SIGMA Pharmaceuticals has made provision for a doubtful debt of around $8 million relating to a single pharmacy group (PD breaking news Fri), with the impact affecting the company's full year results to 31 Dec which will be released in a month's time.
According to an ASX announcement from ceo Mark Hooper, the bad debt, combined with a previously announced $11.4 million insurance premium recovery, will lead to an overall one-off accounting adjustment totalling almost $20 million.
"While Sigma continues to seek a resolution for the outstanding debt, it was considered prudent to provide for the full extent of our exposure," Hooper said.
Apart from the provision, underlying earnings for the company are expected to be just over $100 million, which is about 12% higher than last year.
"Whilst the one-off impacts are disappointing, Sigma's business is in good shape and we remain comfortable with our existing guidance of at least 5% underlying EBIT growth for the 2017/18 financial year even after delivering above guidance underlying growth for the current year," he said.
Details of the pharmacy group owing the money to Sigma were not made available.
MEANWHILE difficult trading conditions for pharmacy have been underlined by the appointment of administrators to two pharmacies in Rockhampton, Queensland.
The Terry White Chemmart and Priceline chemists located in the Stockland shopping centre were closed for two days last week, but reopened on Friday after administrators Andrew Schwartz and Matt Adams took over.
The pair said they were in discussions with parties interested in acquiring the businesses as a going concern.
A report in the Queensland Times cited PBS pressures and also suggested one of the pharmacies was paying rent of $70,000 a month.
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