Sigma Phamaceuticals first-half profit jumps 26pc

Sigma shares shot up after it exceeded expectations with a 26 per cent jump in half-year profit.

Mark Hooper, CEO of Sigma Pharmaceuticals. Pic: Stuart McEvoy

Sigma Pharmaceuticals has raised its full-year guidance after its pharmacy network outperformed expectations in the first half.

The pharmacy wholesale and distribution business (SIP) said its net profit jumped 26.4 per cent to $23.9 million for the six months to July 31.

Its pre-tax earnings lifted 15.5 per cent to $37.3m, while underlying earnings before interest and tax leapt 17 per cent to $48.4m.

The numbers compared favourably to the revised guidance of 10 per cent growth detailed in May and helped drive a strong bid on the group’s shares this morning.

At 10.45am (AEST), Sigma shares shot up 15 per cent to $1.33, against a broader market fall of 1 per cent.

“The momentum that built through the half has exceeded expectations,” Sigma chief executive Mark Hooper said.

“The growth has been sustained and has been delivered across the board, from both market share growth and other general services income growth.”

Sigma detailed a 28.1 per cent surge in revenue for the half to $2.15 billion, driven by the Pharmaceutical Benefits Scheme listing of hepatitis C medications.

Excluding the boost from hep C medications, sales climbed 7.8 per cent with half the growth from non-PBS revenue, while like-for-like sales across its pharmacy brands such as Amcal and Guardian advanced 7.2 per cent.

The pharmacy giant raised its full-year guidance as a result of the better-than-expected first half showing, saying it now expected pre-tax earnings to rise 10 per cent.

The group had previously outlined a more modest expectation of “at least 5 per cent” growth.

“We are really pleased with how the business is now positioned,” Mr Hooper said.

“We have diversified our earnings away from PBS, which has also shifted our earnings mix between first and second half earnings contributions.”

Sigma declared an interim dividend of 2.5c a share, up 25 per cent on last year.