Green Cross Health Limited reported a 28% rise in net profit to NZD 20.4 million for FY26, driven by gains in both pharmacy and medical divisions. The company announced a conditional sale of its Medical division to Tend Health for NZD 270 million, aiming to refocus on its core pharmacy business.
- FY26 group revenue grew to NZD 546 million
- Net profit after tax attributable to shareholders increased 28%
- Pharmacy division revenue up 2%, operating profit up 4%
- Medical division revenue rose 8%, operating profit surged 33%
- Conditional sale of Medical division to Tend Health for NZD 270 million
Strong Financial Performance Across Divisions
Green Cross Health Limited (NZX:GXH) delivered a solid financial year ending 31 March 2026, with group operating revenue climbing to NZD 546.0 million, up from NZD 523.8 million the previous year. Operating profit before interest and tax reached NZD 45.3 million, reflecting an 17% increase from the prior period. Net profit after tax attributable to shareholders rose 28% to NZD 20.4 million, underpinned by growth in both the pharmacy and medical divisions.
The pharmacy division, comprising Unichem and Life Pharmacies, reported revenue of NZD 380.2 million, a 2% increase driven by higher dispensing volumes, including new high-value medicines like Wegovy and funded cancer treatments. Operating profit increased 4% to NZD 22.2 million despite margin compression from low-margin medicines. The network dispensed over 38 million prescriptions and administered more than 330,000 vaccinations, a 1% rise on the prior year. Digital enhancements such as a new pharmacy app and online booking system were launched, boosting patient engagement and operational efficiency.
Medical Division Growth and Digital Enablement
The Medical division, operating 65 centres under The Doctors brand and serving New Zealand's largest enrolled patient base of 413,000, saw revenue increase 8% to NZD 165.8 million. Operating profit surged 33% to NZD 26.0 million, benefiting from funding uplifts and operational improvements. Digital enablement initiatives accelerated, with The Doctors app registrations up 38% to 165,000 users and online consultations doubling for casual patients. The division also secured government approval to establish a new Primary Health Organisation, Community Care Limited, set to commence operations on 1 July 2026, promising greater autonomy and streamlined funding.
Physical network investment continued with two major refurbishments and a rollout of The Doctors brand to 47 centres. The division's team-based care model expanded, improving patient access and workload sustainability for clinicians.
Strategic Shift: Conditional Sale of Medical Division
In a significant strategic move, Green Cross Health announced a conditional agreement to sell its Medical division to Tend Health for NZD 270 million, subject to adjustments and shareholder approval. The sale, expected to complete by end of July 2026, will allow Green Cross Health to sharpen its focus on its core pharmacy business. The Medical division has been reclassified as an asset held for sale subsequent to 31 March 2026. Shareholder approval remains a key condition before the transaction can proceed.
This divestment follows a period of strong operational performance in the Medical division, but signals a deliberate pivot to concentrate resources and growth initiatives around the pharmacy network, including ongoing digital transformation and service expansion through Care & Advice Health Hubs operating at 170 sites nationwide.
Balance Sheet Strength and Dividend Policy
The company ended the year with net assets of NZD 190.8 million, up from NZD 181.0 million, supporting a net asset value per share of 132.8 cents. Cash balances increased to NZD 28.4 million, with disciplined capital management including repayments of bank borrowings and investments of NZD 9.6 million in technology and refurbishments.
The Board declared a final dividend of 5.5 cents per share, bringing total dividends for FY26 to 8.5 cents per share, reflecting confidence in the company’s cash flow and ongoing business prospects.
Governance and Audit Assurance
Green Cross Health’s financial statements received an unqualified audit opinion from KPMG, who highlighted the annual impairment testing of goodwill as a key audit matter due to the significant balances involved. No impairment was identified, and assumptions around discount and growth rates were deemed reasonable. The company maintains robust governance practices, with a balanced board comprising independent and shareholder-associated directors, and active risk management frameworks aligned with NZX Corporate Governance Code recommendations.
Bottom Line?
The conditional sale of the Medical division marks a pivotal moment for Green Cross Health, shifting its strategic focus squarely onto pharmacy services amid ongoing digital innovation and service expansion.
Questions in the middle?
- How will the divestment of the Medical division impact Green Cross Health's long-term revenue and profit mix?
- What operational changes will be implemented to accelerate growth in the pharmacy division post-sale?
- How might shareholder approval dynamics influence the timing and terms of the Medical division transaction?