Chemist Warehouse has posted a spike in half-year profits as Sigma Healthcare, the wholesaler and distribution company it hopes to merge with to create an $8.8 business, moves to hose down the concerns of its pharmacy customers about the implications of the proposed merger.
Sigma’s full-year results unveiled on Thursday included details of Chemist Warehouse’s figures for the first half of fiscal 2024, including a 28.6 per cent lift in statutory profits before tax and a 13.5 per cent jump in total network sales to $4.56 billion.
Sigma’s full-year results provided a glimpse of Chemist Warehouse’s numbers.Credit: Eamon Gallagher
Meanwhile, Sigma’s revenue for the 2023 financial year slid 9.2 per cent to $3.3 billion, but statutory earnings jumped 20.4 per cent to $23.2 million and net profit more than doubled to $4.5 million after merger costs of $8.2 million were absorbed and as operating costs declined 10.7 per cent.
Sigma chief executive Vikesh Ramsunder said the proposed merger would not undercut its existing customer base of more than 1200 pharmacies, 400 of which operate under the Amcal, Discount Drug Store, Guardian and PharmaSave brands.
“What we’ve managed to do for the bulk of our customers is convince them not to panic and make a decision without letting reality unfold. We are very clear that we will service all our customers in an equitable manner,” Ramsunder said.
Vikesh Ramsunder would remain CEO of Sigma Healthcare while Mario Verrocchi will run Chemist Warehouse if the merger proceeds.Credit: Eamon Gallagher
He admitted that a “very small number” of customers had cut ties with Sigma after the merger was announced but also pointed out that Sigma had signed up new customers, resulting in a “net neutral” balance of customers.
“We’ve treated this as business as usual. And obviously a healthiest, strongest Sigma is better for all our customers. We have greater availability of stock that’s there for them, scale gives us efficiency. So in fact, this helps our customer service levels into the future.”
“If you look at the facts, even when you merge with Chemist Warehouse, if the regulators approve that, it doesn’t change the way you operate as a wholesaler,” he added.
Source Agencies
