Business Description:
Sigma Pharmaceuticals Limited (SIP) is a full line wholesale and distribution business to pharmacy. SIP is also the owner of the Amcal, Guardian and Amcal Max brands.

Strategy Analysis:
SIP seeks to supply the most attractive portfolio of prescription drugs, over-the-counter medicines and other front-shop product, and marketing assistance to Australian pharmacies. In 2007 to counter aggressive discounting by low-cost global generics players and by other wholesalers, SIP introduced the Embrace loyalty program. The program offers members discounts across a wide range of product in exchange for minimum purchase levels. Sigma Pharmaceuticals reported NPAT of $26.66m for the half-year ended 31 July 2011. Sales revenues from ordinary activities were $1.37bn, down 2.4% from the same period last year. Sales revenue is down due to this half yearly not having any sales of products from Pfizer, as a result of their decision to bypass pharmaceutical wholesalers and sell their products directly to Pharmacy. Basic and Diluted EPS was 2.4 cents compared to (0.8) cents last year. Net operating cash flow was $105.94m compared to $40.47m last year. No dividend was declared. Looking ahead, the outlook for the second half of the year is for a continuation of trading conditions broadly similar to the first half.