Sigma net profit drops 10.5%

Sales revenue was “heavily impacted” this year by a decline in the sales of low-margin hep C medicines

Sigma Healthcare has reported a difficult financial year, but says it will continue to reinvest in the business and reward shareholders.

While reported earnings before interest and tax was up 3.4% to $83.7 million, underlying EBIT fell by 10%.

Reported net profit gained 3.5% to $55 million over the year.

However the overall underlying net profit after tax declined 10.5% to $59.9 million.

Full-year revenue was $4.13 billion, down 5.4% in the period ending 31 January.

Sales revenue was heavily impacted this year by the expected decline in sales of low-margin hepatitis C medicines, says Sigma.

“Adjusting for hepatitis C, sales revenue was broadly flat, which is a relatively good outcome against the backdrop of the exit of a large co-branded customer group in Queensland and general softer consumer sentiment.”

Despite challenges in the 2018 financial year, Sigma says it remains “well positioned” to capture benefits of its strategic investments in the years to come.

“This is an important turning point for Sigma,” says Sigma CEO and Managing Director Mark Hooper.

“Today’s result is in line with guidance. We are working harder than ever to ensure we can grow and diversify our earnings, improve customer service and keep a close eye on costs.

“We are also very focused on being more aggressive on an M&A front,” he says.

Sigma points to positive growth in its recent acquisition of Medical Packaging Systems (MPS), which provides dose administration aid services, as well the national expansion of the Sigma Hospital Services business.

“Sigma’s retail brands [also] continue to invest in ways to improve workflows and upskill the pharmacist to allow them more time assisting customers as well as growing revenues,” it says in a statement.

“The LEAPP Dispensary Excellence Program unveiled to support Amcal and Guardian pharmacies is industry leading and has been very well received by participating members.

“Participants through the program have recorded trading growth that is outperforming the market.

“We continue to see good momentum in our Hospital Services business, and the acquisition of the MPS business provides great leverage opportunities. Concerted efforts continue in order to restore our core pharmacy sales pipeline, with this also likely to benefit future earnings,” Mr Hooper says.

Sigma underlined its commitment to shareholders, who will still be rewarded with a final dividend of 2.5 cents per share, says Sigma.

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1 Comment

  1. Ex-Pharmacist

    C’mon CWH, buy ’em out already and totally control your backend supply.

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