Chemist Warehouse delivers record half-year results ahead of Sigma mega-merger

Chemist Warehouse has delivered record half-year sales ahead of its mega-merger with Sigma Healthcare that will catapult the privately-held pharmacy giant onto the Australian Securities Exchange.

Chemist Warehouse on Tuesday revealed total retail network sales hit $5.15 billion in the six months to the end of December, up from the $4.56b recorded in the same period the prior year.

Chief executive Mario Verrocchi said Chemist Warehouse delivered a record result for the first-half of the 2025 financial year, with double-digit like-for-like sales growth at 10.3 per cent. He said this was aided by a strong trading performance in December.

“We have executed well on the commitments we made in September to deliver sustained growth through new franchise store openings and international expansion while implementing new supply agreements to drive efficiencies,” Mr Verrocchi said in a statement lodged with the ASX by Sigma.

“We made good progress in transitioning wholesale supply to Sigma to drive efficiency gains and launched Wagner Pharma.

“We also successfully launched the new Messi men’s fragrance which delivered strong sales during the period, demonstrating our ability to innovate and support partners’ brands.”

Earnings before interest and tax rose 35 per cent to $437.9 million for the half, with earnings margin increasing from 18.3 per cent to 22.3 per cent.

Chemist Warehouse opened 36 new stores since the first-half of FY24, taking its total network to 658 across five geographies — including NZ, Ireland and China. It recently opened in Dubai.

“We enter 2025 with confidence and look forward to further growth and network expansion,’ Mr Verrocchi said.

The combined group will have a network of 880 franchised pharmacies across Australia and own brands Chemist Warehouse, My Chemist, Amcal and Discount Drug Stores.

Sigma has previously forecast synergies of $60m a year after the first four years of the combined group.

The trading update from Chemist Warehouse comes a day before Sigma shareholders will vote on the merger, with the transaction expected to be completed in February.

The consumer watchdog at the end of last year decided it would not oppose the deal, rejecting fears it would reduce competition in the lucrative retail space.

The Australian Competition and Consumer Commission had initially thought the tie-up would reduce competition in pharmacy retailing by removing the price pressure Chemist Warehouse and Sigma stores imposed on each other and lead to higher prices for customers.

Sigma offered concessions to get the deal over the line. It offered a court-enforceable undertaking that would allow franchisees who joined the pharmacy retailer’s network before January 1 to terminate their agreements without penalties, for a period of three years.

It would also place restrictions on the collection, use and disclosure of confidential data from Sigma wholesale customers and franchisees.

Sigma shares closed up 12.2 per cent to $3.03 on Tuesday.

Ord Minnett senior research analyst Tom Godfrey said with deal implementation due February 12, the combined group is set to establish itself as the No.1 vertically-integrated pharmacy group in Australia.