Sigma Healthcare says its merger with Chemist Warehouse will enable it to cut $40 million more in annual expenditures than previously anticipated.
In delivering its first set of financial results since the reverse takeover was finalised in February, the pharmacy and wholesale distributor said it made a full-year net profit after tax of $579.1 million, down 2.1 per cent from a year ago.
Revenue for the 12 months to June 30 rose 82.2 per cent to $6 billion, while earnings before interest and tax (EBIT) was up 32 per cent to $767.9 million.
Sigma said it now expected the merger to result in $100 million in cost savings a year, up from its previous estimate of $60 million, as it consolidates supply chain, logistics and corporate operations.
"The merger with Chemist Warehouse has delivered a stronger, more integrated healthcare business, with greater scale, capability, and market reach," said Sigma chief executive and managing director Vikesh Ramsunder.
Sigma's new Wagner line of generic medicines, which the company launched in November, had helped grow sales of own-brand and exclusive labels by 20 per cent, Mr Ramsunder said on Wednesday.
The new financial year had begun strongly with double-digit same-store retail sales growth, he added.
Sigma said it would rebrand most My Chemist franchise stores into Amcal and Discount Drug Store stores.
Jai Mirchandani, portfolio manager at ELM Responsible Investments, said the results showed a clear sign of the strength of the business.
"EBIT up strongly and synergy targets already lifted. The Chemist Warehouse network continues to deliver impressive double-digit sales growth both here and offshore," he said.
"With own-brand expansion, scale benefits and strong cash flow, Sigma is well positioned to keep compounding value for shareholders."
Sigma said it would pay shareholders a 1.3 cent per share dividend, fully franked.
In early trading, Sigma shares were up 7.8 per cent to $3.04.
