Sigma Healthcare

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Sigma Healthcare Limited
Company type Public
ASX:  SIG
IndustryPharmaceuticals
Founded1912 in Melbourne, Australia
Headquarters Clayton, Victoria, Australia
Area served
Australia
Key people
Michael Sammells (Chairman)
Vikesh Ramsunder (CEO & Managing Director)
ProductsPrescription, over-the-counter and generic pharmaceutical products
RevenueIncrease2.svgA$3.66 billion (2023)
Increase2.svgA$49.6 million (2023)
Number of employees
1200
Subsidiaries Amcal
Discount Drug Stores
Pharmasave Australia
Guardian Pharmacy
Central Healthcare Services
MPS
NostraData Pty Ltd (51% owned)
Website sigmahealthcare.com.au

Sigma Healthcare Limited is an Australian, ASX-listed company with a focus on the pharmacy industry. [1] The company has pharmacy operations in retail, wholesale and distribution. From its head office in Clayton, Victoria, Sigma manages over 1,200 branded and independent pharmacies. Sigma Healthcare owns Australian retail pharmacy brands: Amcal, Discount Drug Stores and Guardian Pharmacy. The company also has a presence in the hospital pharmacy services, contract logistics, dose administration aids and other healthcare service adjacencies.

Contents

History

Sigma Co. Ltd was established in Melbourne in 1912, by Ernest Leete and Thomas Church, with the endorsement of the South Suburban Chemists’ Association. The impetus for such a move was driven by the high costs of wholesale drugs and medicines at the time, and Leete and Church set about manufacturing their own products for sale exclusively by members of the association. Established as a company to be funded by member subscriptions, initial interest from pharmacists was lukewarm, however Leete and Church persisted with their manufacturing plans. By the end of the first year however, the venture had attracted over two hundred subscribers, who agreed to the formation of a company owned by shareholders.

Sigma Company Limited was formally registered on 13 October 1913.

Over the course of the next 80 years, Sigma continued to expand its operations and develop into new markets, including exports into the Asia-Pacific and the Middle East. By 1992, Sigma owned assets of $180 million, saw group sales turnover of $600 million and employed more than a thousand people. [2]

By the end of the 20th century, Sigma had purchased the Guardian and Amcal retail pharmacy brands, and in 1999 listed on the Australian Stock Exchange as Sigma Pharmaceuticals Limited.

On 3 May 2017, Sigma board of directors and shareholders voted on a change of name to Sigma Healthcare Limited. The now-publicly listed company also changed its ASX ticker from SIP to SIG at this time. [3]

In December 2023, Chemist Warehouse Group announced its intention to merge with Sigma Healthcare through a reverse takeover. [4]

Mergers and acquisitions

In 2010, Sigma Pharmaceutical restructured and sold its generic drug manufacturing business to South Africa’s Aspen Pharmacare for AUD$804 million, ending an almost 100-year legacy in the manufacturing field for the company. The pharmaceuticals division included generic brands, over-the-counter medications, its Herron brand, ethical products, medical products and the manufacturing businesses. [5]

In March 2014, Sigma acquired the healthcare product wholesaler and distributor Central Healthcare Services in a deal worth $24.5 million. [6]

In September 2014, the company bought the Queensland-based Discount Drug Store (DDS) banner for $26.7 million. [7] The DDS acquisition was set to add 120 pharmacies under that brand to the Sigma network.

In 2017, partly in response to Australian Government changes pharmacists’ payments under the Pharmaceutical Benefits Scheme, Sigma diversified further, acquiring Medication Packaging Systems (MPS), Australia's largest provider of dose administration services to the aged care sector and community pharmacy patients.

During the 2020 COVID-19 pandemic, Sigma announced that it had sold the land and buildings of its distribution centres in Queensland and New South Wales, under an agreement to lease the facilities back from the new owners for an initial term of 15 years. [8]

The following year, Sigma launched a bid for Australian Pharmaceutical Industries, which owned a number of rival retail pharmacy brands including Priceline, Pharmacist Advice and Soul Pattinson Chemists. [9] The proposed merger, valued at AUD$773.5 million, was however withdrawn on 5 October 2021, [10] with Australian retail conglomerate Wesfarmers, announcing its purchase of 19.3% of API’s shares of API two days later. [11] On 11 February 2022, the ACCC announced that it will not oppose the proposed acquisition of API by Wesfarmers. [12]

In September 2022 Sigma announced that it planned to consolidate its retail brands and focus franchise growth under the Amcal and Discount Drug Store brands. [13]

Financial performance

The Group reported net profit after tax (NPAT) attributable to owners of the company for the year ended 31 January 2021 of $59,761,000 which was up $72,091,000 from the prior period ($12,330,000 loss). Reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $94,198,000 was up 289.2% on the prior period ($24,200,000). [14]

Controversies

In 2010, Sigma shares were placed in a trading halt on the Australian Stock Exchange – initially due to a profit warning. [15] Since then, allegations of accounting irregularities [16] and preferential deals negotiated with certain pharmacy chains (at the expense of smaller independent chemists) that left Sigma losing money at the expense of their own Amcal and Guardian Pharmacies banners [17] and forsaking cashflow emerged. [18] The trading halt was lifted later that year. The events resulted in the initiation of a shareholder class action before the Federal Court of Australia.

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References

  1. ↑ "Sigma Healthcare Limited". ASX. Australian Stock Exchange. Retrieved 6 September 2022.
  2. ↑ "Sigma Healthcare Limited". DnB. 31 January 2021. Retrieved 15 March 2022.
  3. ↑ "Introducing Sigma Healthcare limited". ASX. Retrieved 3 May 2017.
  4. ↑ Rose, Derek (11 December 2023). "Chemist Warehouse to land on ASX via merger with Sigma". The New Daily. Retrieved 11 December 2023.
  5. ↑ "Sigma offloads drugs arm for $900m". SMH. 16 August 2010. Retrieved 16 March 2022.
  6. ↑ "Sigma Healthcare seeks more acquisitions". Nine. 31 March 2014. Retrieved 16 March 2022.
  7. ↑ "Sigma extends retail brands with DDS acquisition for $26.7 mn". Sydney Sun. 8 September 2014. Retrieved 8 September 2014.
  8. ↑ "Sigma boss urges consultation over lockdowns, eyes opportunities". SMH. 10 August 2020. Retrieved 16 March 2022.
  9. ↑ "Sigma launches rival bid". ABC News. ABC. 27 September 2021. Retrieved 16 March 2022.
  10. ↑ "Sigma drops bid for rival API, leaving Wesfarmers to take control". Australian Financial Review. AFR. 5 November 2020. Retrieved 16 March 2022.
  11. ↑ "Australia's Wesfarmers moves to block Sigma attempt to buy API". Reuters. Reuters. 6 October 2021. Retrieved 16 March 2022.
  12. ↑ "Wesfarmers' proposed acquisition of API not opposed". ACCC. Retrieved 16 March 2022.
  13. ↑ "Amcal and Guardian to Join Forces". Retail Pharmacy. Retail Media. 27 September 2022. Retrieved 25 November 2022.
  14. ↑ "Positioned for sustainable growth". investorcentre.sigmahealthcare.com.au. Retrieved 25 May 2023.
  15. ↑ Greenblat, Eli (7 April 2010). "ASX slaps Sigma with 'please explain' order". The Sydney Morning Herald. Retrieved 15 December 2020.
  16. ↑ Symons, David (25 March 2010). "Subdued Seven eyes licence fee rebates". The Age.
  17. ↑ "The Australian". Archived from the original on 21 June 2014. Retrieved 17 January 2013.
  18. ↑ Symons, David (3 March 2010). "Picture looks bleak for Telstra". The Sydney Morning Herald.
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