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SIP, SIGMA PHARMACEUTICAL LIMITED
early birds
post Posted: Sep 8 2016, 10:30 AM
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In Reply To: nipper's post @ Sep 8 2016, 10:03 AM

gees, it went up over 12% as asx200 down over 1%.
do you have some nipper??



 
nipper
post Posted: Sep 8 2016, 10:03 AM
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Sigma Pharmaceuticals Ltd. (SIP) lifted its annual earnings guidance after first-half net profit increased by 25% as the company diversified its business away from prescription medicines that have been hit by government funding cuts. The pharmaceuticals distribution business, which also owns the largest pharmacy network in Australia, on Thursday reported a net profit of 23.7 million Australian dollars, compared to A$18.9 million a year earlier.

Underlying earnings before interest and tax rose by 17%, compared to guidance for a rise of at least 10%.

The Melbourne-based company now expects full-year earnings to rise by 10%. In March, the company said it expected Ebit to rise by at least 5% annually over the next two years.

Sigma has been hit in recent years by cuts to the pharmaceutical benefits scheme, the government program that provides subsidised prescription drugs to residents. In response, Sigma has been reducing its reliance on government regulated revenue by boosting sales of over-the-counter medicines and pharmacy services, while cutting costs, and making a tentative push into China via its online Amcal chemist brand store.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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nipper
post Posted: Sep 5 2016, 03:48 PM
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QUOTE
Sigma Pharmaceuticals boss Mark Hooper says he is the most comfortable he has been in the top role and why not — he ­returned to the company six years' ago when many thought it was collapsing, took some risks and turned its fortunes around.

Hooper says it is a variety of roles — he spent 20 years in the mining sector — and dealing with big deals and big debts that filled his career toolbox with skills needed to take on a chief executive role. "I sold about $3 billion of assets and refinanced about $4bn of debt in about a five-year period across three different organisations," he says.

Hooper was previously chief financial officer at Sigma but left it on a high in 2006 to pursue his goal of working towards a chief executive gig. The pharmacy wholesale and distribution business, which also has the largest pharmacy network in Australia, once saw its share price hit $14 in late 2005 and it was comfortably sitting inside the ASX100 when Hooper left.

"When I left in 2006 the ­market cap was $3bn-$3.5bn. When I got back in August 2010 it was about $300m-$400m," Hooper says. "The company owed the banks $1bn and were in default with the banks. Around the time the headlines suggested there weren't many people who thought the company would ­survive."

Hooper returned to Sigma, which in four years had gone from a buoyant, growing organisation to one struggling to keep its doors open.

"Even though Sigma was in an enormous amount of trouble, it was too good an opportunity for me to turn down," Hooper says. "I am under no illusions that I would not have been offered the CEO job if Sigma was travelling along OK. I was a good solution for them as I knew the business."

The chief says he recalls that when his appointment was announced one commentator opined that he had likely accepted the shortest CEO appointment in Australian corporate history. "It was clear when I got back that a lot of the issues were around the business basics," Hooper says.

"They had lost their way and weren't focusing on the right things and you could see it in terms of the escalating debt and low return on invested capital. "Jeff Sells (chief financial officer) and I used to joke that every time we lifted a rock there was a bad piece of news underneath. The culture used to be hide the problems and hope no one noticed."

Hooper says he originally thought it would take a year, or two, to fix the business but in hindsight it was much harder.

"In the last part of 2010 the market was still waiting for me to tell them how I was going to repay the loans, Sigma's biggest supplier pulled out of the business we were running and the federal government announced they were going to cut the guts out of the Pharmaceutical Benefits Scheme. I think we bottomed out at about 25c-a-share."

Federal government regulation was one hurdle Hooper had no control over. The government has made about $10bn to $12bn of savings on PBS reform over last five or six years.

"We get paid a 7 per cent margin to distribute PBS drugs, so multiply 7 per cent by that government savings number and that is what collectively has come out of the industry in the last five or six years."

But what he could control, he did, and he set about changing the culture and reducing Sigma's reliance on government regulated revenue. Since he took the reins, the return on invested capital has gone up from 6 to 15 per cent, the market cap has gone up by over $1bn and Sigma has given $400m back to shareholders in dividends, which was the entire market cap when Hooper returned.

"After about 18 months I thought the regeneration of the business would take longer than I thought, so I spoke to the board and investors and said we need to reinvest money in the next few years and make sure we have a proper base for long term growth," Hooper says. "That was the right thing to do for investors and the company but it wasn't the easiest message to sell."

Sigma's boss says a decision was made around three years' ago to escalate the company's growth aspirations and look for ways to accelerate organic growth and take on acquisitions.

Through that period Sigma bought CHS, a second-tier wholesaling business, which also owned pharmacy brands PharmaSave and Chemist King, purchased the Discount Drug Stores business and increased Sigma's organic growth to increase revenue streams away from its historical business, which was around PBS medicines. The company now controls 750 branded stores, which represent about $3bn in retail sales.

Sigma, which reports its 2017 half-year results on Thursday, has had 10 to 15 per cent earnings growth for last couple of years and it has told the market it will have 10 per cent earnings growth for at least the first half of this year. "We'll go close to doubling our earnings compared to what it was the year before I came back into the business," Hooper says.

"Now is the opportunity to leverage off the hard work of the last five years — it is the most comfortable I've felt in the role. "There are still significant challenges on the regulatory front and we will find a way to deal with them. It is one of the things I reinforce with the team, we worked hard to get here but let's not fall off the perch because we weren't paying attention."




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: May 13 2016, 04:43 PM
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In Reply To: nipper's post @ May 5 2016, 12:13 PM

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Sigma Pharmaceuticals says it will be finally putting to bed monies outstanding from a class action related to an overstated half-year profit in 2009. Sigma in 2012 settled a $57.5 million class action against it in relation to the breach, which was revealed in the wake of the company's shock-ensuing $389m full-year loss.

Sigma said last year's guilty pleas by its former chief executive and CFO -- Elmo De Alwis and Mark Smith -- in relation to the breach had activated a "clawback" clause from insurers AIG who partially cover the 2012 settlement. "As a consequence of the guilty pleas by the former CEO and CFO AIG has notified Sigma of its intention to exercise this right," Sigma said in a release to the market.

Both men last year admitted overstating Sigma's revenue for 2010 by $15.5m and its profit for the year by $9.6m. They also pleaded guilty to a second charge of overstating revenue by $3.5m in the 2009 half-year report.

Sigma said it had agreed to settle AIG's claim for reimbursement for $12.5m. "As a result, there will be a one-off $8.8m impact on Sigma's reported net profit after tax," Sigma said, adding that the clause had continued to be recognised as a contingent liability in Sigma's accounts since the settlement.

For the full-year through January, Sigma booked a $50.5m net profit after tax.
Sigma said it expected underlying earnings before interest and tax to be up "at least 10 per cent" for the first half.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: May 5 2016, 12:13 PM
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angry constable got a callout to another job - impediment removed
QUOTE
Sigma Pharmaceuticals has boosted investor confidence by flagging a strong trading start to the year, with chief executive Mark Hooper saying the drug wholesalers' push to rely less on income from the pharmaceutical benefits scheme has continued.

"As a wholesaler we have to ensure we can get medicines anywhere in Australia in 24 hours but because we are getting paid less to do it (because of PBS reform) we have to be super efficient," he said.

Mr Hooper told investors at yesterday's meeting in Melbourne that, while its full-year guidance remained unchanged, its current performance for the year to date had the company on track to deliver "at least" 10 per cent growth in underlying earnings before interest and taxes growth for the first half.

"One of the thematics we kept getting back from investors was we can see how you have fixed the business but we can't get a handle from where the growth is coming from," he said. "We have had a strong period of trading for the first three months of the financial year, so we thought we had greater confidence about the first half and should give that guidance. It's another tick that the business is travelling well."

Mr Hooper added that investors wanted to see that the executive team had "fixed" the business on the back of regulatory reform that had squeezed revenues.

"One of the things we tried to get across at the AGM was we do feel like we have reached that inflection point with the business," he said. "In the early days we had the dual challenge of fixing the business and negating what was an underlying macro factor in terms of the PBS, working against you. We've got ourselves past that point now."




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
alonso
post Posted: Apr 4 2016, 11:35 AM
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In Reply To: alonso's post @ Mar 31 2016, 03:26 PM

It's thumping against that 105 like an angry constable. Maybe it'll get tired and crash in a heap.
One lives in hope.





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"The optimist proclaims that we live in the best of all possible worlds. The pessimist fears this is true"

"What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom." Adam Smith
 


alonso
post Posted: Mar 31 2016, 03:26 PM
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In Reply To: nipper's post @ Mar 24 2016, 07:12 AM

I set my target and I'm banking it.
Good luck to holders.



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"The optimist proclaims that we live in the best of all possible worlds. The pessimist fears this is true"

"What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom." Adam Smith
 
nipper
post Posted: Mar 24 2016, 07:12 AM
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In Reply To: PeterH's post @ Mar 23 2016, 02:39 PM

QUOTE
After reporting a slight dip in annual profit yesterday, Sigma Pharmaceuticals boss Mark Hooper said the company was in the strongest position, from a balance sheet perspective, of the country's three wholesalers to take on mergers and acquisitions."I'm often questioned about how much debt we'd take on, and for the right acquisition I'm confident I'd get any level of funding I'd require," he said. "I'm not limiting what we will look at in size or scope. If there was a big opportunity available, we'd be happy to take it on. "It needs to fit our strategy and have the right level of return for the capital we invest but beyond that we are happy to be bold about what we might take on."

The Sigma chief said the company would be debt free by year end despite it paying out a high level of dividends to shareholders, conducting a share buyback and funding a sizeable capital expenditure program.

Sigma yesterday reported a 4.3 per cent drop in net profit to $50.5 million, which was impacted by a one-off accounting adjustment, while recording a 10 per cent increase in revenue to $3.5 billion.

Mr Hooper said it was the second year the company had recorded double-digit growth, adding that the accounting adjustment was because acquisitions Sigma had made were more successful than originally anticipated. The results also highlighted the company's focus on diversifying its revenue stream away from a reliance on the federal government's pharmaceutical benefits scheme, which has faced price cuts.

Mr Hooper said that while the reduction in revenue from the PBS obviously impacted the company, it had consistently outlined in the past few results it was ­focused on enhancing non-PBS income streams. He highlighted that a few years ago around 70-75 per cent of its earnings were PBS related. Currently about one-third of Sigma's revenue was from non-PBS income streams, and as it was higher-margin activity it produced about 40-45 per cent of income, Mr Hooper said.

"I'm often questioned what our target is (for non-PBS revenue) but there is no logical cap to it," he said. "The distribution of PBS products will be the core of what we do but, in terms of generating growth, that is going to be harder and harder as time goes by. Having more of your income stream from non-PBS activity becomes a key driver from a growth perspective," he said.

The $2.5bn hospital pharmacy sector is another growth option in Mr Hooper's sights as he seeks to expand on the $100m in revenue Sigma generates in that sector from its Victorian business. "There are two main players in the national market and we believe the market is crying out for a strong third player, so we are going to aggressively push into that space," he said.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
PeterH
post Posted: Mar 23 2016, 02:39 PM
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In Reply To: arty's post @ Mar 23 2016, 12:38 PM

Arty and Alonzo, it all depends on your investment horizon, of course, but I speak as quite a long term holder and have ridden this thing down then up again. As I see it SIP is just hitting its straps so I don't see any urgency to get out.

Anyway, with the rumour around that Boots is looking for a way into the Australian market I see SIP as a possible T/O target. Never underestimate the value of a well established distribution set-up. That lesson was learned when the multinationals bought out every Australian confectionery manufacturer as much, or more, for their wholesale grip as their brands.


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arty
post Posted: Mar 23 2016, 12:38 PM
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In Reply To: alonso's post @ Mar 23 2016, 11:00 AM

What are you belly-aching about, Alonso? wink.gif
Of course, some worry-warts left theirearly sell orders in - probably on condition "take profit if it can't break $1".
Buyers were only too happy to accommodate them and wait at lower levels. There could even be some stop-hunting involved.
But look at the chart now smile.gif

5-minute Intraday:
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daily:
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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
 


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