Sigma Healthcare (SIG) H2 2024 earnings summary

Executive summary

• FY24 revenue fell 9.2%, while statutory EBIT rose 20.4% and attributable NPAT rose 148.9%; excluding merger costs, NPAT was $12.7m.

• Simplification and lower costs supported productivity and cash flow, with customer service levels above 99%; year-end net cash was $356.5m after the equity raise and debt repayment.

Financial highlights

• Revenue was $3,322.1m, down 9.2%; gross profit fell 14.3% to $218.1m, reflecting prior-year RAT sales and the hospital distribution disposal.

• Operating costs declined 10.7% to $261.8m, including $8.2m of merger transaction costs; EBITDA was $51.53m, up 3.9%.

• Statutory EBIT was $23.2m, up 20.4%, and attributable NPAT was $4.5m, up 148.9%; excluding merger costs, EBIT was $31.4m, up 62.7%, and NPAT was $12.7m.

• Operating cash flow was $42.0m versus $136.0m; lower cash conversion reflected FY23 high-margin RAT sales, while lower inventory supported FY24 cash generation.

Outlook and guidance

• YTD sales were up 6.6%; the standalone medium-term EBIT margin target was reaffirmed at 1.5%–2.5%.

• The five-year Chemist Warehouse supply contract is scheduled to start 1 July 2024, adding more than $2.0bn in annualised revenue; onboarding plans are on track.

• Priorities include contract onboarding, cost efficiencies, retail and private-label execution, and finalising wholesaler funding agreements; FY25 private and exclusive label sales growth target is 50%.

• Capital spending is expected to remain in the $5m–$10m range following completion of the major capex program.