The Sigma Healthcare Ltd (ASX: SIG) share price is pushing higher on Tuesday following the release of its full year results.
In morning trade, the pharmacy chain operator and distributor's shares are up almost 7% to 71.5 cents.
How did Sigma perform in FY 2020?
For the 12 months ended 31 January, Sigma reported a 4.8% increase in revenue to $3.4 billion. This was driven by a combination of organic growth from its core wholesale sales and pharmacy brands, along with new business.
In respect to the latter, the company notes that sales to Chemist Warehouse reached their full annualised run rate by June 2020 and remain on track to achieve $800 million in sales over a 12-month period.
Sigma's earnings grew at a quicker rate on both a reported and underlying basis. This was thanks partly to Project Pivot. This transformation program has now concluded, having delivered on the target of $100+ million in efficiency gains.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 39.2% to $81.1 million. This was slightly ahead of its guidance for the year. And on the bottom line, the company's underlying net profit after tax jumped 133.6% to $29.1 million.
In light of its return to form, the Sigma board has reinstated its dividend and declared a fully franked 1 cent per share final dividend.
"Milestone result"
Sigma's CEO and Managing Director, Mark Hooper, was very pleased with the result, particularly given the COVID-19 pandemic.
He commented: "This is a milestone result. We've delivered on our promise of transforming our business and improving our earnings as we enter a period of sustainable growth and improved returns for shareholders."
"Significantly, Sigma has navigated the challenges of the COVID-19 pandemic without any reliance on direct government support such as Job Keeper. We have the building blocks in place to underpin our target of 10% per annum growth in Underlying EBITDA for the next two years and around $100m by FY23," he added.
Outlook
The company's Chairman, Ray Gunston, believes shareholders should be confident about Sigma's future growth prospects.
He said: "We have taken significant strides to transform our business, upgrade our infrastructure, improve our operating performance, and enhance our culture. At the same time, we have reduced net debt to $50m at year end. Collectively, it means we are now in an improved position to execute our strategy and actively pursue opportunities for sustainable growth including in our expansion businesses."
This sentiment was echoed by its CEO. Mr Cooper concluded: "Following a period of significant change, Sigma is now a stronger business and on track to delivering our targeted 10% annual organic growth over the next two years. 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."
