Sigma Healthcare (ASX:SIG) executives used the company’s half-year earnings call for the six months ended December 2025 to highlight strong top-line growth, operating leverage and early synergy progress from the combined Sigma and Chemist Warehouse (CW) businesses. Managing Director and CEO Vikesh Ramsunder was joined by new Group CFO Richard Murray, who started in October, and Head of Corporate Affairs and Investor Relations Gary Woodford.
First-half performance and key drivers
Ramsunder said the “complementary nature” of Sigma and Chemist Warehouse was beginning to show in results, pointing to a 15% increase in revenue for the half. Sales in the Chemist Warehouse branded Australian network rose 17%, with like-for-like sales up 15%. International markets accelerated, with network sales up 24.5% and like-for-like sales up 11%.
The board declared a dividend of AUD 0.02 per share, described as a payout ratio close to 60% and within the company’s 50%–70% guided range.
Financial details: margins, cash flow and balance sheet
Murray said revenue growth was about 1.5 times operating expense growth in the first half, contributing to operating leverage. Normalized EBIT was reported at AUD 582.9, up 18.7%, with EBIT margins expanding 34 basis points. Gross margin was “consistent” at 18.3%, which management said reflected scale efficiencies, mix and improved supplier support.
Normalized EPS was AUD 0.034 per share, up 19.4%, supporting the fully franked AUD 0.02 per share dividend.
On cash generation, the company reported free cash flow of AUD 284.6 million and operating cash flow of AUD 317 million. Net debt leverage improved to 0.61x EBITDA from 0.85x at 30 June, and net debt fell to AUD 635 million from AUD 752 million at year-end. Murray said debt reduction was supported by a AUD 117 million reduction in debt and that the company reduced gross borrowings by AUD 97 million during the half.
Management also discussed working capital, noting the half included a AUD 218 million working capital outflow that reflected strong revenue growth and inventory held across both retail and wholesale operations. Murray highlighted that days inventory for the combined Sigma business was consistent at 49 days through the half, calling it positive given seasonal wholesale inventory build into Christmas.
CapEx for the half was AUD 13.7 million, directed to store openings, supply chain infrastructure, technology investments and integration. Murray noted some CapEx timing effects from accruals and said any potential New Zealand distribution center investment would likely be spread over roughly two years, with more details expected once plans are finalized.
Store expansion and brand portfolio plans
Ramsunder framed strategy around four pillars: domestic growth, international expansion, product differentiation via owned and exclusive labels, and efficiency gains from scale. In Australia, the company added 13 new Chemist Warehouse branded stores during the half, and said it had begun efforts to reinvigorate the Amcal and Discount Drug Stores (DDS) brands. A milestone cited was the full conversion of all My Chemist stores to Amcal and DDS to simplify the brand portfolio.
Looking ahead to the second half of FY26, Ramsunder said Sigma expects to add nine Chemist Warehouse stores and complete 18 Chemist Warehouse refurbishments. He also outlined long-term network targets of 900 Chemist Warehouse stores, 300 Amcal pharmacies and more than 150 DDS stores.
In response to analyst questions on growth run rates, Ramsunder said Chemist Warehouse branded store openings averaged around 20–22 a year, noting previous reporting had included pipeline stores and other categories. He also clarified that first-half additions to Chemist Warehouse stores were “genuine additions,” not conversions from Amcal or DDS.
On Amcal and DDS, Ramsunder characterized the opportunity as multi-year and said it is “not a material driver at the moment” but remains an opportunity. Management described the portfolio positioning as:
- Chemist Warehouse: big-box discount pharmacy
- Amcal: everyday community pharmacy with a growing beauty focus
- DDS: convenience-oriented pharmacy format
International growth and supply chain investments
International retail network sales exceeded AUD 800 million in the half, and the company opened nine stores in New Zealand and three in Ireland. Ramsunder said the international network reached 89 stores across New Zealand, Ireland and Dubai, including more than 70 stores in New Zealand, where sales were up 22.4% for the half. Sigma expects to open four more stores in New Zealand in the second half.
The expansion in New Zealand has triggered a review of supply chain requirements, with management saying it was close to finalizing plans for a new Auckland distribution center. In Ireland, where the company now has 17 stores, management said it was strengthening the operational backbone through improved supply from its own distribution center, enhanced supply partnerships and more effective marketing, with four additional store openings expected in the second half.
In Dubai, management said two existing stores were proving popular and that three more stores would open shortly. Ramsunder said the decision to open three additional stores was “a vote of confidence,” while acknowledging that with only two stores it is early to draw long-term conclusions.
As previously announced, Ramsunder said China will be focused only online, with sales up 3.3% for the half and a physical store closure program expected to be completed by FY29 with “minimal financial impact.”
GLP-1 medicines, private label and synergy progress
Executives fielded multiple questions about GLP-1 medicines. Ramsunder said GLP-1 adoption boosted first-half sales and expected it to continue supporting second-half growth, though he noted the effect would moderate as the company cycles a higher base. He called the category “enduring,” citing continued adoption and future innovation such as oral dosages. He also said GLP-1 prescriptions can support additional purchasing in-store, pointing to examples like protein products. On margin, he said percentage margins are lower because GLP-1 is expensive, but argued the category expands market size over time.
On owned and exclusive label products, Ramsunder said the company launched more than 400 new own and exclusive label products in the half, with owned and exclusive labels now close to 10% of Chemist Warehouse retail sales. He said owned and exclusive Swift label lines grew 16% in the half, and highlighted Wagner Generics, which he said now makes up 39% of the recommended generics range. In response to questions about growth slowing from prior periods, Ramsunder said growth can naturally “compress” as more products are added, though standout products can re-accelerate growth.
On integration and synergies, management reiterated an AUD 100 million synergy target by FY29. Ramsunder said the TuiKi program delivered AUD 13 million in the half and is weighted toward years three and four, emphasizing the need to avoid disrupting day-to-day stock flow while consolidating supply chain operations. Initiatives cited included closing the ePharmacy distribution center in Preston, consolidating transport networks, and announced closures of CWC facilities in South Australia and Western Australia by the end of the calendar year.
Management also referenced a multi-year technology rationalization roadmap and said AI is being enabled across the business to support efficiency efforts.
In closing remarks, Ramsunder said the first seven weeks of the second half showed sustained momentum, with Australian Chemist Warehouse branded store year-to-date sales up 16.6% and like-for-like sales up 14.4% as the company begins to cycle GLP-1 sales from the prior year.
About Sigma Healthcare (ASX:SIG)
Sigma Healthcare Limited, together with its subsidiaries, engages in the wholesale distribution of pharmaceutical goods and medical consumables to community pharmacies primarily in Australia. The company operates various aligned pharmacies, including branded pharmacies under the Amcal, Discount Drug Stores, Guardian, and PharmaSave brands. It also provides retail support services to its branded network of pharmacy members; dose administration aid services; and third and fourth-party logistics services to pharmaceutical manufacturers and other supplier partners.
