The Sigma Healthcare Ltd (ASX: SIG) share price is down more than 4% after the Chemist Warehouse owner gave a FY25 update.
Sigma gives Chemist Warehouse update
The company gave an update after completing the merger with Chemist Warehouse Group on 23 February 2025.
For the nine months to 31 March 2025, Chemist Warehouse Group’s normalised EBIT (excluding transaction costs and acquisition-related impacts) growth was “broadly consistent with the 36% growth” achieved in the first half of FY25 by Chemist Warehouse Group.
Chemist Warehouse Group normalised EBIT rose 36% to $446.1 million.
Transaction costs of $42.4 million were incurred to 31 March 2025, with $8.1 million incurred in the first half of FY25 and $34.3 million incurred in the third quarter of FY25.
Sigma noted the normalised EBIT figure includes some earnings made from sales by Chemist Warehouse Group to Sigma that, after the merger is implemented, would be eliminated and recorded as inter-company sales.
The ASX healthcare share plans to release its result for the 12 months to 30 June 2025 in August 2025.
Accounting update
The legal acquisition by Sigma of Chemist Warehouse Group will be a reverse acquisition so, for accounting and financial reporting purposes, Chemist Warehouse is treated as the accounting acquirer and Sigma will be treated as the accounting acquiree.
Therefore, Sigma’s FY25 result for the 12 months to 30 June 2025 will include 12 months of Chemist Warehouse’s financial information, and include consolidated Sigma financial information from the merger completion date of 12 February 2025. Transaction costs incurred by Sigma before the merger date won’t be included in the FY25 consolidated financials.
Final thoughts on the Sigma Healthcare share price
Despite today’s fall, the owner of Chemist Warehouse has still seen its share price rise by more than 60% in the last six months.
I’m not sure if it’s cheap enough to be an excellent buy yet, though the business is compelling with strong domestic growth with longer-term overseas potential. I may want to wait until the FY25 result to get a clearer understanding of the company’s financials before putting it on my potential buy list.
For now, there are other ASX growth shares that appeal to me more.
