Sigma Pharmaceuticals is committed to becoming less reliant on revenue from the Pharmaceutical Benefits Scheme (PBS) as it expands and improves its pharmacies.
Chief executive of the pharmacy support services provider and drug distributor, Mark Hooper, says government reforms to the PBS to make medicines cheaper continue to bite at Sigma's revenues.
"The PBS environment remains challenging, and the sixth Community Pharmacy Agreement (which determines how pharmaceutical wholesalers are reimbursed) is yet to be finalised," Mr Hooper said on Thursday.
"In this context, we are committed to our strategy of broadening our revenue base away from PBS revenue, supported by improvements in brand standards and increased returns from private and exclusive label products."
Mr Hooper said about one third of Sigma's revenue currently came from non-PBS-related sources and recent growth of four to five per cent per year in that area was expected to accelerate.
He said retail strategy was a key focus for Sigma, with emphasis on getting pharmacies under its various retail banners to provide a consistent range and standard of products and services.
Sigma has introduced into about 400 of the pharmacies under its banners a program where pharmacists can offer advice on matters such as quitting smoking, using respiratory devices for asthma, improving a patient's compliance with their medication regime, and blood pressure checks.
Mr Hooper said the response to the program from patients in the pharmacies had been fantastic.
"It really does depend on how much the pharmacists get behind the programs that we've launched," he said.
"We're still running a combination of full-blown and pilot programs."
Sigma on Thursday reported a 1.4 per cent fall in net profit for the year to January 31 to $52.77 million, from $53.54 million a year earlier.
But excluding a $10.9 million gain on the sale of land and buildings in fiscal 2014, and other one-off items, Sigma's underlying net profit rose to $53.08 million from $51.05 million.
Higher sales revenue - partly as a result of the acquisition of Central Healthcare Services and Discount Drug Stores - and cost controls helped lift earnings before interest and tax by 11 per cent to $78 million.
Sigma said it is well placed for the year ahead, with growth at the start of its fiscal year in line with the previous 12 months.
Sigma is Australia's largest full-line pharmaceutical wholesale and distribution business.
Sigma has more than 700 pharmacies under its banners, which include Amcal, Amcal Max, Guardian, PharmaSave, Chemist King and Discount Drugstores (DDS).
Sigma added 51 new Amcal and Guardian pharmacies over the last year.
It also services 500 pharmacies under a 10-year agreement with Pharmacy Alliance.
SIGMA LOOKING TO BOOST NON-PBS REVENUE
* Annual net profit of $52.77m, down 1.4pct, on $53.54m in 2013/14
* Sales revenue of $3.14b, up 5.7 pct, on $2.97b
* Final dividend of two cents per share, plus special dividend of one cent, compared to final dividend of two cents in 2014
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