Sigma Healthcare shares took the loss of CEO Mark Hooper in their stride yesterday – they closed down 1.4% at 68 cents which wasn’t a bad effort given the surprise nature of the announcement and the lack of any real explanation except for the usually anodyne, ‘it was time’ for a change.
After 10 years in the job and hauling the company out of the mire a couple of times, a new challenge would seem pretty small.
Mr Hooper started in the role in 2010 after Sigma ran into various problems and has overseen a large restructure and cost-cutting program, called Project Pivot.
He was there for the surprise loss of its supply agreement with Chemist Warehouse and then did an equally surprising new deal to replace that lost revenue with Chemist Warehouse covering fast moving consumer products in 2019.
So all in all the company has survived and is probably stronger than it was a decade ago.
Sigma is still a major player in the pharmacy business, along with API and indirectly, Washington Soul Pattinson (which owns a stake in API).
Ebos, the NZ based pharmacy supply (Symbion) and petfood giant is a big player in the distribution sector as well.
Sigma owns a range of pharmacy brands including Amcal and Guardian as well as operating a wholesale business which supplies fast moving consumer goods to the likes of Chemist Warehouse along with a growing business supplying hospitals.
Sigma chair Ray Gunston said on Monday he had regrettably accepted Mr Hooper’s resignation, saying the company understood his desire to pursue other opportunities after a decade.
Mr Hooper said in Monday’s statement that he’d made the decision because “the business is now in great shape” and it was an ideal time to hand leadership over to a new CEO.
A month ago Mr Hopper revealed that Sigma was returning to paying dividends for the first time since late 2019 after beating its owned higher guidance for the year to the end of January.
Sigma Healthcare reported a $59 million net profit after tax for the year to January, much better than the $12.3 million loss for 2019-20.
The chemist retailer, distributor and medicines producer reported underlying earnings of $81.1 million, ahead of the $80 million the company was forecasting at the start of this year.
As an essential service, the company said it was able to continue operations through lockdowns without JobKeeper and even saw like-for-like growth of 9% across its key pharmacy brands.
Revenues rose 4.8% to $3.4 billion for the year to January.
The company said it had lifted sales into hospitals by 15% over the past year, taking advantage of a medical consumables acquisition to sell more PPE across the country during the peak of demand in the lockdowns in 2020.
In his statement in late March, Hooper said “Having targeted $100m Underlying EBITDA by FY23, we now approach that milestone with far greater confidence.
“We also sharpen our focus on business development to accelerate our expansion businesses, including in the medical consumables and devices space,” he added.
Not a hint of any desire to exit his role.
