Sigma Healthcare : Appendix 4E and Full Year Financial Report

Appendix 4E

Preliminary final report

Lodged with the Australian Securities Exchange (ASX) under ASX Listing Rule 4.3A.

Sigma Healthcare Limited

ABN 15 088 417 403

Reporting period Year ended 31 January 2019

Comparative period Year ended 31 January 2018

Results for announcement to the market

Group results	31 January 2019 $000	31 January 2018 $000	Change %
Sales revenue from ordinary activities	3,976,774	4,094,440	Down 2.9%
Net profit after tax (NPAT)	37,041	55,386	Down 33.1%
NPAT attributable to owners of the Company	36,520	55,059	Down 33.7%

Dividend information

Since the end of the year, the Directors have resolved to pay a final dividend of 2.0 cents per share fully franked, accordingly this dividend is not provided for in the balance sheet at 31 January 2019. The ex-dividend date is 3 April 2019, the record date is 4 April 2019 and it is expected to be paid on 29 April 2019.

Dividend	Amount per security	Franking percentage
Final dividend - year ended 31 January 2019 Interim dividend - year ended 31 January 2019 Final dividend - year ended 31 January 2018	2.0c 1.5c 2.5c	100% 100% 100%

Net tangible asset per security

31 January 2019	31 January 2018	Change %
Net tangible asset backing per ordinary share (cents)	36.7c	36.8c	Down 0.3%

Gain or loss of control over entities

No control over any material entities was gained or lost during the year ended 31 January 2019.

Details of associates and joint venture entities

There are no associates or joint ventures as at 31 January 2019.

Dividend reinvestment plans

The company does not currently have a dividend reinvestment plan in operation.

Other information

This report is based on the consolidated financial statements which have been audited by Deloitte. The financial report is not subject to a modified opinion, emphasis of matter or other matter paragraph.

Additional information supporting the Appendix 4E disclosure requirements, including a brief explanation of the figures above, can be found in the Directors' Report, notes to the consolidated financial statements in this report and the Full Year Media/ASX Release lodged with the ASX.

Reconciliation of reported vs underlying EBIT and EBITDA

31 January 2019	31 January 2018
$000	$000
Reported EBIT	63,028	83,747
Add: Reported depreciation and amortisation	13,522	9,087
Reported EBITDA	76,550	92,834
Add:
Restructuring and dual operating costs before tax	13,115	3,715
Litigation and due diligence costs before tax	863	3,199
Underlying EBITDA	90,528	99,748
Less: Reported depreciation and amortisation	(13,522)	(9,087)
Underlying EBIT	77,006	90,661
Less: Non-controlling interests before interest and tax	(855)	(409)
Underlying EBIT attributable to owners of the company	76,151	90,252
Reconciliation of reported and underlying NPAT
31 January 2019	31 January 2018
$000	$000
Reported NPAT attributable to owners of the company	36,520	55,059
Add:
Restructuring and dual operating costs after tax	9,180	2,601
Litigation and due diligence costs after tax	604	2,239
Underlying NPAT attributable to owners of the company	46,304	59,899
Shareholder information

Sigma will host a presentation to analysts and media on Thursday 21 March 2019 at 10.00am with all presentation material posted to Sigma's website(www.sigmahealthcare.com.au)

Further information can be obtained from Gary Woodford (Corporate Affairs Manager): [phone]

Note regarding non-IFRS financial information

Within the Directors' Report, the Group has included certain non-IFRS financial information. This information is presented to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. The Group uses these measures to assess the performance of the business and believes that the information is useful to investors.

The following non-IFRS measures have not been subject to audit or review but have been extracted from the Group's consolidated financial statements, which have been reviewed by the Group's external auditors:

• • Underlying EBITDA - Earnings before interest, tax, depreciation and amortisation adjusted for non-operating items

• • Underlying EBIT - Earnings before interest and tax adjusted for non-operating items

• • Underlying NPAT - Profit after income tax expense adjusted for non-operating items

These measures should be considered as supplements to the other reported measures in the financial statements that have been presented in accordance with the Australian Accounting Standards and not as a replacement for them.

A reconciliation of underlying EBITDA, underlying EBIT and underlying NPAT to the nearest measure prepared in accordance with IFRS is included in the Directors' report.

Full Year Financial Report

For the year ended 31 January 2019

Contents

Page

Corporate governance, environmental and social statements 5

Directors' Report 18

Operating and financial review 23

Remuneration Report 27

Auditor's independence declaration 47

Consolidated Financial statements

• • Consolidated statement of comprehensive income 48

• • Consolidated balance sheet 49

• • Consolidated statement of changes in equity 50

• • Consolidated statement of cash flows 51

Notes to the consolidated financial statements

• • About this report 52

Financial performance	Operating assets and liabilities	Capital structure and financing	Group structure	Other disclosures
Page 53 - 58	Page 59 - 65	Page 66 - 70	Page 71 - 75	Page 76 - 82
1. Segment information	8. Trade and other receivables	14. Contributed equity	18. Business acquisitions	24. Expenditure commitments
2. Sales and other revenue	9. Inventories	15. Reserves	19. Non-controlling interest	25. Auditors' remuneration
3. Expenses	10. Trade and other payables	16. Borrowings	20. Details of controlled entities	26. Guarantees
4. Taxation	11. Property, plant and equipment	17. Financial risk management	21. Related party disclosures	27. Key management personnel compensation
5. Earnings per share	12. Goodwill and other intangible assets	22. Parent company financial information	28. Employee share plans and share based payments
6. Dividends	13. Provisions and contingencies	23. Deed of cross guarantee	29. Notes to the statement of cash flows
7. Subsequent events	30. New accounting standards

Directors' declaration 83

Independent auditor's report 84

Shareholder information 88

Five-year summary 90

Corporate governance, environmental and social statements

Sigma Healthcare Limited (the Company) and its controlled entities (the Group) is committed to delivering high quality health care services, long-term sustainable growth and shareholder returns. The Board recognises the importance of governance, environmental and social matters to our shareholders, suppliers and customers.

1.

Corporate governance statement

The Directors and management of the Group are committed to ensuring that the Group's business is conducted in accordance with high standards of corporate governance. The board believes that, except where otherwise stated:

• • The Group's policies and practices comply in all material respects with the 3rd edition of the ASX Corporate Governance Council Principles and Recommendations ("ASX Principles and Recommendations"); and

• • During the year ended 31 January 2019, it has been compliant with the ASX Principles and Recommendations.

This Corporate governance statement was approved by the Board of Directors and is current as at 20 March 2019.

A checklist cross-referencing the ASX Principles and Recommendations to the relevant disclosures in this statement is provided at the end of this Corporate governance, environmental and social statements.

2.

Our Board

(a)

Role

The Board is primarily responsible for setting the strategic direction and corporate governance of the Sigma Group. The Board has adopted a Board Charter (published on the Company's website) which sets out the responsibilities of the Board and its structure and governance requirements. Under the Board Charter, the Board has the following responsibilities:

• • overseeing the management of Sigma;

• • reviewing and approving management's business plans and strategic opportunities;

• • succession planning;

• • appointment and annual evaluation of the CEO and Managing Director;

• • establishing strategic goals for management;

• • identifying the principal risks and overseeing appropriate control and management systems for them; and

• • monitoring Sigma's performance with the aim of maximising long-term returns to Sigma security holders at an acceptable level of risk.

Subject to the specific authorities reserved to the Board under the Board Charter, and the authorities delegated to the Board committees, the Board has delegated to the CEO responsibility for the management and operation of the Sigma Group. The CEO is responsible for the day-to-day operations, financial performance and administration of the Sigma Group within the powers authorised to him from time to time by the Board. The CEO may make further delegation within the delegations specified by the Board and is accountable to the Board for the exercise of those delegated powers.

Further details of Board responsibilities, objectives and structure are set out in the Board Charter on the Sigma website.

(b) Company Secretary

The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board, including agendas, Board papers and minutes, advising the Board and its Committees on governance matters, monitoring and ensuring that the Board and Committee policies and procedures are followed, communication with regulatory bodies and the ASX and statutory and other filings.

(c) Board composition

The Board currently consists of one Executive and six Non-Executive Directors, including the Chairman.

The Constitution authorises the Board to appoint Directors to vacancies and to elect the Chair. One third of Directors (excluding the CEO and a Director appointed to fill a casual vacancy and rounded down to the nearest whole number) must retire at every annual general meeting. Other than the CEO, no Director may remain in office for more than three years without resigning and standing for re-election. Any Director appointed by the Board must stand for election at the next annual general meeting of security holders.

Board support for directors retiring and seeking re-election is not automatic. Prior to each AGM, the Board determines whether it will recommend to security holders that they vote in favour of the re-election of each Non-Executive Director seeking election on a rotational basis with the Other Directors. Sigma provides security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a Non-Executive Director in the AGM notice of meeting.