or another Pharmacy Group aligned to Sigma going under???
The discount pharmacy groups are cutting each others throats and also in the process destroying some of the smaller independents who cannot compete.
The double whammy is that the government continues to screw down margins even tighter through their PBS price disclosure policy. It has been the high margins on generics that has subsidised discounting.
In addition to pressure on dispensary cash flow, front of shop sales are also stressed like most other retail businesses.
Bankruptcies (e.g. Harrison's Group among many) in pharmacy have exploded over the last couple of years and there are many more highly leveraged operations out there that are in danger.
My biggest fear is that one of the larger discount pharmacy groups (and a Sigma customer) which has expanded rapidly over the last few years may be in trouble with it's lenders as their valuations are reassessed.
It is a fair indication of how tough things are out there in pharmacy land when you look at both Sigma and API's share price compared to several years back when they were five or six times higher. The wholesalers are a reasonable barometer of the industry.
I have no information to back this up but I believe it has been an accident waiting to happen and there would be many out there in the know which could have resulted in the share price getting smashed today.
SIP Price at posting:
53.2¢ Sentiment: Hold Disclosure: Held
