Sigma Healthcare Limited (ASX:SIG) is a leading Australian healthcare company specialising in pharmaceutical wholesale, distribution, and retail franchising. Operating brands such as Amcal, Discount Drug Stores, and, following its recent merger, Chemist Warehouse, Sigma supports over 1,200 pharmacies nationwide. Listed on the Australian Securities Exchange, the company has strengthened its market position through strategic expansion and operational excellence.
Normalised EBIT Surges 36% in Nine Months
On 6 May 2025, Sigma Healthcare announced a 36% increase in normalised earnings before interest and tax (EBIT) for the nine months ending 31 March 2025, aligning with Chemist Warehouse Group’s first-half FY25 performance. Chemist Warehouse reported normalised EBIT of $446.1 million, up from $328.4 million in 1H FY24, driven by a 13% sales increase to $5.15 billion. Transaction costs of $42.4 million, including $34.3 million in Q3 FY25, were excluded from normalised figures. Pre-merger sales between Chemist Warehouse and Sigma, included in EBIT, will be eliminated as inter-company transactions in consolidated financials, impacting reported earnings.
Merger Creates $30 Billion Healthcare Powerhouse
The merger with Chemist Warehouse, finalised on 12 February 2025, has transformed Sigma into a healthcare giant with a market capitalisation exceeding $30 billion. Accounted for as a reverse acquisition, Chemist Warehouse is the accounting acquirer, with Sigma’s financials consolidated from the merger date. Sigma’s FY25 results, due in August 2025, will include 12 months of Chemist Warehouse’s financials and Sigma’s performance post-merger. The company is focused on integrating operations to unlock $60 million in annual cost synergies within four years.
Healthcare Sector Drives Resilience Amid Challenges
Sigma’s share price declined 4% on 6 May 2025, as investors adjusted to the elimination of inter-company sales and merger-related costs. The healthcare sector remains robust, supported by Australia’s ageing population and rising demand for pharmaceuticals. Sigma’s operational strength, demonstrated by managing a 40% volume increase from its Chemist Warehouse supply contract, positions it to capitalise on industry tailwinds. The company’s international presence, including new stores in Dubai, adds diversification.
New Stores and Synergies Fuel Expansion
Sigma is well-positioned for growth, with plans to open up to 30 new stores annually in Australia, driven by demand for affordable medications. International expansion, including recent Chemist Warehouse openings in Dubai, enhances revenue potential. With a projected free float market capitalisation of $4.1 billion, Sigma is a candidate for S&P/ASX 100 index inclusion, potentially attracting institutional investors. Operational synergies and a diversified earnings base further strengthen its outlook.