Drugs distributor and pharmacy owner Sigma Pharmaceuticals says its earnings are likely to be dragged down by its spending on initiatives such as setting up online shopping.
The owner of the Amcal, Amcal Max, and Guardian pharmacy brands said costs from investing in key areas of its business will cause its earnings for the first half of fiscal 2014 to be lower than in the same period last year.
The first half of the company's fiscal year ends on July 31.
One of the key investment areas has been what the company calls its "multi-channel" retail strategy, which allows customers to shop online with in-store pick up or home delivery.
Sales in the first six months of its fiscal 2014 were stronger than in the same period of 2013, which has strengthened its gross profit for the period, Sigma said.
But the company has also flagged some significant financial items that are set to be included in its financial results for the full year.
Sigma expects to take a charge of about $4 million after legal proceedings related to one of its products were recently settled.
The placement of one of Sigma's customers, Harrisons Group, into receivership is also set to cost the company.
The full amounts owed to Sigma by Harrisons is unlikely to be fully recovered, and Sigma's provision for bad and doubtful debts will increase once the matter is finalised, it said.
excluding those items, Sigma expects its full year underlying earnings to increase from the previous year.
Its shares dropped 4.5 cents, or six per cent, to 70 cents.
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