Sigma Healthcare financial performance announcement

Sigma Healthcare Limited (ASX:SIG) has reported its financial results for the half year ended 31 July 2024, demonstrating a 17.3% increase in normalised group revenue and a 13% like for like sales growth across its brands, Amcal and Discount Drug Stores. The company's strategic execution has led to the successful commencement of a new 5-year Chemist Warehouse Group (CWG) supply contract, contributing $3.0 billion in annualised revenue, with approximately $2.0 billion per annum in new revenue to Sigma as a result of the new PBS supply.

Executive Commentary on Financial Performance and Strategic Direction

Sigma CEO and Managing Director Vikesh Ramsunder highlighted the strategically important period for Sigma, emphasizing the commencement of the new supply contract that will underpin Sigma's growth for the next 5 years and provide strong fixed cost absorption. He also emphasized the company's ability to efficiently absorb the expected 40% increase in volume and maintain high service standards to all customers. Mr. Ramsunder further commented on the core business, stating that volume and efficiency are critical, and Sigma has delivered excellent service levels, streamlined operations, and built a growth pipeline.

Summary of Sigma Healthcare Financial Performance and Outlook

Sigma Healthcare's financial performance for the half year ended 31 July 2024 reflects a 17.3% increase in normalised group revenue, driven by the commencement of a new 5-year CWG supply contract. The company demonstrated its ability to cost-efficiently absorb the expected 40% increase in volume and reported a 13% like for like sales growth across its brands. The CEO's commentary emphasized the strategic importance of the new supply contract and the company's focus on maintaining high service standards, streamlined operations, and building a growth pipeline. Looking ahead, Sigma anticipates normalised EBIT guidance of $50 to $60 million for the full year, with approximately 35% available capacity in wholesale to absorb future growth ambitions without major capital investment. The company is also in advanced negotiations for a new industry funding agreement and continues to cooperate closely with the ACCC regarding the proposed merger with CWG. Sigma has declared an interim unfranked dividend of $0.005 per share, consistent with its Dividend policy.