SIGMA Healthcare yesterday reported a 33% decline in net profit after tax, with the overall result hit by over $13 million in restructuring costs (PD breaking news).
In community pharmacy, Sigma said its brands "continue to perform well in a competitive market," with like-for-like sales up almost 1% and Amcal and Discount Drug Stores "excelling".
"This is testament to the strong focus on professional service programs and service delivery brand members commit to deliver as part of these brand promises," said CEO Mark Hooper.
Reported EBITDA was $76.5 million, down 17.5%, while the net after-tax profit was $37 million for the 12 months to 31 Jan 2019.
Hooper focused on the Business Transformation program (Project Pivot) which he said was underway "following the completion of the initial diagnostic review by Accenture which identified over $100 million in efficiency gains over the next two years".
The program is intended to restructure Sigma's operations to become more efficient, creating "greater capacity for growth following the end of the contract with MyChemist/Chemist Warehouse" in Jun this year.
"The recent events have provided the catalyst for us to undertake a detailed review of our operations to ensure we have a sustainable business operating efficiently, but importantly one that adopts a growth mindset to capture the emerging opportunities we see for the business," he said.
"We continue to have a strong balance sheet and are well advanced in our program of capital investment in automated distribution centres, technology and processes that gives us the capacity and capability to execute our strategies," Hooper added.
He confirmed that distribution centres in Shepparton, Newcastle and Launceston would be closed down in the second half of 2019.
Hospital sales have increased by 20% during the period, growing market share to almost 9%, the company said.
Hooper concluded his summary confirming guidance of $55-60 million EBITDA for FY20.
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