The owner of Amcal and Chemist King expects underlying earnings growth to slow over the next two years as Australia's biggest branded pharmacy company delivered mixed annual results.
Sigma Pharmaceuticals - which is working to reduce its dependence on government-regulated business - on Wednesday forecast annual underlying earnings before interest and tax growth of at least five per cent for the next two years.
That compares with 13.7 growth in underlying EBIT of $89.1 million for the year ended January 31, thanks to gains from its acquisitions of Central Health Services and Discount Drug Store in 2014.
Stripping out the acquisition benefits, underlying EBIT growth would have been around seven per cent, chief executive Mark Hooper said.
Sigma's management has focused on increasing the group's non-Pharmaceuticals Benefits Scheme (PBS) revenue and earnings, including income from over-the-counter drugs and products, specialist services provided by pharmacists, and fees from marketing and promotion.
The company also was looking at more acquisitions to complement its operations, but nothing was close to being announced, Mr Hooper said.
As well as being a pharmacy wholesale and distribution business, Sigma has the largest pharmacy network across Australia, with more than 1,200 branded and independent stores, including pharmacy retail brands: Amcal, Guardian, PharmaSave, Chemist King and Discount Drug Stores.
Sigma posted a 4.3 per cent fall in annual net profit to $50.5 million, from $52.8 million, because it had to stump up more money for its acquisitions of Central Health Services and Discount Drug Store.
The two businesses exceeded expectations and, as a result, Sigma has had to pay more for the businesses under accounting rules.
Annual revenue from continuing operations rose 10.2 per cent to $3.46 billion, driven by acquisitions and overall business growth.
Sigma said growth in non-PBS revenue was the standout, up 17.8 per cent. Non-PBS revenue now accounts for more than 35 per cent of total revenue.
The group declared a fully franked final dividend of three cents a share, taking the total for the year to five cents a share.
Sigma shares were up 3.5 cents, or 3.54 per cent, at $1.025 in a lower Australian market.
SIGMA POSTS MIXED ANNUAL RESULTS
*Net profit fell 4.3pct to $50.5m vs $52.8m
*Revenue rose 10.2pct to $3.46b vs $3.14b
*Final dividend rose to 3c vs 2c
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