Pharmacy Daily | Sigma Healthcare back in the black

SIGMA Healthcare this morning released its results for the 12 months to 31 Jan, noting "significant improvement across several key ares of the business".

The company made a $1.8 million net profit after tax, a turnaround from last year's $7.2 million loss, while net revenue rose 6.2% to $3.66 billion for the year and debt declined from $149m to $67m.

CEO Vikesh Ramsunder said Sigma is making progress in its ongoing transformation.

"We now have a much stronger operational platform to improve service delivery to customers, which underpins our pursuit of growth opportunities and will incrementally deliver improved financial outcomes for shareholders," he promised.

Wholesale pharmacy sales revenue rose 2.2% to about $3 billion, benefiting from strong demand for RAT tests in the first half of the year, as well as strong sales of high-cost COVID anti-viral medications during the year.

However operational challenges triggered by the implementation of a company-wide IT platform led to increased costs and a 2% loss in market share, Ramsunder said.

There was a standout performance for the MPS Connect medication packaging services business, which achieved 45% growth in corporate aged care facility business and 17.5% growth in patient numbers for the year.

Ramsunder said Sigma's new retail pharmacy strategy, which sees it move from five franchise brands to just Amcal and Discount Drug Stores (PD 27 Sep), will "provide critical mass to drive customer engagement and support our longer-term strategy".

"The merger of our Guardian brand is on track to achieve our targets, with around 50% of our identified members already committing to convert," he said.

"In parallel, we are rebuilding our internal capability to ensure we have the required skillset to support brand members, grow our private and exclusive label range, and pursue sustainable and profitable growth".

The recent $44 million sale of the CHS hospital distribution business (PD 10 Mar) will improve performance, with Ramsunder saying that while it delivered about $364 million in sales during the year "due to structural margins in this sector it was not profitable".

The Sigma CEO said that while the company is expecting some level of disruption in the coming year as the brand consolidation and business simplification strategy is implemented, "we are however in a much better place to implement our strategy, win back customers and deliver an improved financial performance".

He is forecasting reported earnings of $26 million to $31 million in the current year, with Sigma declaring an interim fully franked dividend of 0.5c per share.