facts figures not just opinions , page-23

Signature,
You have got it right.
Sigma were offering 6 months credit and very low prices to certain of their customers.
These "special" terms ( prices and credit )were certainly not available to their ordinary long standing customers.

Quite stupid business practice as all it did was give them PROFITLESS turnover and along the way undermined the majority of their good customers by giving these favoured groups a competitive advantage not available to the rest of us.
Don't know what Elmo and the board were thinking of, but on this issue they completely lost the plot !




Druggist,
Agree with your post re the majority of Sigma customers not changing wholesalers.
In the cold hard light of day, for the reasons you state it is unlikely that many will change, and as I have mentioned previously, many customers are also Sigma shareholders.

However it is important that the incumbent board get the message load and clear from existing pharmacist customers about the folly of their ways.

I suspect the reason for Elmos continuing presence is that given the specialist detailed knowledge required to run a pharmaceutical wholesaler, there is no one at this moment with the necessary experience to take over the job.
But a successor needs to be found quickly.
Elmo must go.
He had no ongoing credibility with investors, bankers or his pharmacist customers.
And yes, most if not all of the rest of the board should also resign as soon as suitable replacements can be found.

Miope/ Roboshan

RE: CW. and MC.(the gance group.)
No doubt if they had to pay all their debt back immediately they would go bankrupt..........

This would apply to almost any business... or indeed any family with a home loan.....

The investor presentation from Sigma released 31st March mentioned a debt reduction programme .......with customers who "currently enjoy extended trading terms".... by over $90 mill by Jan 2011.

Presumably this referred to the Gance groups

HHMMMM....Works out at ~$10 mill per month.. a lot of spare cash to come up with !!!! .... which CW may or may not be able to achieve.

Will be interesting!

Whatever happens it will severely restrict CW abilty to operate the way they have been, and for the rest of Sigma's customers, has to be a good thing.
(As an aside, I was in the same year at Vic Pharmacy College as Jack Gance in the 1960s)
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One more cloud on the horizon which I didn't mention in my earlier post is the potential litigation re Sigmas failure to disclose their balance sheet woes earlier.

Nobody knows quite how this will unfold, but is likely to drag on, and it will not be helpful for the share price recovery in coming months.

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BOTTOM LINE:

The huge write-downs were non cash items.

The underlying core business, is still profitable and should improve.

And that very simple fact means Sigma will survive.
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I have placed the disclosure sentiment as "BUY"..... but only around current prices of < 50 cents.

As I mentioned previously, I think there is a minimum 50% capital gain in the shares without too much downside risk.

Caveat emptor

Bendigo