ParagonCare anticipates recovering up to 32.5% of its exposure to the insolvent Infinity Retail Pharmacy Group, while maintaining a steady FY26 earnings outlook amid cost pressures.
- Expected recovery of A$11.7m to A$15.8m from Infinity Group administration
- 100% provision previously recognised on Infinity receivables
- FY26 revenue forecast around A$3.7 billion
- Underlying EBITDA projected between A$95m and A$100m
- Logistics and pricing pressures challenge cost management
Partial Recovery Expected from Infinity Group Receivables
ParagonCare (ASX:PGC) has revealed it now expects to recover between A$11.7 million and A$15.8 million from the administration of the Infinity Retail Pharmacy Group, representing roughly 24% to 32.5% of its outstanding exposure. This comes after the company had fully provisioned for the receivables in its half-year results, effectively writing off the amount as a loss.
The preliminary Estimated Outcome Analysis from the administrators remains subject to review and approval by secured lenders. ParagonCare also holds guarantees from Infinity’s owners and directors, which could provide additional recoveries beyond the initial distribution.
Cash Recovery and Ongoing Collaboration with Administrators
To date, ParagonCare has already received A$3.4 million in cash from the Australian Taxation Office relating to GST previously paid on the Infinity Group receivable. The company has committed to working constructively with the administrators to maximise any further recoveries, signalling a cautious optimism on clawing back value from the troubled pharmacy group.
FY26 Earnings Guidance Reflects Stable Trading Amid Cost Pressures
ParagonCare forecasts FY26 revenue of approximately A$3.7 billion, slightly up from the prior year, with underlying EBITDA expected in the range of A$95 million to A$100 million. This guidance includes the recent acquisition of Indonesian medical aesthetics company Haju, completed in April, which aims to bolster ParagonCare’s presence in Asia Pacific.
Net debt is projected to sit between two and 2.5 times EBITDA, assuming full-year contributions from acquisitions. The company acknowledges challenges from rising logistics costs and manufacturer price increases linked to higher oil prices, which are squeezing margins. Despite these headwinds, ParagonCare reports stable underlying trading performance and continues to prioritise disciplined cost control and working capital optimisation.
Strategic Expansion in Asia Continues
The acquisition of Haju Medical is part of ParagonCare’s broader strategy to expand its footprint across Asia, building on prior deals such as the purchase of Somnotec Group. These moves aim to diversify revenue streams and tap into growing markets beyond Australia and New Zealand.
Bottom Line?
ParagonCare’s partial recovery from Infinity Group softens the blow of a fully provisioned receivable, but cost pressures and debt levels remain key areas to watch as FY26 unfolds.
Questions in the middle?
- How will finalisation of the administrators’ analysis and secured lenders’ feedback impact the ultimate recovery amount?
- What effect will sustained logistics and pricing pressures have on ParagonCare’s margin and EBITDA in the second half of FY26?
- Can further acquisitions in Asia accelerate growth enough to offset domestic market challenges?