Sigma Healthcare shares gain on FY25 profit lift, synergy upgrade
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More news: Sigma Healthcare shares lifted in afternoon trade after the company posted its first full-year result after merging with Chemist Warehouse and upgraded its target synergy benefits.
At 12:57pm AEST, shares in Sigma Healthcare had lifted 5.3% to $2.97.
Jarden analysts said that “on first glance the result looks clean, in line and of good quality, with the trading update better and synergy upgrade a positive” in addition to some working capital upside expected in FY26.
The analysts also flagged that the only negative they see is the management changes, but it appears “orderly and should be a well managed process”.
Sigma Healthcare posts $530m profit, CFO to step down
The news: Sigma Healthcare has delivered full-year statutory net profit after tax of $529.9 million as the pharmaceutical wholesaler, distributor and retail store operator posted its first end of financial year earnings result since merging with Chemist Warehouse in February.
The combined entities' synergy target has also been upgrade to $100 million per annum over the next four years, up from $60 million. The bulk is expected to be realised in FY27 and beyond.
Sigma also announced several senior management moves, including that group CFO Mark Davis intends to step down to "pursue a range of personal commercial interests". He will remain with the company until a replacement is found.
The numbers: The full-year statutory net profit is 2.1% lower than what was delivered by the standalone Chemist Warehouse in FY24 amid integration and merger related costs worth $12.7 million and $46.6 million respectively.
The FY25 profit figure is also behind the market consensus estimate of $548.8 million, according to Visible Alpha.
However, it is higher than the $522.3 million pro forma FY24 figure for the merged group outlined in a prospectus released to the exchange on 10 February.
The Chemist Warehouse retail network has meanwhile seen sales growth of 14% to $10.3 billion and 11.3% growth in like-for-like sales across the Australian retail network in FY25.
Statutory revenue came in at $6.00 billion, which is below the $6.66 billion pro forma FY24 figure. It is also behind the market consensus estimate of $6.70 billion.
A final fully franked dividend of 1.3 cents per share was declared, ahead of the market consensus estimate of 1.0 cent per share.
To achieve the improved synergy target, Sigma anticipates one-off costs in the range of $95 million and $105 million, up from $75 million.
The company noted that it has started FY26 with "double digit like-for-like retail network sales growth year to date" and expects to continuing rolling out Chemist Warehouse stores locally and internationally in line with historical rates.
The context: In addition to the departure of Davies, chief strategy and business development officer Damien Gance will also step down on 1 September. Gance will remain on the board as a non-executive director.
Pre-merger Sigma CFO Mark Conway has been appointed to the chief strategy and business development officer roles. Meanwhile, Chemist Warehouse Group chief operations officer Mario Tascone has been appointed deputy CEO of retail.
As a result of the merger, the financial statement issued under Sigma Healthcare is presented as Chemist Warehouse Group’s continuing financial statements at historical cost with the pre-merger Sigma’s financials included at fair value as of the date of the deal’s legal completion in February.
