Sigma Healthcare has upgraded its synergy target regarding its merger with Chemist Warehouse after recording a strong boost in both its top and bottom line results last year.
The company now targets a merger synergy of $100 million per annum compared to the prior $60 million, and expects to achieve it within four years.
For the year ended June 30, revenue surged 82.2 per cent to $6 billion. At Chemist Warehouse, retail network sales rose 14 per cent and like-for-like sales across the Australian network were up 11.3 per cent.
During the year, the company expanded its portfolio of own and exclusive brand products, headlined by the launch of 269 products in the Wagner generics range in November. Sales of own brand and exclusive label products were up more than 20 per cent.
On the bottom line, statutory earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 33.6 per cent to $824 million and net profit after tax (NPAT) fell 2.1 per cent to $530 million. Normalised EBITDA increased 41.4 per cent to $884 million and NPAT rose 40.1 per cent to $579 million.
As of June 30, net debt was $752 million, well below the starting net debt range of $1 billion to $1.3 billion set out in the merger prospectus.
The merger with Chemist Warehouse has delivered a stronger, more integrated healthcare business, with greater scale, capability, and market reach,” said Vikesh Ramsunder, Sigma CEO and MD. “The FY25 results demonstrate the group’s momentum and potential for ongoing growth.”
For the new fiscal year, Sigma plans to roll out Chemist Warehouse stores at a “consistent cadence” in Australia and internationally, as well as launch new own and exclusive label products to drive margin improvement.
The company will close distribution centres in South Guildford, WA and Port Adelaide, SA, with services to be moved to existing centres in Canning Vale and Pooraka.
In addition, it will progressively close Chemist Warehouse brick-and-mortar stores in China over the next few years with an aim to deliver profitable growth. The Chinese market will be serviced through the online channel afterwards.
