Well placed to keep and increase market share, page-4

API's group Pipeline Pharmacy are more numerous and matching Chemist Warehouse with prescription pricing and provide a far more personal and caring service. Many young pharmacists who work for them dislike the Chemists Warehouse model and are largely disillusioned. Priceline stores generally have better shopping centre locations and will be more sustainable in the long term when the discount model runs out off puff. Discounting of prescriptions has been a strategy supported by the generics companies massive discounting in their fight for market share. Gov't policy with respect to price disclosure is to a degree levelling the playing field for all pharmacies. With margins on prescriptions under pressure the discount model will be unsustainable long term. I admire Chemist Warehouse marketing and their huge spend on advertising but I don't see how they can keep this up. I suspect that their rapid expansion has created a lot of debt which could put them at risk in the future.

As we can see from their improved profitability and strong hold on their market share I suspect API are very well position into the future. I hold both API and Sigma.