Higher sales of RATs (Rapid Antigen Tests) has seen pharmaceuticals wholesaler Sigma Healthcare upgrade its January 31 financial year earnings.
The news saw the shares jump more 4% at one stage to 52.5 cents but subsequently los those gains to end the session down 2% at 49 cents.
The company told the ASX that demand for COVID rapid tests had improved financial performance and underlying earnings will now be up by 10% to 15% compared with last year.
Sigma had previously been guiding to a decline in earnings of about 10% for the year to January.
“The improved financial performance primarily reflects the rapidly evolving Covid-19 environment and the sudden increased demand for Rapid Antigen Tests (RATs) as a diagnostic tool, which resulted in significant volume growth in the month leading up to our 31 January 2022 financial year close,” the company told investors.
Sigma said it is still expecting a bottom-line loss of between $5 million and $10 million for the year, due to the change in accounting requirements for software as a service (SaaS) products.
“With much of our investment in infrastructure and transformation close to completion, and to simplify our ongoing financial reporting, Sigma intends to shift the focus from Underlying EBITDA (adjusting for one-off business and accounting impacts) to Reported NPAT.
“Reported NPAT is expected to be a loss of $5m to $10m for the year, largely impacted by the SaaS accounting policy change (in excess of $30m) in the current year.
“The improved position as a result of the increased demand for RATs has also been partially offset by other costs associated with the implementation of our ERP solution and related business disruption and the impact of the closure of our Rowville Distribution Centre in late January.
Sigma’s full year results are scheduled for announcement on March 29.
