Sigma Pharmaceuticals is looking at new ways of enticing customers into its pharmacies in an attempt to drive revenues.
The drugs distributor and pharmacy services provider says it can’t rely on growth in the Pharmaceutical Benefits Scheme (PBS) to drive earnings in the near term, so needs to look at alternatives.
The owner of the Amcal, Amcal Max and Guardian pharmacy banners says the outlook for growth in the PBS – under which the federal government subsidises drugs – is still relatively flat.
“For the Sigma business, what that means for us is to say we’re not going to rely on PBS growth to go at five or six per cent and be a driver of our business,” managing director Mark Hooper said on Thursday.
“We need to do other things in the business to improve our customers’ revenue base and to grow our business in the medium term.”
Sigma would continue to look at more ways to improve pharmacists’ revenues, such as upgraded loyalty programs and e-commerce platforms.
New e-commerce platforms would be launched in the next few months.
Sigma would also promote the professional services that pharmacists provide – aside from dispensing drugs – such as general advice, diabetes medicine checks, and home medicine reviews.
Mr Hooper said the government was showing a greater willingness to fund health intervention programs at the same time that it was cutting the subsidies for drugs listed on the PBS.
Sigma on Thursday booked an annual net profit of $18.7 million for its fiscal year, down 62 per cent from $49.2 million in the prior year.
The result was pulled back by the $57.5 million settlement of a law suit brought against the company by shareholders, in December 2012.
Excluding the litigation settlement, Sigma’s underlying profit rose four per cent to $52.3 million.
The case was brought against Sigma in 2010 by shareholders seeking damages from alleged non-disclosures by Sigma before a capital raising in September 2009.
Mr Hooper did not provide any earnings guidance for Sigma’s current fiscal year.
But the company was well positioned for growth as it built upon significant operational investment and improved services to pharmacies.
The retail sector remained difficult, but the company would continue to expand the number of stores under its pharmacy banners.
Mr Hooper said the difficult retail environment was drawing an increasing number of independent pharmacists into “banner” pharmacy groups such as Amcal and Guardian because being part of a group enabled them to get greater support.
Shares in Sigma were two cents higher at 65.5 cents at 1425 AEDT.
