Sigma Healthcare (ASX:SIG) cuts profit guidance

Sigma Healthcare has cut its earnings guidance for the 2022 financial year (ending January 2022), saying it now expects underlying EBITDA to be down around 10% compared with FY21.

It was only in September that the company said it had been expecting growth of 5% compared with FY21.

The company said the downgrade reflected a challenging second half of the financial year, which has been impacted by Short-term operational issues resulting from the roll-out of its Enterprise Resource Planning (ERP) have hit the second half of the year while these issues were compounded by the protracted COVID-19 impacts.

Sigma’s interim chief financial officer Jeff Sells said “A total ERP upgrade is a significant change management program for any company, and whilst we reached go-live on this project broadly on budget and on time through a pandemic, we have faced additional challenges in the context of completing implementation through the height of COVID-19 restrictions”

“Unfortunately, this has had some significant impacts on our customers and we are rectifying these issues as quickly as possible.”

Mr Sells also warned the issues had affected sales in FY22 and would likely flow through to FY23 sales. 

Shares in Sigma Healthcare (ASX:SIG) are trading 6.7 per cent lower at $0.49.