Sigma Pharmaceuticals lifted final dividend 50%, from 2 cents to 3 cents a share, despite warning of slowing earnings growth over the next two years.
That took the full year payout to five cents a share.
The company, which owns the Amcal and Chemist King chains, told the ASX yesterday that earnings fell 4.3% to $50.5 million for the year to January because of higher costs involved with the purchase of Central health Services and Discount Drug Store.
Sigma said underlying earnings before interest and tax were up 13.7% to $89.1 million for the year ended January 31, thanks contributions from the acquisitions of Central Health Services and Discount Drug Store in 2014. Both companies did better than forecast, which meant Sigma had to pay more for the businesses under accounting rules. Stripping out the acquisition benefits, underlying EBIT growth would have been around 7%, CEO, Mark Hooper said yesterday.
Sigma is working to reduce its dependence on government-regulated business and that will see forecast annual underlying earnings before interest and tax growth of at least 5% for the next two years.
The company wants to increase its non-Pharmaceuticals Benefits Scheme (PBS) revenue and earnings, with higher income from over-the-counter drugs and products, specialist services provided by pharmacists, and fees from marketing and promotion.
As well as being a pharmacy wholesale and distribution business, Sigma has the largest pharmacy network across Australia, with more than 1,200 branded and independent stores, including pharmacy retail brands: Amcal, Guardian, PharmaSave, Chemist King and Discount Drug Stores.
Annual revenue from continuing operations rose 10.2% to $3.46 billion over the year, driven by acquisitions and overall business growth.
Sigma said growth in non-PBS revenue rose by nearly 18% in the year and now accounts for more than 35% of total revenue, or well over $1 billion a year.
The group declared a fully franked final dividend of three cents a share, taking the total for the year to five cents a share. During the year the company bought back 14 million shares.
Sigma shares rose 3.5 cents, or 3.5% at $1.025.
