Sigma profit declines 38%
September 12, 2013
SIGMA Pharmaceuticals this
morning announced its results
for the six months to 31 July, with
the overall outcome significantly
impacted by a provision for
doubtful debts in relation to the
Harrisons pharmacy group which
went into administration earlier in
the year (PD 05 Apr).
Overall sales revenue was up 3.1%
to $1.46 billion, and the after-tax
profit result was $16.3 million, down
37.6% on the $26.1m figure for the
corresponding period in 2012.
“Sigma has delivered a solid
performance in a difficult trading
environment with PBS growth
virtually non-existent and retail
conditions subdued,” according to
ceo and md Mark Hooper.
The report estimates PBS growth
for the period at 2%, and “allowing
for the impact of the further PBS
price reforms implemented since
the prior comparable period, the
sales revenue increase would have
been 6%”.
Sigma has expensed $4.06 million
in relation to the Harrisons collapse
which is based on the “current
estimated recovery from Sigma’s
claim for inventory on hand but
unpaid at the time receivers were
appointed”.
The result was also hit by a $3.68
million expense relating to the
settlement of litigation with Vifor in
connection with Sigma’s injectable
iron product, Ferrosig.
Sigma confirmed that following
the settlement it had retained the
rights to sell the Ferrosig product in
the Australian market.
Hooper said the company had
reaffirmed its commitment to
reinvesting in its business, as it
heads into “what is expected to be
a stronger second half.
“This investment will strengthen
core efficiency, while providing
improved support for its pharmacy
customers in an ever challenging
landscape,” he said.
Hooper also confirmed the
ongoing expansion of Sigma’s
private and exclusive range, with a
doubling of the number of products
in the pipeline.
He said despite the environment
Sigma had undertaken a number of
important initiatives to grow sales,
including the “industry leading
Amcal and Guardian e-commerce
platforms” which launched in the
last few months (PD 10 Jul).
Chairman Brian Jamieson said the
company had enhanced its market
share, “which is a strategically
important outcome given the flat
PBS growth confronting the whole
industry”.
The company said it would be
looking to the new government
to provide greater certainty in the
sector, including timely consultation
on industry issues, strengthening
of the CSO and limiting further
changes to the PBS.
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