EBOS Group Ltd (EBO)
The Health Care Index has been under some pressure of late and has fallen rapidly sense mid-August. With this in mind, can you give me your thoughts on the index and EBO in particulate please.
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Answer
Hi Wayne,
The Healthcare Index has been weighed down heavily in recent weeks and months, largely due to the sharp decline in CSL, with few signs of strength elsewhere in the sector, despite a generally firm broader market. As a result, EBOS hasn’t benefited from sector support and continues to face its own company-specific challenges.
EBOS generates revenue primarily through the distribution of pharmaceuticals, medical supplies, and animal care products to pharmacies, hospitals, veterinarians, and retailers. Its income streams include wholesale and retail sales through TerryWhite Chemmart, logistics services, and owned consumer brands across the healthcare and pet care sectors.
The company noted in its FY25 report that near-term macroeconomic headwinds, including intense competition in wholesale pharmacy, weak hospital capital spending, and soft consumer sentiment have weighed on performance, particularly in discretionary pet categories. The net result was the stock endured its largest 1-day decline in 33 years:
- EBOS shares fell due to weaker-than-expected FY25 results, the loss of a major $2B Chemist Warehouse contract, and a large shareholder (Sybos) offloading nearly 13% of the company.
- Market confidence has also been dented by falling profits, margin pressure, and softer earnings guidance for FY26.
We have no interest in EBOS at this stage of the cycle.
