Sigma hit by Harrison’s
July 26, 2013
Sigma Pharmaceuticals this
morning announced that it expects
to increase its provision for bad and
doubtful debts, with the company
owed about $9 million from the
receivership of the Harrisons Group
of pharmacies.
Since Deloitte was appointed as
receivers to Harrisons in March,
Sigma has been “vigorously
pursuing its Purchase Money
Security Interest Claim (retention
of title),” but according to an ASX
update says it’s unlikely that it will
fully recover the amounts owing.
The announcement also includes
details of a $4 million charge
relating to litigation over the
injectable iron product, Ferrosig.
Proceedings by Vifor
(International) Limited commenced
in 2008, and the product and the
legal action remained with Sigma
after its sale of the pharmaceutical
business to Aspen.
The matter has now been settled,
with the $4m impact, which
includes associated legal costs, to
be included in Sigma’s upcoming
half year accounts.
Sigma says it has retained the
right to sell the Ferrosig product in
the Australian market.
The company said that trading in
the first half has continued to be in
line with expectations, with sales
slightly stronger than last year.
However the reported profit
result is likely to be lower than the
previous corresponding period “as
a result of a higher cost base arising
from investment in key areas of the
business including Multi Channel”.
Sigma said that excluding the
impact of the Ferrosig litigation
and the Harrison’s receivership,
its “underlying full year EBIT” is
anticipated to be up on 2012/13.
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