SIP (ASX) Another new high

Originally posted by AmbiGuity ↑

Hi Lakota6,

Thanks for your post, and congratulations on your windfall too. With no disrespect, I would contend that it's foolhardy to disregard MYX as not being a competitor (directly or indirectly) for SIP, these guys are going (motoring) forward, and have sprung from the roots of FH Faulding. Similar business models previously, if my memory serves me correctly? Who knows where, and what market segment MYX will hold in the future? Besides, big business is dictating the abolition of the middleman, and the supply chain is not what it was.
In relation to hospital supply, you make mention of the highly regulated environment, but aren't SIP faced with the same government bureaucracy, should they head down that road? Personally, I don't feel the whole Amcal or Guardian brand is the future, they tend to be seen as the poorer cousin of Chemist Warehouse and Priceline. In any case, I have no easy answers, but I don't see much further SP growth unless SIP widen their collective circle. However, I'm happy to hold, wait and see how this revival continues to play out.

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Hey AmbiGuity,
Yep , you are right with MYX springing from FH Faulding, but at the moment MYX are purely a generic company, and the wholesale side of the business is now operated by EBOS , under the banner Symbion,which also has a number of Pharmacy banner groups in their portfolio, namely Chemmart , Pharmacy Warehouse. There is another smaller player in the Pharmacy Wholesale business called NPD and along with Sigma, Api and Symbion are the only members of the National Pharmacy Services Association and therefore eligible for CSO subsidy from Federal Government set up in 2005. Some larger pharmaceutical companies have tried to bypass the middleman , namely the wholesaler in the past , but still the wholesalers sources medicines from more than 550 primary and generic manufactures in Australia and overseas. I think the threat of bypassing the wholesale supply chain is small in the future. I am also comfortable with Sigma's banner groups , namely Amcal & Guardian , as they are placed in a different price point, than the warehouse, box type Chemist Warehouse . I think you misunderstood me with my reference to government regulation and therefore income stream. I do not know how regulated the hospital supply chain is, but am familiar with the regulation placed on pharmacy wholesale margins. Another poster posted about SIP dividend which was 3c in H1 and therefore 4.5% franked return if the dividend stays the same for H2. This compares very favourably with API at 2.65%. The challenge going forward is to find growth in areas of higher EBIT, and the downward pressure on the dividend as the company takes on more debt to fund said purchases, Good luck to you.