Sigma Healthcare shares take off

Scott Olson/Getty Images

Shares in Sigma Healthcare jumped after the pharmacy supplier announced a negotiated settlement with Chemist Warehouse over a wholesale supply agreement dispute.

A short time ago, the shares were up 3.8% to $0.862.

As a result of this settlement, Sigma confirmed current year EBIT (earnings before interest and taxes) guidance of $90 million with 2019 expected to be at a similar level.

“Importantly, both parties are committed to a more constructive approach to discussions for a new agreement, with discussions expected to advance over the 2018 calendar year,” says Sigma CEO Mark Hooper.

Legal proceedings started in May after the privately-owned My Chemist/Chemist Warehouse Group, said to have national sales of about $2.7 billion, indicated it was going to source products from another wholesaler.

Sigma, which owns the Amcal and Guardian brands, maintained that My Chemist/Chemist Warehouse Group, under an agreement running to June 2019, is not entitled to acquire products from another wholesaler.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.