Morningstar 23/03/16 We remain positive regarding Sigma...

Morningstar 23/03/16

We remain positive regarding Sigma Pharmaceuticals’ (SIP) strong retail service offering and believe compliance across its portfolio of banner group members will strengthen bargaining power with downstream suppliers and manufacturers, adding incrementally to operating margin improvement. However, shares are trading in line with our upwardly revised fair value estimate of $1.00. SIP reported FY16 underlying NPAT of $59.1m, up 11% on FY15, on a 10.2% increase in group revenue to $3.46bn. Underlying NPAT excluded the deferred acquisition costs related to the CHS/DDS earnout. The final fully franked dividend of five cents per share was up 66% and represented a 91% payout ratio.