EBOS Group: managers hold through a guidance miss and CEO transition
A weaker-than-expected FY25 result under new CEO Adam Hall knocked EBOS Group shares down sharply, but the fund managers who cover it have largely stayed the course, betting on structural growth in healthcare and animal health distribution.
30 Apr 2026 · 5 min read
In short
EBOS Group fell around 27% after its FY25 result missed underlying EBITDA expectations by 5%, with Airlie Funds Management attributing the miss to softer Community Pharmacy margins and cyclical pressure on post-pandemic Animal Care sales.
Yarra Capital Management has held an overweight position throughout the volatility, citing attractive compounding structural growth in EBOS's key healthcare and animal health categories and the ability to redeploy free cash flow into acquisitions.
Mint Asset Management added to its EBOS position on weakness in March 2026 after initially flagging concerns about new CEO Adam Hall, saying it does not view the FY25 profit downgrade as terminal.
Fund managers covering EBOS Group Ltd (ASX: EBO) have spent the past year working through a leadership transition and a sharp earnings miss without abandoning the stock. The company's FY25 result, delivered under new CEO Adam Hall, came in well below expectations, and Airlie Funds Management captured the scale of the disappointment bluntly, noting an underlying 2H25 EBITDA miss of 5% and lower-than-expected FY26 guidance.
An underlying 2H25 EBITDA miss of 5% and lower-than-expected FY26 EBITDA guidance reflected lower margins in Community Pharmacy (heightened competition) and cyclical pressure on Animal Care sales (post-covid pet boom)... Overall, EBOS remains a high-quality operation trading at a market multiple, and we remain comfortable with our holding.
Airlie Funds Management, Monthly Report, September 2025
A new CEO absorbs the blame, fairly or not
Mint Asset Management offered the most candid account of the leadership dynamics at play. The fund said it did not blame the poor share price performance since results on new CEO Adam Hall, but acknowledged it had been worried for some time about EBOS losing the Chemist Warehouse contract, and had underestimated the additional lease costs coming onto the profit and loss statement to support future growth. Yarra Capital Management, tracking the same result from both a monthly and quarterly lens, pointed to a material uplift in depreciation costs following an extensive capital reinvestment program as a further drag on net profit guidance, on top of the softer distribution margins and restructuring costs.
The structural growth case keeps managers holding
Despite the miss, the core investment thesis around EBOS has not shifted for its long-term holders. Yarra Capital Management has repeated, across both its August and September 2025 commentary, that it retained its modest position because the company "offers attractive, compounding structural growth in their key healthcare and animal health categories, along with the ability to redeploy free cash flow into adjacent acquisitions." Mint Asset Management went further in March 2026, adding to its position on weakness and framing the profit downgrade as "more an opportunity to continue to work with EBOS on improving its governance going forwards" rather than a terminal issue.
A second downgrade tests conviction further
The thesis was tested again in April 2026, when EBOS issued a further negative trading update indicating a 2% earnings downgrade tied to higher fuel and energy costs, particularly affecting the wholesale pharmacy division. Yarra Capital Management held its overweight rating through this update as well, arguing the defensive growth outlook for both health care and animal care remains intact, with further upside from continued bolt-on acquisitions, and pointing to an expected acceleration in EPS growth from FY28 onwards once the current period of elevated distribution-network reinvestment passes.
We remain positive on EBO given the defensive growth outlook for both health care and animal care with further upside from continued bolt on acquisitions. We expected EPS growth to accelerate from FY28 onwards... with valuation highly attractive at FY27 P/E of 14.3 times.
Yarra Capital Management, Monthly Report, April 2026
What managers are watching next
With the share price having fallen from around $29.85 in August 2025 to roughly $17.30 by April 2026, the debate among EBOS holders has narrowed to a single question: whether the current reinvestment cycle in distribution networks and the governance reset under Adam Hall can restore the structural growth trajectory managers like Yarra and Mint continue to back, or whether the Community Pharmacy and Animal Care margin pressures prove more persistent than the defensive growth narrative assumes.
Questions
Why did EBOS Group shares fall sharply in 2025?
EBOS Group's share price fell around 27% after its FY25 result missed underlying EBITDA expectations by 5%, with Airlie Funds Management attributing the miss to softer Community Pharmacy margins from heightened competition and cyclical pressure on Animal Care sales following the post-pandemic pet boom.
Are fund managers still positive on EBOS Group?
Yes. Yarra Capital Management has held an overweight position through multiple downgrades, citing attractive compounding structural growth in EBOS's healthcare and animal health categories, while Mint Asset Management added to its position on weakness in March 2026.
What caused EBOS Group's second earnings downgrade in 2026?
EBOS issued a trading update in April 2026 indicating a 2% earnings downgrade due to higher fuel and energy costs, which particularly affected the company's wholesale pharmacy division.
4 managers, 9 comments, with each manager's latest recorded position.
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