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“So if we can buy our own brands free from us again, that will increase our own business tremendously.”
Stabilizing Sigma’s back-end systems was a priority for Mr. Ramsender.
“Since we moved from the old system to the new system, we had a lot of disruptions, so we started doing our stocks only half the year,” he said.
“And now we realized that a lot of stock wasn’t physically there, so we focused on getting the data and inventory right. This makes a big difference to our efficiency and our bottom line.
Sigma reported a 3.3 percent decline in wholesale sales to community pharmacies, which were hit by new technology system failures and transition problems between some Sigma distribution centers.
The decline in wholesale sales was mainly due to a fall in PBS drug sales – down 7.9 per cent – as pharmacists went elsewhere to increase supply to their customers, Mr Ramsender said.
On the other hand, front-store sales rose 2.7 percent, thanks to strong RAT sales, while sales of Sigma’s own franchise brands rose half a percent to 5 percent.
Operating expenses rose 5.9 percent to $161.3 million, with Mr. Ramsender citing a lack of skilled workers as a key factor.
In that, freight costs rose 11.1 percent to $23.5 million as sales and higher fuel prices contributed.
“We face pressures on the demand and supply side, inflation from our manufacturers and the fight to find labor, and the price of fuel continues to rise,” he said.
“For a low-margin business, we always have to look for opportunities to increase that margin and multiply revenue streams.”
Sigma will pay shareholders an interim dividend of 50¢ per share, fully transparent, costing the company about $5.3 million.
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