Sigma Healthcare Faces Share Pressure Despite Strong Earnings Post-Merger; ASX200 Implications in Focus

Highlights

• Sigma posts 36% EBIT growth after Chemist Warehouse merger
• Share price slips following earnings and conference presentation
• Transaction costs weigh on investor sentiment

Shares of Sigma Healthcare (ASX:SIG) came under pressure in early trade despite reporting strong earnings growth following its high-profile merger with Chemist Warehouse. This marked the company’s first earnings update since the reverse merger was completed, with Sigma’s performance offering a deeper look into the financial transformation underway.

Sigma announced a 36% increase in unaudited normalised EBIT, reaching $446.1 million for the first half of FY25, compared to the same period in FY24. This growth figure excludes one-off transaction costs related to the Chemist Warehouse deal. However, including these costs paints a more cautious picture. The company incurred $34.3 million in transaction-related expenses during Q3 alone, bringing total costs to $42.4 million for the nine-month period.

Following the announcement and its presentation at a key industry conference, Sigma's share price slipped by nearly 4% by midday AEST. The market response highlights a more complex narrative—investors seem to be digesting both the upside from the merger’s synergy and the financial toll of integration expenses.

Sigma Healthcare officially commenced trading as a newly merged entity on 13 February 2025, after completing its acquisition of Chemist Warehouse. This strategic consolidation was expected to bring scale advantages in distribution and retail presence across Australia’s competitive pharmaceutical landscape.

While the initial results showcase promising operating performance, the market appears to be weighing short-term costs and integration risks against long-term growth potential. This dynamic places Sigma within the spotlight for those tracking ASX200 movements, given the stock’s influence within the broader healthcare segment.

As the company continues to position itself within the evolving pharmaceutical and retail health sector, Sigma may also attract attention among those interested in ASX dividend stocks—particularly if the merger drives sustainable earnings growth and future dividend potential.

Looking ahead, Sigma is expected to provide a comprehensive financial picture when it reports full-year results in August. Until then, the market will likely continue to watch how post-merger efficiencies translate into long-term value and whether transaction-related drag continues to affect short-term sentiment.