Weight-loss drugs a shot in the arm for Chemist Warehouse and Sigma Healthcare

Discount pharmacy juggernaut Chemist Warehouse has attributed its double-digit sales lift to the growing popularity of weight-loss drugs like Ozempic and Mounjaro, saying demand will only increase as the medications get cheaper.

Chemist Warehouse helped deliver a 14.9 per cent increase in half-year revenue to $5.5 billion for Sigma Healthcare, following their much-hyped merger last year.

Sigma chief executive Vikesh Ramsunder said Chemist Warehouse stores delivered a 17.2 per cent jump in sales in the six months to the end of December, with same-store sales up 15 per cent.

“GLP-1s . . . has helped boost (half-year) sales and you would expect that, it’s a new category, there’s great adoption of it in the marketplace,” Mr Ramsunder told analysts.

“I believe this is enduring . . . people that go onto this see the benefits of this. You’ve got to use it over the long-term and there’s further innovation coming in this category with regards to oral dosages.

“It’s here to stay and it will actually increase the market size over time as it becomes cheaper.”

GLP-1 drugs mimic a hormone the body produces to regulate hunger and blood sugar.

The injections cut cravings for food, slow digestion and keep people feeling full for longer periods of time.

Chemist Warehouse and Sigma shareholders last January overwhelmingly endorsed the mega tie-up, with Chemist Warehouse shareholders emerging with almost 86 per cent of the combined group.

The transaction was effectively a reverse takeover, with Chemist Warehouse investors becoming the majority owners of the transformed entity, which retained the Sigma name.

The business also includes the Amcal and Discount Drug Stores chains and has more than 5900 pharmacies across the nation, as well as operations in New Zealand, Ireland and Dubai.

The combined group’s bottom-line net profit rose by 22.6 per cent to $379.8 million, compared with the Chemist Warehouse-only result in the prior corresponding period.

During the half, Sigma added 13 more Chemist Warehouse stores, taking the total to 550, and has plans for a further nine in the second half of the year alongside 18 store refurbishments.

“Domestic growth remains our core,” Mr Ramsunder on Thursday said, adding the international business was also growing in prominence.

Sigma has 89 stores in New Zealand, Ireland and Dubai, the majority of which are in NZ.

Sigma’s local pharmacies have different markets, with the Chemist Warehouse and Discount Drugs chains appealing to Australia’s aging population and Amcal to a younger cohort of shoppers interested in beauty brands and ranges as well as pharmacy products.

“Our business model is scalable and captures all segments of the market,” Mr Ramsunder said.

“Work on uplifting the performance of the Amcal and DDS network continues, and is a multi-year journey, with progress already being made on product assortment and marketing.”

Sigma is ultimately aiming for 900 Chemist Warehouse stores, 300 Amcal pharmacies and more than 150 Discount Drugs Stores over a potential 15-year time frame, at the current run rate.

In the first seven weeks of the second half, sales for Chemist Warehouse were up 16.6 per cent.

Shares in Sigma, which declared an interim dividend of 2¢, jumped more than six per cent earlier in the day before closing down 1.7 per cent to $2.94.

- With AAP