SIG - Sigma Healthcare

I probably jumped in a little early on this one as BO was not confirmed ( still isn't ) when I bought @ $0.615 but SIG is trending nicely on no news.

There is a large unfilled gap from $0.657 to $0.80 (not shown) so hopefully it can get past the $0.65 mark, then work on filling the gap after that.

Still not an investible business IMO, likely heading to its next corporate disappointment.

galumay said:

Still not an investible business IMO, likely heading to its next corporate disappointment.

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Hope not, I just got in last week

systematic said:

Hope not, I just got in last week

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No doubt I will be wrong and you will do very well! With a bit of luck some sort of M&A deal will emerge and there is some decent profit for you.

With SARS-CoV-2 on the loose, I'm hoping this healthcare stock will do well over the next few months.

Sigma Healthcare has bounced back from a loss a year earlier to report a profit for the year ended 31 Jan. Sales revenue rose 4.8 per cent to $3.4 billion while net profit after tax climbed to $59.8 million from a $12.3 million loss a year earlier. Underlying EBITDA rose 39.2 per cent to $81.1 million, slightly ahead of guidance.

“Significantly, Sigma has navigated the challenges of the COVID-19 pandemic without any reliance on direct government support such as Job Keeper,” said Sigma chief executive and managing director Mark Hooper.

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“We have the building blocks in place to underpin our target of 10 per cent per annum growth in underlying EBITDA for the next two years and around $100 million by FY23.”

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Sigma declared a fully franked dividend of 1¢ a share.

not much confidence in SIG ... 60c again

Sigma Healthcare has blamed the impact of the pandemic and associated lockdowns for the half-year net loss of $1.3 million. And it sees the lockdowns causing more pain in coming months.

Revenues were up 5.5% to $1.7 billion for the July half year and the loss figure was better than the $4.3 million loss during the same period last year when the company had to withstand the first round of lockdowns.

CEO Mark Hooper said in the earnings release that the business had achieved a pleasing result despite the continued impact of city-wide lockdowns, which have moved foot traffic away from pharmacies in key areas like airports and CBD areas.

“It is creating a slightly softer position for us,” he said. Despite this, Hooper said he does not expect any widespread closures of pharmacies in city areas, optimistic that the vaccine rollout is now underway.

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He said it was disappointing that pharmacies had only been green-lit to give COVID-19 vaccines over the past month, but was confident the sector would now play a big part in speeding up the rollout.

“With Moderna now coming into pharmacies, it’s a real positive,” he said.

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Underlying earnings before interest and tax rose 14.7% to $39.2 million for the half but Mr Hooper said the lockdowns will trim that growth for the full year to around 5%.

SIG is my November ( 2021 ) tip in the comp.

please remember i ( normally ) pick stocks i want to buy cheaper , and have an order in for SIG @ 55 cents ( which MIGHT edge lower in the coming month )

i THINK SIG will be edged out of the bidding war over API , because the regulator will ( ACCC ) will be hesitant , i see GG has a differing opinion on the API thread )

i hold SIG , API and WES , and the SIG offer suits me better ( but would prefer API carried on as it is )

but SOL have already bailed so i suspect somebody will snap up API ,

my instincts tell me the banking sector will come under pressure next month , and should really have picked a XFJ focused ETF , but i picked SIG anyway

good luck everyone

API Merger Proposal
Sigma Healthcare Limited (Sigma) announces that it will not proceed with its current proposal to
merge with Australian Pharmaceutical Industries Limited (API). This follows the non-binding
proposal lodged by Sigma on 27 September 2021 to merge with API.
Whilst the Board of Sigma remains of the view that Sigma’s merger proposal with API is a very
strong proposal for all stakeholders, particularly given the $45 million of operational synergies per
annum that it believes would likely have been created for API and Sigma shareholders, the Sigma
Board has put an end to the process.
Sigma Chairman Ray Gunston commented: “Sigma believed it made economic, commercial and
strategic sense to pursue the merger proposal between Sigma and API on the terms we
presented. However, after further assessment, and in the context of the competitive bid process
with its changing transaction and economic considerations, Sigma has made the decision not to
proceed with this current proposal.”
“Sigma remains confident of our growth prospects without a merger with API and the Board and
management have continued to focus on longer term growth in our core operations. The Sigma
team will keep on working to finalise the completion of our infrastructure upgrade, including our
ERP project, and to remain focused on leveraging our infrastructure to create greater shareholder
value.” he said.
“Notwithstanding some short-term challenges in the current year, we believe the Sigma business
base provides a positive longer-term outlook. Sigma’s investments in its operations, and its strong
balance sheet and future cash generation, underpin the future strategic directions that will be
shaped under the leadership of our new CEO Vikesh Ramsunder from February 2022.” Mr
Gunston concluded.
This announcement is authorised by order of the Board.

courtesy of Bell Direct
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DYOR

i hold both SIG and API ( and WES )

the scrip ( SIG ) offer would suit me better

looks like my second choice is off the table , but since WES is doing a $2 a share capital return , is WES still interested in 100% of API ??

although holding a controlling interest in a company is unusual for WES ( instead of inhaling it all ) one might wonder until an announcement to clarify the current offer

i lowered my order to 54c after just being missed twice higher , now will the share price fade on the news in the near term

Not sure about the fundamentals on this but I assume WES and WOW would have run the ruler over them before pushing up the price of API. Could have bought this way off highs and looking quite ill.

i bought API from $1.74 down to $1.07 ( av. SP $1.34 )

so cash-wise if the take-over proceeds ( either one ) i am looking pretty , but the portfolio strategy is looking ragged

especially if the holdings in Aussie utility companies ( AST and SKI ) complete

OOPS posted in the wrong forum

maybe Joe would like to move it to the API forum , please

SIG i bought from 83.5 cents down to 46 cents a share price average of 60.5 cents , so am a bit underwater so far on SIG , but am willing to carefully add more ( lower )

divs4ever said:

SIG i bought from 83.5 cents down to 46 cents a share price average of 60.5 cents , so am a bit underwater so far on SIG , but am willing to carefully add more ( lower )

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I'm surprised it's only up a few % atm.

You're averaging down strategy seems to be working for you though.

just added some SIG fordiscretionary, 53c is not that high and might get a bit of back wind now
, a shame for API as I have held often but within systems and I was out when it was right to be in...

a lot of this corporate activity would be, I think, to shore up the defenses, as it is quite likely Chemist Warehouse will list in 2022 (I've heard).

Dona Ferentes said:

a lot of this corporate activity would be, I think, to shore up the defenses, as it is quite likely Chemist Warehouse will list in 2022 (I've heard).

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That would be a good vompany with aging and poorer population, plus all the supplements craze..obviously at the right price

qldfrog said:

That would be a good company with ageing and poorer population, plus all the supplements craze..obviously at the right price

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Don't forget the beauty products, skin care and perfumes.... that is where the margins are

Sean K said:

I'm surprised it's only up a few % atm.

You're averaging down strategy seems to be working for you though.

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now my trader buddy , did very well on SIG back when it did the capital return ( i was on the sidelines , uninterested at the time ) my strategy was to hold hybrids on healthcare stocks back then ( Primary Healthcare and Healthscope , mostly ) and have always been struggling to get a good position in SIG ( meanwhile API had grown into a major holding , for me )

but SIG has had it's dramas in the past , so some might be a little cautious , looking ahead .. will SIG improve or slide when this virus thing is history and near-normal supply-chains return

i was looking for small(ish) parcels in the 4x cent range , that might be a fair wait now , but SIG has had it's moments before

( since SIG manufactures some products i was mildly surprised WES chased API instead of SIG , since WES already has chemical capability in other areas , WES making medicines AND fertilizer/agri-chemicals should have yielded some synergies , just not a truckload early on )

Sean K said:

I'm surprised it's only up a few % atm.

You're averaging down strategy seems to be working for you though.

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was mostly playing API and SIG as 'safe-havens ' , mostly because i have biases against most of the listed food producers .
i try to avoid seafood companies am harsh on beef/sheep companies and careful ( but lucky so far ) on companies that produce plant crops . there will be huge changes coming eventually , there is just too much debt in the system for endless can-kicking

Trading Update

Sigma Healthcare Limited (Sigma) has today updated its earnings guidance for the financial year
ending 31 January 2022 (FY22). With 10 months of FY22 complete, Sigma now anticipates FY22
Underlying EBITDA to be down around 10% versus FY21. This follows the most recent update
provided in September this year of 5% growth.
This update reflects a challenging second half of the financial year, which has been impacted by
shorter-term operational issues resulting from the roll-out of our Enterprise Resource Planning
(ERP), with Sigma switching to the live SAP environment on 29 August 2021. These issues were
compounded further by the protracted COVID-19 impacts.
Interim Chief Financial Officer Jeff Sells commented: “A total ERP upgrade is a significant change
management program for any company, and whilst we reached go-live on this project broadly on
budget and on time through a pandemic, we have faced additional challenges in the context of
completing implementation through the height of COVID-19 restrictions. Unfortunately, this has
had some significant impacts on our customers, and we are rectifying these issues as quickly as
possible.”
The combination of these factors in the second half of FY22 have materially impacted sales and
resulted in an unexpected increase in operating costs through the transition. One-off and nonoperating costs are likely to be higher at around $25-$30 million. As a result of all these outcomes
the peak net debt will be commensurately impacted.
Mr Sells commented: “We are confident the actions already taken and in progress will see the
technical challenges with our ERP implementation largely confined to FY22. However, these
issues have affected sales in FY22 which will flow through to FY23 sales, with the impact
expected to abate as we progress through FY23.”
Chairman Ray Gunston commented: “Notwithstanding this set-back, we remain confident in the
future growth profile for Sigma, which was further underlined with the Sigma Board recently
approving the extension to our new Victorian Distribution Centre in Truganina. This will see $20m
invested to double existing capacity to 40,000 square metres to accommodate the growth pipeline
ahead. The extension is expected to be completed over the next 18-months.”
“Sigma has undertaken an extensive transformation program over the past four years that puts the
company on a strong footing for our incoming CEO Vikesh Ramsunder to execute our strategy,
focussing on actions to accelerate our long-term growth and improve margins.”
“We remain focused on growing our core business, whilst continuing to build on business
expansion opportunities across areas such as Hospital Services, Contract Logistics and medical
devices and consumables, to leverage our strategic advantage across our automated DC
network.” Mr Gunston concluded.
Sigma has also updated it’s reporting date and is now is expected to announce its FY22 results on
Tuesday 29 March 2022.

courtesy of Bell Direct
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DYOR

i hold SIG

will this be a top up opportunity ( for me ) since it is probable the API holding
will be taken over in time and i am playing this niche as a 'safe-haven'