Sigma pharmacy brands surge 12%
PHARMACEUTICAL wholesaler, Sigma Healthcare, is reporting a strong start to 2020, with the company’s retail pharmacy brands delivering like-for-like growth of 11.7% over the last financial year.
Speaking at the Sigma Annual General Meeting yesterday, outgoing Chairman, Brian Jamieson, reflected on the events of the last 12 months, which have seen a major transformation program, the launch of three new distribution centres, the end of the Chemist Warehouse supply agreement, before winning back part of the business, the bushfires earlier this year, as well as the successful defence against a takeover offer from Australian Pharmaceutical Industries (API).
“I am incredibly proud of the way that the Sigma management team and all team members have embraced everything that has been thrown at them this year,” he said.
Jamieson, who also stepped down and handed the reins to
Ray Gunston yesterday, noted that the retail brands including Amcal, Guardian, Discount Drug Stores, Pharmasave, Chemist King and Whole Life Pharmacy were growing significantly faster than the market.
“Around 20% of consumer spend in pharmacy is in one of those brands,” he said, adding that sales to hospital pharmacy also soared 26% “as we continue to extend our reach in this market”.
CEO, Mark Hooper, gave an update on the Seventh Community Pharmacy Agreement (7CPA) and the Community Service Obligation which helps fund wholesale distribution of Pharmaceutical Benefits Scheme (PBS) medicines.
“Engagement with the Health Minister and the Department of Health has been positive,” he said.
“Whilst I cannot comment specifically due to confidentiality constraints, I am encouraged that there is a broad understanding that after years of declining returns, investment in this critical sector is needed to ensure it can continue to serve the community needs for equitable access.”
Hooper added that Sigma’s wholesale business had experienced an “extraordinary start to the year,” accelerated by demand growth driven by the COVID-19 pandemic.
Volume, excluding Chemist Warehouse FMCG items, was up an average of 70% in Mar, with Sigma’s revamped distribution facilities providing sufficient capacity to handle the surge.
Sigma has suspended its dividend payment and due to the current uncertainty is not providing earnings guidance, but Hooper said “the combination of the actions we have taken, such as the efficiencies from Project Pivot, our distribution centre investments, our various sales programs, and our expanding third party logistics and medical consumables businesses has already produced a strong platform for earnings growth”.