The Adcock Ingram Group reports positive trading performance

Pills-pixabayThe Adcock Ingram Group is pleased to report a 20 percent increase in trading profit for the year ended 30 June 2018, particularly when considering the price-regulated environment in which it operates and the difficult economic conditions in South Africa.

Performance highlights from continuing operations

‘The positive results were achieved through continued investment in our well-established brands, improved factory efficiencies, and a relentless focus on customer service and product quality,’ says Andy Hall, chief executive officer.

A 10 percent increase in turnover to R6.5 billion rendered an improved gross profit which expanded as a percentage of sales to 39.2 percent from 37.8 percent in 2017. An improved product sales mix, a favourable exchange rate, and factory efficiencies, particularly in our Wadeville operation, were the major contributors to this achievement. Well controlled operating expenses (allowing for the additional expenditure consequent the Genop acquisition) contributed to a 20 percent improvement in trading profit which increased to R866 million (2017: R724 million). All commercial divisions showed an improvement in trading profit, with the Prescription, OTC and Hospital Divisions’ growth all above 15 percent. The Consumer division showed a muted trading profit growth of two percent which must be seen in the light of the challenging environment they’ve operated in, characterised by limited consumer discretionary spend.

Headline earnings for the year from continuing operations increased to R645 million compared to R514 million in the previous year. This translates into headline earnings per share from continuing operations of 387.7 cents, an improvement of 26 percent.

A dividend of 86 cents per share was declared by the Board for the year ended 30 June 2018 out of income reserves. The total dividend distribution for the year amounts to 172 cents per share, an increase of 24 percent over 2017.

The Group remains committed in seeking additional affordable brands to augment its range of products and defend its position in the market, as well as expand on its non-regulated portfolio to limit the impact of the extremely volatile exchange rate and an unfavourable single exit price environment.


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