LIABILITIES
Current liabilities
Trade payables and accruals16113,302106,177
Income taxes payable164,076-
Borrowings171,9082,035
Lease liabilities1214,291
13,570
Total current liabilities133,577121,782
Non-current liabilities
Borrowings1722,12622,338
Lease liabilities1279,116
71,116
Total non-current liabilities101,24293,454
Total liabilities234,819215,236
Net assets
173,956
149,647
EQUITY
Share capital90,61090,610
Retained earnings68,861
50,585
Total equity attributable to shareholders of the parent159,471141,195
Non-controlling interest14,485
8,452
Total equity173,956149,647
The accompanying Statement of Accounting Policies and Notes to the Consolidated Financial Statements on pages 11 to
32 form part of the Financial Statements.
-9-
Green Cross Health Limited
Consolidated statement of cash flows
For the year ended 31 March 2022
20222021
Notes$'000$'000
Cash flows from operating activities
Dividends received151,983797
Receipts from customers661,950574,576
Interest received7884
Payments to suppliers and employees(588,090)(497,800)
Income taxes paid(10,086)
(6,720)
Net cash inflow from operating activities1865,83570,937
Cash flows from investing activities
Purchases of property, plant and equipment and software intangibles(4,090)(4,971)
Acquisition of interests in equity accounted investments15(725)(128)
Acquisition of interests in subsidiary and non-controlling interests5(17,947)(7,980)
Investments and loans(2,122)
-
Net cash outflow from investing activities(24,884)(13,079)
Cash flows from financing activities
Proceeds from borrowings5,3142,712
Repayments of borrowings(5,967)(34,812)
Payment of lease liabilities(16,108)(14,498)
Interest expense(701)(1,094)
Interest expense - leases(5,480)(5,166)
Distributions to non-controlling interest(2,035)(1,475)
Dividend paid9(4,314)
-
Net cash outflow from financing activities(29,291)(54,333)
Net increase in cash and cash equivalents11,6603,525
Cash and cash equivalents at the beginning of the financial year37,30233,899
Cash acquired: business combinations5(3,808)
(122)
Cash and cash equivalents at end of year
45,15437,302
Reconciliation of closing cash and cash equivalents to the consolidated
statement of financial position:
Cash and cash equivalents
45,154
37,302
Closing cash and cash equivalents
45,154
37,302
The accompanying Statement of Accounting Policies and Notes to the Consolidated Financial Statements on pages 11 to
32 form part of the Financial Statements.
-10-
Notes to the consolidated financial statements
For the year ended 31 March 2022
1Reporting Entity
Green Cross Health Limited (the “Parent” or the "Company") is a New Zealand company registered under the Companies
Act 1993 and is an FMC entity for the purposes of the Financial Reporting Act 2013 and the Financial Markets Conduct Act
2013. The Financial Statements have been prepared in accordance with these Acts. The Company is listed on the NZX
Main Board ("NZX").
The consolidated financial statements of Green Cross Health Limited comprise the Parent, its subsidiaries, and its interest
in associates and joint ventures (together referred to as the “Group”).
2 Basis of preparation of financial statements
(a) Statement of compliance
The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice
(“NZ GAAP”). They comply with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”), and
other applicable Financial Reporting Standards, and authoritative notices as appropriate for a Tier one for profit entity.
They also comply with International Financial Reporting Standards.
The financial statements were approved by the Board of Directors on 26 May 2022.
(b) Basis of measurement
The financial statements of the Group are prepared under the historical cost basis unless otherwise noted within the
specific accounting policies below.
(c) Changes in accounting policy
The Group has consistently applied the following accounting policies to all periods presented in these consolidated
financial statements, except as mentioned below.
The IFRS Interpretations Committee released a decision in April 2021 which clarified how implementation costs incurred
in cloud computing arrangements should be treated and whether they should be expensed as incurred, or capitalised.
The impact of the decision, and subsequent framework has been assessed and adopted by the Group and it is not
material to this set of consolidated financial statements.
(d) Comparatives
Where appropriate, comparative information has been reclassified to conform to the current period's presentation.
(e) Functional and presentation currency
These financial statements are presented in New Zealand dollars ($), which is the functional currency of the entities of the
Group. All financial information presented in New Zealand dollars has been rounded to the nearest thousand.
(f)Significant estimates and judgments
The preparation of financial statements in conformity with NZ IFRS requires the Directors to make judgments, estimates
and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values
of some assets and liabilities. Actual results may differ from these estimates.
In authorising the financial statements for the year ended 31 March 2022, the Directors have ensured that the specific
accounting policies necessary for the proper understanding of the financial statements have been disclosed, and that all
accounting policies adopted are appropriate for the Group’s circumstances and have been consistently applied throughout
the year for all Group entities for the purposes of preparing the consolidated financial statements.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision
and future periods if the revision affects both current and future periods. Information about the significant areas o
f
judgment exercised or estimation in applying accounting policies that have had a significant impact on the amounts
recognised in the financial statements are described as follows:
-11-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
2 Basis of preparation of financial statements (continued)
(f)Significant estimates and judgments (continued)
(i) Classification of investments
Classifying investments as either subsidiaries, associates or joint ventures requires the Directors to assess the degree o
f
influence which the Group holds over the invested. In arriving at a conclusion the Directors take into account the
constitutional structure of the invested, governance arrangements, current and future representation on the Board o
f
Directors, and all other arrangements which might allow influence over the operating and financial policies of the invested.
(ii) Impairment of goodwill and indefinite life intangible assets
The carrying values of goodwill and intangible assets with an indefinite useful life, are assessed at least annually to ensure
that they are not impaired. This assessment requires the Directors to estimate future cash flows to be generated by cash
generating units to which goodwill and intangible assets with indefinite useful lives have been allocated. Estimating future
cash flows entails making judgments including the expected rate of growth of revenues and expenses, margins and market
shares to be achieved, and the appropriate rate to apply when discounting future cash flows. Note 13 of these financial
statements provides more information on the assumptions the Directors have made in this area and the carrying values o
f
goodwill and indefinite life intangible assets. As the outcomes in the next financial period may be different to the
assumptions made, it is impracticable to predict the impact that could result in a material adjustment to the carrying
amount.
(iii) Accounting for leases under NZ IFRS 16
In determining the right of use assets and lease liabilities a number of estimates and judgments have been made by
management. These include determining the applicable incremental borrowing rates and assessment of the lease terms,
including any rights of renewal and whether it is reasonably certain they will be exercised. See Note 12.
(iv) COVID-19 pandemic
On 17 August 2021, the New Zealand Government raised its Alert Level to 4 (full lockdown of non-essential services). A
number of the Group’s pharmacies, medical centres and its homecare operations continued to operate in a reduced
capacity during level 4 due to the essential nature of their activities and the service they provide to the community.
The Board note the high level of business uncertainty that continues to exist in relation to the impacts of the COVID-19
pandemic including the possibility of business disruption and erosion of consumer spending. There are no provisions in
these statements for the financial impacts of COVID-19.
(g) Subsidiaries
Subsidiaries are entities that are controlled by the Group. Control exists when the Group is exposed to, or has rights to,
variable returns from its involvement in the investee and has the ability to affect those returns through its power over the
investee. Power arises when the Group has existing rights to direct the relevant activities of the investee, i.e. those that
significantly affect the investee’s returns. Control is assessed on a continuous basis.
The Group consolidates the results of its subsidiaries from the date that control commences until the date on which control
ceases. At such point as control ceases, it derecognises the assets, liabilities and any related non-controlling interests and
other components of equity. Any interest retained in the former subsidiary is measured at fair value when control is lost.
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate
or a joint venture. At the date the equity method is discontinued, the difference between the carrying amount of the
associate or a joint venture and the fair value of any retained interest and any proceeds from disposing of a part interest in
the associate or a joint venture is included in the determination of the gain or loss on disposal of the associate or joint
venture.
The Group's ownership interests in subsidiaries ranges from 25% to 100% (2021: 25% to 100%). The Group consolidates
32 out of 42 entities where it holds less than half of the voting rights. This is on the basis that the Group's contractual
arrangements with these entities result in them meeting the definition of being subsidiaries as set out above.
-12-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
2 Basis of preparation of financial statements (continued)
(h) Non-controlling interests
Non-controlling interests are present ownership interests and are initially measured at either fair value or the non-
controlling interests’ proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is
determined on a transaction-by-transaction basis. Under the proportionate interest method, goodwill is not attributed to the
non-controlling interest and the Group recognises only its share of goodwill whereas under fair value, the non-controlling
interest includes its proportionate share of goodwill.
Changes in the Group’s interest in a subsidiary that do not result in a change in the control conclusion are accounted for
as transactions with equity-holders in their capacity as equity holders.
While the group has 50 (2021: 45) subsidiaries with non-controlling interests, there are no subsidiaries with individually
material non-controlling interest.
(i)Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted
investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(j)Goods and Services Tax (GST)
The statement of comprehensive income has been stated so that all components are exclusive of GST. All items in the
statement of financial position are stated net of GST with the exception of receivables and payables, which include GST
invoiced.
(k) Statement of cash flows
The statement of cash flows has been prepared using the direct method subject to the netting of certain cash flows.
Cash flows in respect of investments and borrowings that have been rolled-over under arranged banking facilities have
been netted in order to provide meaningful disclosures.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and
form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the
purpose of the statement of cash flows.
Operating activities include all cash received from all revenue sources and all cash disbursed for all expenditure sources
including taxation refunds or payments and other transactions that are not classified as investing or financing activities.
Investing activities reflect the acquisition and disposal of property, plant and equipment and intangibles, loans to
associates, and investments in associates, subsidiaries and joint ventures.
Financing activities reflect changes in borrowings and equity.
(l)Inventory
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on a weighted
average principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other
costs incurred in bringing them to their existing location and condition.
(m) Government grants
Grants that compensate the Group for expenses incurred are recognised in profit and loss as other income on a
systematic basis in the periods in which the expenses are recognised.
-13-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
3 New standards and interpretations issued and not yet effective
A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31
March 2022. These have been assessed for applicability to the Group and the Directors have concluded that they will not
have a significant impact on future financial statements, except for amendment to NZ IAS 1 Classification of Liabilities
which was early adopted by the Group in the financial year ended 31 March 2020.
4 Segment reporting
The Group has three reportable segments: pharmacy services, medical services and community health. The pharmacy
services segment provides retail and dispensary services, the medical services segment provides GP, nursing and urgent
care services and the community health segment provides in home and community care.
The Group’s main operations are in the pharmacy industry providing pharmacy services through consolidated stores,
equity accounted investments and franchise stores. The medical services segment includes fully owned and equity
accounted medical centres, and support services provided to these medical centres, as well as medical centres outside
the Group. The community health segment provides services direct to the community to support independent living.
The Board monitors the various revenue streams within each reportable segment separately however, they do not meet
the criteria for separate disclosure due to the following:
Aggregation of the operating segments within each reportable segment is consistent with the core principle of NZ
IFRS 8, i.e. aggregating will not distort the interpretation of the financial statements for the users;
The operating segments within each reportable segment share the same economic characteristics; and
The nature of the products and services, and the nature of the regulatory environment are the same for the
operating segments.
-14-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
4 Segment reporting (continued)
Operating segments
Information about reportable segments
Pharmac
y
Services
Medical
Services
Communit
y
HealthCorporateTotal
Notes $'000$'000$'000$'000$'000
March 2022
External revenues6.1364,477110,551191,600-666,628
Other income*
2,636
421642-3,699
Total Revenue
367,113
110,972192,242-670,327
Cost of products sold(209,995)(169)--(210,164)
Employee benefit expense(72,641)(77,156)(178,223)-(328,020)
Lease expenses(77)(313)(174)-(564)
Other expenses**(30,422)(13,562)(6,324)(3,281)(53,589)
Depreciation and amortisation(5,599)(1,471)(391)-(7,461)
Depreciation - leases(11,858)(4,049)(1,526)-(17,433)
Impairment(841)---(841)
Share of equity accounted net
earnings
174
1,719--1,893
Segment Profit
35,854
15,9715,604(3,281)54,148
Interest income78
Interest expense(701)
Interest expense - leases
(5,480)
Profit before tax48,045
Tax expense
(14,292)
Profit after tax33,753
Non-controlling interest
(9,192)
Net Profit attributable to the
shareholders of the parent
24,561
Reportable segment assets280,40590,06649,382(11,078)408,775
Reportable segment liabilities133,73374,16438,000***(11,078)234,819
*Other income includes:
Government wage subsidies and resurgence support payments received of $1.9m within Pharmacy Services an
d
$0.6m in Community Health.
Gain on step acquisitions, $0.7m within Pharmacy Services and $0.4m within Medical Services.
**Other expenses within Corporate includes one-off transaction costs of $1.4m associated with the process to acquire
Tamaki Health. Green Cross Health along with its consortium partner formally withdrew from the process in Novembe
r
2021.
***Intersegmental elimination.
-15-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
4 Segment reporting (continued)
Pharmacy
Services
Medical
Services
Communit
y
HealthCorporateTotal
Note$'000$'000$'000$'000$'000
March 2021
External revenues6.1307,74381,687170,181-559,611
Other income*
9,095
4661,230-10,791
Total Revenue
316,838
82,153171,411-570,402
Cost of products sold(188,007)---(188,007)
Employee benefit expense(59,233)(58,779)(159,281)-(277,293)
Lease expenses(2,004)(143)(60)-(2,207)
Other expenses(26,825)(10,943)(5,706)(2,084)(45,558)
Depreciation and amortisation(6,233)(1,042)(785)-(8,060)
Depreciation - leases(10,507)(3,015)(1,816)-(15,338)
Impairment(197)-(45)-(242)
Share of equity accounted net
earnings
314
1,091--1,405
Segment Profit
24,146
9,3223,718(2,084)35,102
Interest income84
Interest expense(1,094)
Interest expense - leases
(5,166)
Profit before tax28,926
Tax expense
(7,890)
Profit after tax21,036
Non-controlling interest
(4,284)
Net Profit attributable to the
shareholders of the parent
16,752
Reportable segment assets269,99864,18141,807(11,103)364,883
Reportable segment liabilities136,93654,45434,949**(11,103)215,236
*Other income includes government wage subsidies received of $9.1m within Pharmacy Services, $0.5m Medical Services
and $1.2m Community Health.
**Intersegmental elimination
-16-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
5 Business combinations
Business combinations acquired during the year include; Apollo Medical Limited, Darfield Medical Centre Limited, Gain
Health Centre Limited, Muritai Health Centre Limited, Mt Wellington Health Centre, Wakatipu Medical Centre, Onehunga
Medical Pharmacy (2022) Limited, Katikati & Katikati Health Pharmacies, Whakatane Pharmacies 2021 Limited, The
Doctors (Napier) Limited, Silverstream Health Centre Limited and Walls & Roche Royal Oak Pharmacy Limited. None o
f
these acquisitions are individually material to the Group's result.
Carrying
ValueFair value
$'000$'000
Identifiable assets acquired and liabilities assumed
Total assets13,46113,461
Total liabilities
(9,815)
(9,815)
Identifiable net assets
3,646
3,646
Consideration transferred
Satisfied by:
Cash consideration17,947
Deferred consideration648
Effect of step acquisitions
3,816
Total consideration22,411
Less cash acquired (included in assets above)
(3,808)
Net consideration
18,603
Goodwill
Goodwill recognised as result of the acquisitions are as follows:
Total consideration22,411
Identifiable net assets
(3,646)
Goodwill
18,765
The amount of revenue included in the consolidated statement of comprehensive income is $33.0 million with a net profit
after tax of $3.2 million in respect of the entities acquired during the year.
If the acquisitions had occured on 1 April 2021, management estimates that consolidated operating revenue would have
been $699.6m, and consolidated profit after tax for the year would have been $37.4m.
6 Operating performance
6.1 Revenue
20222021
Revenue from contracts with customers$'000$'000
Pharmacy retail and dispensary305,738280,553
Other pharmacy services58,73927,190
Medical services110,55181,687
Community health
191,600
170,181
666,628559,611
-17-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
6 Operating performance (continued)
Disaggregation of contract revenue
Reportable segments
Pharmacy
Services
Medical
Services
Community
Health
Services
Total
$'000$'000$'000$'000
Year ended 31 March 2022
Timing of revenue recognition
Transferred at a point in time349,27444,438130,782524,494
Transferred over time
15,203
66,11360,818142,134
364,477110,551191,600666,628
Year ended 31 March 2021
Timing of revenue recognition
Transferred at a point in time297,93633,516121,258452,710
Transferred over time
9,807
48,17148,923106,901
307,74381,687170,181559,611
Pharmacy retail and dispensing services
Pharmacy retail and dispensary services include retail sales, dispensing, professional advisory and care services. For all
these services control is considered to pass to the customer at the point when the customer can use or otherwise benefit
from the goods and services. For retail sales, control passes at point of sale. Retail sales are predominantly by credit card,
debit card or in cash.
The Group operates its own Living Rewards loyalty programme. When a retail sale is made and points are earned, the
resulting revenue is allocated between the loyalty programme and the other components of the sale. The amount allocated
to the loyalty programme is deferred, and is recognised as revenue when the points are redeemed under the terms of the
programme or when it is no longer probable that the points under the programme will be redeemed.
Other pharmacy services
These mainly include franchise fees, supplier income and other service revenue. Control for franchise services pass over
time as the services are delivered over the term of the franchise agreement. Payment terms for franchise fees is generally
20 to 30 days. Supplier income is earned, as promotional services are rendered over a specified time period by the Group.
Payment terms are generally 20 to 30 days.
Medical services
Medical services include capitation and health services and patient fees. Control for capitation and health services passes
over time as the healthcare services are delivered to the patient over a certain time period. Payments terms are generally
20 to 30 days. Patient fees are earned at a point in time. Control passes to the customer when service has been delivered
to a customer. Patient fees are predominantly by credit card, debit card or in cash.
Community Health services
Community Health services consist primarily of community health and support services. Control passes to the customer as
the services are delivered and simultaneously consumed by the customer. Payment terms are generally 30 to 60 days.
-18-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
6 Operating performance (continued)
Contract assets and contract liabilities
Current contract assets represent revenue where the service has been provided but not yet invoiced to the customer.
When the customer has been invoiced, any outstanding balances are included in receivables. Contract liabilities reflect
payments received for services that have not yet been provided and the payments will be recognised as revenue over
time.
Costs directly related to the acquisition of a contract or renewal of an existing contract are capitalised and amortised over
the life of the contract. Cost relating to fulfilling a contract are only capitalised if they meet the recognition criteria under NZ
IFRS 15. Costs incurred in obtaining a contract are only capitalised to the extent they are incremental.
Contract balances
The following table provides information, about receivables, contract assets and contract liabilities from contracts with
customers:
31 Mar 202231 Mar 2021
$'000$'000
Trade receivables which are included in trade and other receivables31,06624,180
Contract assets16,12413,834
Contracts liabilities(10,786)(7,994)
Significant changes in the contract assets and the contract liabilities during the period are as follows:
2022202220212021
Contract
Assets
Contract
liabilities
Contract
Assets
Contract
liabilities
Revenue recognised that was included in the contract
liability balance at the beginning of the period-7,994-6,019
Transfer from contract assets recognised at the
beginning of the period to receivables13,834-14,273-
As at 31 March 2022, the amount of revenue deferred and recognised as a contract liability for the loyalty programme is
$7.5m (2021: $7.2m). This will be recognised as revenue as the loyalty points are redeemed or expire, which is expected
to occur over the next fifteen months.
6.2 Operating expenditure
20222021
$'000$'000
Cost of products sold210,164188,007
Employee benefit expense328,020277,293
Lease expenses5642,207
Other expenses51,80044,070
Audit fees250244
Other services provided by auditors226124
Directors’ fees in respect of the parent company450411
Directors’ fees in respect of the subsidiary companies224224
Bad debts written off and movement in doubtful debt provision
639
485
592,337513,065
Auditor’s remuneration to KPMG comprises:
Annual audit of financial statements250229
Annual audit of financial statements - Prior year
-
15
250244
-19-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
6 Operating performance (continued)
20222021
$'000$'000
Other services provided by auditors:
Taxation services224124
Other services
2
-
226124
Taxation services relate to compliance and related services, and tax support associated with the Tamaki Health process.
Other services relates to cyber security testing.
7 Income tax expense
20222021
Notes$'000$'000
Current tax expense(15,993)(3,853)
Deferred tax benefit/(expense)14
1,701
(4,037)
Total current tax
(14,292)
(7,890)
Imputation credit account:
Available for use in subsequent periods $24.9m (2021: $21.8m).
20222021
Notes$'000$'000
Numerical reconciliation between tax expense and pretax accounting profit
Profit before tax48,04528,926
Income tax expense at 28% (13,453)(8,099)
(Add)/Deduct tax effects of adjustments:
Other
(839)
209
(14,292)(7,890)
Taxation accounting policy
Income tax expense is charged to profit and loss and comprises current tax and deferred tax, unless it relates to an item
recognised in other comprehensive income or equity in which case it is recognised in other comprehensive income or
equity.
Current tax is the estimated tax payable on the current period’s taxable income using current tax rates, adjusted for any
under or over accrual in respect of prior periods.
Deferred tax is recognised using the balance sheet approach, allowing for temporary differences between the carrying
amounts of assets and liabilities for accounting purposes and the carrying amounts for tax purposes. A deferred tax asset
is recognised to the extent that it is probable that future taxable profits will be available against which the temporary
differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is
no longer probable that the related benefit will be realised.
-20-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
8 Earnings per share
The earnings per share and dividend per share is calculated using the Group’s result divided by the weighted average
number of shares for the listed entity, Green Cross Health Limited.
20222021
cents pe
r
share
cents pe
r
share
Basic earnings per share
17.16
11.70
The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent and a
weighted average number of ordinary shares issued during the year of 143,152,759 (2021: 143,152,759).
Diluted earnings per share
17.10
11.69
The calculation of diluted earnings per share is based on the profit attributable to equity holders of the parent and a
weighted average number of ordinary shares issued during the year after adjustment for the effects of all dilutive ordinary
shares of 143,649,768 (2021: 143,302,759).
Net tangible assets/(liabilities) per share
0.30
(2.23)
The calculation of net tangible assets/(liabilities) per share is based on net assets/(liabilities) less deferred tax and
intangible assets (refer Note 13 and Note 14) and the closing number of ordinary shares at the end of the year.
Net assets per share
121.52
104.54
The calculation of net assets per share is based on net assets and the closing number of ordinary shares at the end of the
year.
9 Dividends
20222021
cents pe
r
share
cents pe
r
share
Dividends per share
3.00
-
In December 2021, Green Cross Health Limited paid an interim dividend of 3.0 cents per qualifying ordinary share to
shareholders, which was fully imputed to 28%. (2021: None).
10 Trade and other receivables and income taxes refundable
20222021
$'000$'000
Trade receivables31,06624,180
Provision for doubtful debts(2,138)(1,511)
Contract assets16,12413,834
Accrued income496534
Other receivables and prepayments
1,762
1,896
47,31038,933
Other receivable - non-current asset
2,127
-
Income taxes refundable
-
1,831
-21-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
11 Property, plant and equipment
20222021
$'000$'000
Opening Cost82,51679,319
Acquisitions through business combinations3,456275
Additions4,1354,204
Disposals(498)(1,282)
Assets written off
(3,585)-
Closing cost
86,024
82,516
Opening accumulated depreciation63,54058,667
Depreciation for the period6,3195,921
Disposals(494)(1,048)
Assets written off
(2,880)-
Closing accumulated depreciation
66,485
63,540
Closing book value19,53918,976
Work in progress
190
541
Total property, plant and equipment
19,729
19,517
Property, plant & equipment accounting policy
Property, plant & equipment owned by the Group consists primarily of leasehold improvements and is stated at cost less
accumulated depreciation and any impairment losses. Property, plant & equipment acquired in stages is not depreciated
until the asset is ready for its intended use.
Depreciation is provided on a straight-line basis on all property, plant & equipment components to allocate the cost of the
asset (less any residual value) over its useful life or if it relates to assets in a leased premises, the life of the lease i
f
shorter. The residual values and remaining useful lives of asset components are reviewed at least annually.
Current estimated useful lives of property, plant and equipment are between two and twelve years.
Subsequent expenditure capitalised only if it is probable that future economic benefit associated with the expenditure will
flow to the Group. All other costs are recognised in the profit and loss as expenditure when incurred.
Any resulting gain or loss on disposal of an asset is recognised in the profit and loss in the period in which the asset is
disposed of.
12 Leases
As a lessee
The Group’s leased assets include property leases for pharmacies, medical centres and offices. The lease terms of these
leases typically range from 2 to 30 years (inclusive of any renewal options). Some leases provide for additional rent
payments that are based on changes in CPI or market rental rates. The Group also leases motor vehicles and equipment,
which typically run for a period of 3 to 5 years.
As a lessee, the Group recognises right-of-use assets and lease liabilities for the majority of its leases – i.e. these leases
are on-balance sheet.
The carrying amounts of right-of-use assets and lease liabilities are as below:
Right-of-use assetsPropert
y
Motor
VehiclesEquipmentTotal
$'000$'000$'000$'000
2022
Balance as at 1 April 202175,28362644676,355
Balance as at 31 March 202280,2992,6061,14084,045
Depreciation16,01891050517,433
-22-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
12 Leases (continued)
Property
Motor
VehiclesEquipmentTotal
$'000$'000$'000$'000
2021
Balance as at 1 April 202083,7051,3451,04086,090
Balance as at 31 March 202175,28362644676,355
Depreciation14,02571959415,338
Additions to property of $21.4m (2021: $3.3m) have been made to right-of-use assets during the current year.
Lease liabilitiesPropert
y
Motor
VehiclesEquipmentTotal
$'000$'000$'000$'000
2022
Balance as at 1 April 202183,51368648784,686
- Current liability12,39768648713,570
- Non-current liability71,116--71,116
Balance as at 31 March 202289,6102,6211,17693,407
- Current liability13,06057066114,291
- Non-current liability76,5502,05151579,116
2021
Balance as at 1 April 202091,0931,4081,07993,580
- Current liability12,39172259213,705
- Non-current liability78,70268648779,875
Balance as at 31 March 202183,51368648784,686
- Current liability12,39768648713,570
- Non-current liability71,116--71,116
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment
made. It is re-measured when there is:
a change in future lease payments arising from a change in an index or rate; or
a change in the estimate of the amount expected to be payable under a residual value guarantee; or
changes in assessment of whether a purchase or extension option is reasonably certain to be exercised or a
termination option is reasonably certain not to be exercised; or
any other change in the future lease payments or the lease term due to a lease modification that’s not accounted
for as a separate lease.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include
renewal options. The assessment of whether the Group is reasonably certain to exercise such options impact the lease
term, which significantly affects the amount of lease liabilities and right-of-use assets recognised.
The Group negotiated rent concessions with its landlords for some of its property leases as a result of the impacts of the
COVID-19 pandemic during the period.The Group applied the practical expedient for COVID-19 related rent concessions
consistently to eligible rent concessions relating to its property leases.
-23-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
12 Leases (continued)
The amount credited to the consolidated statement of comprehensive income for the reporting period to reflect changes in
lease payments arising from rent concessions to which the Group has applied the practical expedient is $0.6m (2021:
$1.2m).
20222021
$'000$'000
Maturity analysis of contractual undiscounted cash flows
Less than one year18,63316,862
Two to five years50,11743,331
More than five years
54,716
50,678
123,466110,871
As a lessor
The Group sub-leases some of its properties. The right-of-use assets recognised from the head leases are measured at
cost. The sub-lease contracts are classified as operating leases under NZ IFRS 16.
13 Intangible assets
20222021
Notes$'000$'000
Software and other intangible assets
Opening costs17,47517,687
Acquisitions through business combinations36-
Additions1371,112
Disposals(1,162)(651)
Assets written-off/impairment
(878)
(673)
Closing cost
15,608
17,475
Opening accumulated amortisation12,66611,405
Amortisation for the period1,2792,139
Disposals(567)(447)
Assets written-off/impairment
(742)
(431)
Closing accumulated amortisation
12,636
12,666
Closing book value
2,972
4,809
Goodwill
Opening costs136,006127,242
Other acquired goodwill2,177295
Additions518,7658,529
Disposals
(114)
(60)
Closing cost
156,834
136,006
Total intangible assets
159,806
140,815
Intangible assets accounting policy
Intangible assets recognised by the Group are stated at cost less accumulated amortisation and any impairment losses
with the exception of goodwill (see below).
Intangible assets acquired in stages are not amortised until the asset is ready for its intended use.
-24-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
13 Intangible assets (continued)
Amortisation is provided on a straight-line basis for software to allocate the cost of the asset (less any residual value) over
its useful life. The residual values and remaining useful lives of software are reviewed at least annually. Other intangible
assets represent franchisee store rebranding costs and have an indefinite life.
Estimated useful lives of the asset classes are:
Software 3-5 years
Subsequent expenditure is capitalised if future economic benefit will flow to the Group and the requirements of the
standard are met. All other costs are recognised in the profit and loss as expenditure when incurred.
Any resulting gain or loss on disposal of an intangible asset is recognised in the profit and loss in the period in which the
intangible asset is disposed of.
Intangible assets disclosed in the financial statements relate to computer software, trademarks and other indefinite life
intangible assets. Indefinite life intangible assets are tested annually for impairment.
Goodwill accounting policy
Goodwill arises on the acquisition of subsidiaries. Goodwill represents the excess of the purchase consideration over the
fair value of the net identifiable tangible and intangible assets at the time of acquisition.
Goodwill is allocated to the relevant cash generating units expected to benefit from the acquisition and tested for
impairment annually, or earlier at any interim reporting dates if there are indicators of impairment.
If the recoverable amount is less than the carrying amount of the cash generating unit then an impairment loss is
recognised in profit and loss and the carrying amount of the asset is written down. Recoverable amount is calculated as
the greater of the fair value less cost to sell and value in use.
The relative value of the goodwill allocated to the relevant cash generating unit is included in the determination of any gain
or loss on disposal.
Impairment testing
Discounted cash flow (DCF) models have been based on three-year forecast cash flow projections. The budget for the
year-ending 31 March 2023 is the basis for the first year's projections and projections for subsequent periods have been
based on this plus growth. Terminal cash flows are projected to grow in-line with the New Zealand long-term inflation rate.
The discount rate was a post-tax measure based on the rate of 20-year government bonds issued by the government in
the relevant market and in the same currency as the cash flows, adjusted for a risk premium to reflect both the increased
risk of investing in equities generally and the systematic risk of the specific CGU.
Impairment test assumptions 2022Pharmac
y
Services
Medical
Services
Communit
y
Health
Notes$'000$'000$'000
Discount rate - post tax%8.45%10.30%11.73
Terminal growth rate%2.50%2.50%2.50
Carrying amount of goodwill allocated to the unit ($000)85,75852,01519,061
Carrying value of other intangible assets with indefinite useful lives ($000)2,048--
Impairment test assumptions 2021Pharmac
y
Services
Medical
Services
Communit
y
Health
Discount rate - post tax%8.23%8.50%9.57
Terminal growth rate%1.50%1.50%1.50
Carrying amount of goodwill allocated to the unit ($000)76,87540,07019,061
Carrying value of other intangible assets with indefinite useful lives ($000)2,048--
For the purpose of impairment testing, goodwill is allocated to the Group's operating divisions which represent the lowest
level within the Group at which the goodwill is monitored for internal management purposes. Goodwill is allocated across
all operations within a division that have similar economic characteristics and collectively benefit from acquisitions that
increase the Group's portfolio.
-25-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
13 Intangible assets (continued)
Sensitivities
No impairment was identified for Pharmacy Services, Medical Services or Community Health services as a result of this
review, nor under any reasonable possible change, in any of the key assumptions described above.
14 Deferred tax assets
The movement in deferred tax asset and liability during the year is made up of the following:
Opening Net additions
Recognised in
profit and
lossClosing
$'000$'000$'000$'000
Group - 2022
Property, plant and equipment2,317-4922,809
Provisions and accruals6,922-1,3508,272
Tax losses446-(429)17
Right of use assets(21,379)(7,035)4,881(23,533)
Lease liabilities
23,712
7,035(4,593)26,154
12,018-1,70113,719
Group - 2021
Property, plant and equipment2,288-292,317
Provisions and accruals6,785-1376,922
Tax losses4,885-(4,439)446
Right of use assets(24,105)(1,569)4,295(21,379)
Lease liabilities
26,202
1,569(4,059)23,712
16,055-(4,037)12,018
15 Equity accounted group investments
20222021
$'000$'000
The movement in equity accounted investments comprises:
Opening carrying amount7,7246,988
Investment in associates and joint ventures725128
Disposal of associates and joint ventures(3,639)-
Share of net earnings1,8931,405
Dividends22
(1,983)
(797)
4,7207,724
There are no individually material associates or joint ventures.
Amount of goodwill within the carrying amount of equity accounted group
investments:
Opening carrying amount4,0244,024
Disposal of associates and joint ventures
(2,037)
-
Closing carrying amount
1,987
4,024
-26-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
15 Equity accounted group investments (continued)
Summary associate and joint venture financial information
The aggregate results of the associates and joint venture financial position and current year's profit are as follows:
AssetsLiabilitiesRevenue
Net profit
after tax
$'000$'000$'000$'000
As at and for the year ended 31 March 202213,4736,68834,7624,539
As at and for the year ended 31 March 202116,3529,30551,7084,326
Investments in associates and joint ventures accounting policy
An associate is an investee over which the Group has significant influence, which is the power to participate in the
financial and operating policy decisions of the investee but not to control or jointly control those policies.
A joint venture is a joint arrangement in which the parties that have joint control of the arrangement have rights to the net
assets of the arrangement. Joint control is the contractually agreed sharing of control of the arrangement which only exists
when decision about the relevant activities require the unanimous consent of the parties sharing control.
The results and assets and liabilities of associates and joint ventures are incorporated into the financial statements of the
Group using the equity method of accounting. Under the equity method, the initial investment in the Group financial
statements is measured at cost and adjusted thereafter for the Group’s share of profit and loss and other comprehensive
income of the associate and joint venture. Any goodwill arising on the acquisition of an associate or joint venture
investment is included in the carrying amount of the investment net of dividends received. Where the Group’s share o
f
losses of the associate of joint venture exceeds the Group’s interest in that associate or joint venture, the Group
discontinues recognising its share of losses unless it has a legal or constructive obligation to continue doing so. The equity
method is discontinued where the Group ceases to exert significant influence or joint control over the investee.
Accounting policies adopted by associates and joint ventures are generally consistent with those of the Group. Where a
material difference does exist, appropriate adjustments are applied to ensure congruence with the policies of the Group,
the most significant of these being the recognition of deferred tax.
16 Trade and other payables and income taxes payable
20222021
$'000$'000
Payables and accruals
Trade payables34,39938,228
Payable to non-controlling interest7,3997,875
Contract liabilities10,7867,994
Accrued expenses31,18725,228
Employee entitlements
29,531
26,852
113,302106,177
Income taxes payable
4,076
-
Employee entitlements accounting policy
Employee entitlements for salaries, bonuses, long service, alternate and annual leave are provided for and recognised as
a liability when benefits are earned by employees but not paid at the reporting date.
-27-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
17 Borrowings
20222021
$'000$'000
Current1,9082,035
Non-current
22,126
22,338
24,03424,373
The Group's interest rate on outstanding loans is calculated based on BKBM or cost of funds plus a margin. The current
interest rate is between 2.16% and 5.20% (2021: 2.25% - 3.96%). A 0.5% increase/decrease in the effective interest rate
would result in a decrease/increase in after tax profit of $87,000.
Green Cross Health Limited and all its subsidiaries provided guarantees and indemnities in favour of BNZ covering all
loans held by the parent and subsidiary companies. Loans within partnership subsidiaries are covered by a GSA
agreement over the individual business assets.
Security has also been provided by Green Cross Health Limited in favour of ANZ in relation to one Pharmacy subsidiary.
The Group's primary lender is the BNZ. As at balance date, the Group has undrawn banking facilities of $44m (2021:
$41m). The maturity of the debt facility with BNZ is 31 August 2024.
Borrowings and advances accounting policy
Borrowings and advances are initially recognised at fair value, including directly attributable transaction costs.
Subsequent to initial recognition, borrowings and advances are measured at amortised cost using the effective interest
method, less any impairment losses on advances.
18 Operating cash flow reconciliation
20222021
$'000$'000
Profit for the year33,75321,036
Add/(deduct) non-cash items:
Depreciation, amortisation and impairment25,73523,640
Other non-cash items3,273(3,946)
Add/(deduct) changes in working capital:
Receivable and accruals movement(8,377)4,174
Inventory(1,777)4,332
Payable and accruals movements7,12515,525
Add/(deduct) items classified as cash flows from financing activities:
Interest expense6231,010
Interest expense - leases
5,480
5,166
Net cash inflow from operating activities
65,835
70,937
-28-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
19 Shares on issue
20222021
$'000$'000
Shares authorised and on issue
Opening number of shares143,303143,303
Shares issued - fully paid--
Shares issued - partly paid--
Shares cancelled - partly paid
(150)
-
143,153143,303
Shares held as treasury stock-(150)
Performance share rights
497
-
143,650143,153
All ordinary shares carry equal rights in terms of voting, dividend payments and distribution upon winding up.
Share capital
Incremental costs directly attributable to the issue of ordinary shares, share options and share capital are recognised as a
deduction from equity.
20 Share-based payments
Performance Share Rights
Performance Share Rights (PSRs) were offered to some senior executives, commencing 1 April 2019. Under the scheme
PSRs are issued to participants which give them the rights to receive ordinary shares in the Company after a three year
period, subject to certain vesting and other conditions being met. The fair value is measured at grant date and amortised
over the vesting period. The vesting of the PSRs is subject to the Company achieving performance hurdles relating to the
growth of its earnings per share over a three year measurement period. There is no exercise price for these performance
rights and there is no right to dividends during the vesting periods.
The total expense recognised in the year to 31 March 2022 in relation to the PSRs was $90,000 (2021: $316,000). No
rights were vested or exercised during the year.
PSRs granted are summarised as below:
Grant DatePSR PeriodPSRs grantedPSRs vested
PSRs end o
f
period
23/10/2020 01/04/2019 - 31/03/2022131,637-131,637
23/10/202001/04/2020 - 31/03/2023176,693-176,693
28/06/2021
01/04/2021 - 31/03/2024
188,679
-188,679
Total497,009-497,009
21 Financial instruments
The Group is party to financial instruments as part of its normal operations. Financial instruments include cash and cash
equivalents, borrowings, trade and other receivables and trade and other payables.
Financial instruments are initially recognised at their fair value less transaction costs, and subsequently measured at their
amortised cost. A financial instrument is recognised if the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets
expire or if the Group transfers the financial asset to another party without retaining control or substantially all risks and
rewards of the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are
discharged or cancelled.
Financial assets and financial liabilities are recognised at amortised cost.
Risk management policies are used to mitigate the Group’s exposures to credit risk, liquidity risk and market risk that arise
in the normal course of operations.
-29-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
21 Financial instruments (continued)
Credit Risk
The Group’s maximum credit risk resulting from a third party defaulting on its obligations to the Group is represented by
the carrying amount of each financial asset on the statement of financial position. The Group is not exposed to any
material concentrations of credit risk other than its exposure within the retail pharmacy and government sectors. The
Group monitors credit limits on a monthly basis. All credit facilities to external parties are provided on normal trade terms
(unsecured, to a maximum of 45 days). At any one time, the Group generally has amounts owed to and amounts owed by
the same counterparty, although no legal right of set-off exists. The Parent company holds direct debit authorities for
amounts payable under the contractual terms of its franchise agreements. The Parent regularly monitors the credit ratings
issued, and any qualifications to those ratings, to the financial institutions (and those of the ultimate parent financial
institution) used by the Group.
The status of trade receivables at reporting date is as follows:
Gross
receivable
2022
Impairment
2022
Gross
receivable
2021
Impairment
2021
$'000$'000$'000$'000
Trade and other receivables
Not past due40,931-37,567-
Past due 0-30 days4,300-938-
Past due 31-120 days4,206-428-
Past due more than 120 days
2,138
(2,138)1,511(1,511)
Total
51,575
(2,138)40,444(1,511)
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity
requirements on an ongoing basis. In general, the Group generates sufficient cash flows from its operating activities to
meet its obligations arising from its financial liabilities and has credit lines in place to cover potential shortfalls. The
following table sets out the contractual cash flows for financial liabilities that are settled on a gross cash flow basis:
Carrying Value
Contractual
cash flows
Less than one
yea
r
Between one
year and two
years
Between two
years and five
years
$'000$'000$'000$'000$'000
2022
Borrowings24,03425,9861,9561,50022,530
Trade and other payables
72,985
72,98572,985--
Total non-derivative
liabilities
97,019
98,97174,9411,50022,530
Carrying Value
Contractual
cash flows
Less than one
year
Between one
year and two
years
Between two
years and five
years
$'000$'000$'000$'000$'000
2021
Borrowings24,37325,6272,08621,0492,492
Trade and other payables
71,331
71,33171,331--
Total non-derivative
liabilities
95,704
96,95873,41721,0492,492
-30-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
21 Financial instruments (continued)
Market Risk
Refer to note 17 for details of the interest rates for the group loans and borrowings, which are the most significant financial
instruments.
Capital management
The Group’s capital includes share capital and retained earnings. The Group is not subject to any externally imposed
capital requirements.
The allocation of capital between its specific business segments’ operations and activities is, to a large extent, driven by
the optimisation of the return achieved on the capital allocated. The process of allocating capital to specific business
segment operations and activities is undertaken independently of those responsible for the operation.
The Group’s policies in respect of capital management and allocation are reviewed regularly by the Board of Directors.
The carrying amount of the Group’s on-balance sheet financial instruments including trade and other receivables, cash
and cash equivalents, borrowings and trade payables, closely approximate their fair values as at 31 March 2022 and 31
March 2021. The assessment of fair value relating to borrowings was determined by reference to observable market data
(level 2).
22 Related parties
The Group has commercial franchise agreements with stores relating to marketing levies and franchise fees. The Group
also enters into transactions on behalf of the stores which are on-charged. These transactions comprise items such as
training courses, supplier agreements, central advertising campaigns, loyalty card costs, and IT related costs. The Parent
has leased some equipment which is on-leased to associate companies. The Parent performs accounting services, based
on agreed terms, for some of the stores and medical centres.
The Parent has shareholder agreements with the other shareholders of the associates. The agreements set out the return
on investment/profit sharing arrangements relating to these investments. Payable to non-controlling interests represents
loans advanced to the Group.
Related party transactions for the group:
Transaction value
Balance outstanding
2022202120222021
$'000$'000$'000$'000
Franchise fees and on-charged costs to equity
accounted investments62117819
Management service charges and on charged
costs to equity accounted investments30561812175
Dividend Income1,983797--
Receivable from other related parties--2,464586
Key management personnel remuneration
The Group provides compensation to key management personnel which comprises the directors and executive officers.
Some senior executives also participate in the performance share rights. Key management personnel (includes the Group
CEO, the Group CFO, some senior executives and company directors) compensation comprised:
20222021
$'000$'000
Remuneration and Directors fees2,1631,963
Short term employee benefits433303
Long term incentives
90
316
2,6862,582
-31-
Notes to the consolidated financial statements
For the year ended 31 March 2022
(continued)
23 Subsequent events
On 26 May 2022, Green Cross Health Limited declared a final dividend of 3.5 cents per qualifying ordinary share
amounting to $5.0m, which will be fully imputed at 28%. The dividend record date is 10 June 2022 and payment will occur
on 23 June 2022.
No adjustment is required to these consolidated financial statements in respect of this event.
-32-
---
GREEN CROSS HEALTH RESULTS ANNOUNCEMENT 27/05/2022
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer
GREEN CROSS HEALTH LIMITED (GXH)
Reporting Period 12 months to 31 March 2022
Previous Reporting Period 12 months to 31 March 2021
Currency
New Zealand Dollars
Amount (000s) Percentage change
Revenue from continuing operations
$670,327 17.52%
Total Revenue $670,327 17.52%
Net profit from continuing operations attributable
to shareholders
$24,561 46.62%
Total net profit attributable to shareholders
$24,561 46.62%
Final Dividend
Amount per Quoted Equity Security 0.03500000
Imputed amount per Quoted Equity Security 0.01361111
Record Date 10 June 2022
Dividend Payment Date 23 June 2022
Current period Prior comparable period
Net tangible assets per Quoted Equity Security* $0.003 -$0.02
A brief explanation of any of the figures above
necessary to enable the figures to be understood
* Due to the nature of the Company’s business,
intangibles assets are a major component of total assets.
Net assets per quoted equity security are $1.22 (31
March 2021: $1.05).
Please refer to the attached audited Financial Statements
for the twelve months ended 31 March 2022.
Authority for this announcement
Name of person
authorised to make
this announcement
Ben Doshi – Group CFO
Contact person for this
announcement
Ben Doshi – Group CFO
Contact phone number +64 9 571 9080
Contact email address
ben.doshi@greencrosshealth.co.nz
Date of release through MAP
27/05/2022
Audited financial statements accompany this announcement.
---
DISTRIBUTION NOTICE 27/05/2022
Section 1: Issuer information
Name of issuer Green Cross Health Limited
Financial product name/description Ordinary Shares
NZX ticker code GXH
ISIN (If unknown, check on NZX
website)
NZBDOE0001S8
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies No
Record date 10/06/2022
Ex-Date (one business day before
the Record Date)
09/06/2022
Payment date (and allotment date for
DRP)
23/06/2022
Total monies associated with the
distribution
$5,010,347
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution 0.04861111
Total cash distribution 0.03500000
Excluded amount (applicable to listed
PIEs)
n/a
Supplementary distribution amount 0.00617647
Page 2
Section 3: Imputation credits and Resident Withholding Tax
Is the distribution imputed Fully imputed
If fully or partially imputed, please
state imputation rate as % applied
28%
Imputation tax credits per financial
product
0.01361111
Resident Withholding Tax per
financial product
0.00243056
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP
N/A N/A
Date strike price to be announced (if
not available at this time)
N/A
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
N/A
DRP strike price per financial product
N/A
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
N/A
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Ben Doshi – Group CFO
Contact person for this announcement Ben Doshi – Group CFO
Contact phone number +64 9 571 9080
Contact email address
ben.doshi@gxh.co.nz
Date of release through MAP
27/05/22
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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