Sigma Pharmaceuticals continued to make headway in its recovery from the near death experience in 2010.
The company yesterday revealed an improved interim net profit $26.7 million on the back of a greater market share and lower interest costs.
The result compares with the $9.2 million net loss for the first half of the previous financial year.
And, the Melbourne-based drugs distributor and pharmacy support services provider intends to pay a fully franked dividend of 1.5c subject to clarification of a draft Australian Tax Office fact sheet.
Earnings before interest and tax rose 55% to $38 million, which mainly reflected strong growth in underlying sales, the company said in yesterday’s statement.
Reported sales revenue was down 2.4% at $1.372 billion. That included the loss in its business distributing products on behalf of global pharmaceutical giant Pfizer – which represented 10-15% of Sigma’s revenue.
Excluding the impacts of Pfizer and sale of its manufacturing business to Aspen Asia Pacific, Sigma’s said sales were up 9% in comparison to PBS growth of 5% for the year ending June 30.
The company said the "above industry growth reflected market share gains, including our contract with the Pharmacy Alliance Group (including the Independent Pharmacists of Australia Group).
"Working capital initiatives have continued to reduce the level of trade receivables with DSO (Days Sales Outstanding) down 5 days from the FY11 year end. The cash conversion cycle for Sigma declined by 10 days to 64 days.
"Operating cash flows were strong at $105.9 million compared to $40.5 million in the prior corresponding period. The company is in a positive cash position at half year end.
"We are very pleased with the results which reflect the progress we have made to date in rebuilding Sigma," Mr Hooper said in a statement.
"While we acknowledge the progress we have made to date, there is still more to be done to ensure Sigma is well positioned to keep ahead of industry changes.
"Calendar year 2012 will be impacted by ongoing PBS reform and we must work to ensure we can sustain the positive momentum in this new industry environment.
"There has been improvement in all the key indicators we highlighted in the FY11 full year results briefing.
"Our focus will continue to be on profitable growth and improved working capital management to further enhance ROIC,” he said.
Chairman of the Board, Brian Jamieson, said, “The Board considered it appropriate to reinstate the dividend payment as confirmation of the significant progress the company has made.
"The outlook for continued positive momentum in Sigma’s performance supports the decision,” he said.
Sigma shares rose 9.4% or 6c to 58c.They were up 11% at one stage.
That was in the market off more than 1.5% or 66 points.
Perpetual Investments continues to see funds under management leach away under the impact of the weak financial markets and investors taking their money elsewhere.
The company told the ASX yesterday that funds under management at the end of August were $24.2 billion, down 5.1% from the $25.4 billion at the end of July and 11% from the $27.2 billion at the end of June.
Funds under management at the end of June were the same as in August of last year – $27.2 billion.
At August 31, 2009, Perpetual had $28.4 billion under management.
The company attributed the decline in August to: around $367 million due to the decline in equity markets; $195 million due to outflows in the cash asset class from the institutional segment; and $282 million due to outflows in the concentrated equities asset class from the institutional segment.
Perpetual shares eased 3.5% or 79c to $21.50.
