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AIP: ADCOCK INGRAM HOLDINGS LIMITED - Unaudited group interim results for the six months ended 31 December 2016 and cash dividend declaration
AIP: ADCOCK INGRAM HOLDINGS LIMITED - Unaudited group interim resultsfor the six months ended 31 December 2016 and cash dividend declaration
Unaudited group interim resultsfor the six months ended 31 December 2016 and cash dividend declaration
ADCOCK INGRAM HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2007/016236/06)
Income tax number 9528/919/15/3
Share code: AIP    ISIN: ZAE000123436
("Adcock Ingram" or "the Company" or "the Group")
UNAUDITED GROUP INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2016
AND CASH DIVIDEND DECLARATION
SALIENT FEATURES
Total operations:
Basic earnings per share increases 70%
Headline earnings per share increases 49%
Continuing operations:
Turnover increases 11% to R2,979 million
Gross profit improves 11% to R1,074 million
Trading profit increases 22% to R342 million
Headline earnings per share from continuing operations increases 52%
Dividend declared: 63 cents per share
10th most empowered company on the JSE according to Empowerdex survey
INTRODUCTION
The Board is pleased to report that the Group's long standing, continuing business operations, posted encouraging growth and extremely
satisfying profits for the six-month period ended 31 December 2016. Having finally disposed of the Group's Indian sales and marketing
business and the majority stake in the Ghanaian enterprise in this period, and having effectively dealt with all other inherited
underperforming assets, since control of Adcock Ingram changed in 2014, the restructured business starts to reveal the positive impact and
favourable direction that a cleansed Adcock Ingram is capable of delivering, now under a fully focused leadership team, in conjunction with a
restructured and committed management in each of the divisional units.
Under such circumstances, each of the business units, posted solid performances, achieving good growth in turnover, optimally balanced with
good cost control. This pattern of activity yielded exceptional growth in trading profits. It is also pleasing to report that the deliberate emphasis
now placed on customer service, coupled with the more focused effort on sales and marketing, resulted in meaningful market share gains in
many of the Group's principal brands, regularly measured and reported on by IMS and Nielsen.
FINANCIAL PERFORMANCE OF CONTINUING OPERATIONS
Turnover and Profits
Group turnover during the period under review increased by 11.2% to R2,979 million. Apart from volume growth of approximately 4.8%, the
remaining components within the turnover growth include two single exit price (SEP) increases during the year, in aggregate approximately
6.4%. The 4.8% volume growth is an encouraging indicator, given that IMS reports market growth in the sector at less than 1% on a moving-
annual-turnover basis. The gross profit percentage maintained a satisfactory level, declining marginally from 36.3% to 36.1%.
Operating expenses were well controlled and increased by only 5.9%, resulting in a 22.4% improvement in trading profit to R342 million (Dec 2015:
R279 million).
Non-trading expenses
Non-trading expenses of R19.2 million include share-based expenses of R13.8 million and corporate activity costs of R5.4 million. The prior
period comparative of R41.0 million included the one-off IFRS 2 charge of R20.8 million related to the implementation of the July 2015 B-BBEE scheme.
Net finance costs and headline earnings
Net finance costs decreased from R38.8 million in the prior period to R17.5 million, following the reduction in the Group's overall net debt since June 2016.
Headline earnings from continuing operations for the period under review amounted to R241.0 million (Dec 2015: R159.0 million). This
translates into headline earnings per share of 144.9 cents (Dec 2015: 95.1 cents), an increase of 52%.
BUSINESS OVERVIEW
OTC turnover improved by 16.2% over the prior comparative period, supported by increased volumes during the winter season and
encouraging demand in the tender and export markets. Top brands including Allergex, Citro-Soda, Alcophyllex, Dilinct and Adco-Linctopent,
all showed double-digit growth. Analgesic brands containing codeine, achieved very low growth following a change in regulation for these
products. This business unit, which focuses on products in pain, coughs, colds and flu, and anti-histamine therapeutic areas through the
pharmacy channel, posted growth well ahead of the market as measured by IMS in the categories in which it competes.
Despite the punitive impact of the exchange rate and a detectable change in consumer buying patterns to smaller pack sizes, trading profit
increased by 13.2% to R145.6 million (Dec 2015: R128.6 million). The division acquired Brolene Eye Drops and Stop-Allerg Eye Drops from Genop
Healthcare Proprietary Limited and commenced marketing these brands in October 2016. These brands will augment the division's existing
ophthalmology product offering. In addition, Asic, Complenatal and Totonik were purchased from Pharmaceutical Enterprises Proprietary
Limited towards the end of the reporting period. Asic is a well-respected anti-nausea product for pregnant women.
Prescription turnover improved by 13.0% to R1 008.6 million (Dec 2015: R892.4 million) aided by the SEP increases. This division achieved
double digit growth in the private market segment as measured by IMS. A gross margin improvement was realised in this period, driven by an
advantageous sales mix. Trading profit of R116.5 million is well ahead (33.8%) of the trading profit in the comparative period of R87.1 million. In
July 2016, this division obtained the sales and promotional rights for the Astellas dermatology range, through our partner Leo Pharmaceuticals.
Consumer turnover of R334.8 million is only marginally ahead of the comparable period. The division faced a challenging
economic environment, where discretionary spend remains under pressure. According to Nielsen's, Panado, Compral and Bioplus continued
to outgrow the product segments in which they compete. Good cost control in this business unit enabled trading profits to increase by 24.5%
to R52.4 million (Dec 2015: R42.1 million). This division has been actively seeking acquisitions and with effect from March 2017, the division will
own and market the ISLAND TRIBE range of sunscreen products. Intellectual property has also been acquired for a dermatologist-formulated
hand and body treatment range, to be launched under the DERM-A-SOOTHE brand name.
Hospital turnover increased by 5.8% to R662.4 million (Dec 2015: R626.2 million) with all product categories achieving growth over the prior
period. Trading profits increased to R27.0 million (Dec 2015: R21.6 million). The division secured the commercial rights to the Pharma-Q
range of products in South Africa in December 2016 and has recently commenced marketing the range on behalf of Pharma-Q.
The Group's enterprises in Zimbabwe and Kenya have for some time underperformed in challenging markets. These entities fortunately
constitute a very small percentage of Group assets and collectively incurred a trading loss of R0.9 million during the period under review.
The OTC Division has taken responsibility for managing the Kenyan operation and we accordingly expect that the business will stabilise and
hopefully improve its performance.
CHANGES TO THE BOARD AND IN DIRECTORS' FUNCTIONS
On 25 August 2016, Ms Basadi Letsoalo was appointed Executive Director: Human Capital and Transformation and on 24 November 2016, Dr
Claudia Manning and Mr Lindsay Ralphs were appointed as non-executive directors.
Mr Roshan Morar retired by rotation and did not offer himself for re-election as a non-executive director.
PROSPECTS
The Adcock Ingram Group is today a well-managed, reliable, reputable and well capitalised pharmaceutical manufacturer, supplier and
distributor in South Africa, which is well placed to continue its immediate past trend of performance, fulfilling its potential to
maintain its current growth path.
Given the Group's healthy cash resources, management and the Board will maintain the intention to expand the Group's product
portfolio, through partnership arrangements, acquisition or otherwise, particularly in non-regulated product classes.
Shareholders can be assured of the Group's intention to continue its effort to enhance the equity of the Company's products and brands, build
its customer relationships and maintain its service levels within each of the operating divisions.
CASH DIVIDEND
The Board has declared an interim gross dividend out of income reserves of 63 cents per share in respect of the six months ended 
31 December 2016. The South African dividend tax ("DT") rate is 15% and the net dividend payable to shareholders who are not exempt from DT
is 53.55 cents per share. Adcock Ingram currently has 175 748 048 ordinary shares in issue of which 149 905 089 qualify for ordinary dividends.
The income tax reference number is 9528/919/15/3.
The salient dates for the distribution are detailed below:
Last date to trade cum distribution                                                                            Tuesday, 14 March 2017
Shares trade ex distribution                                                                                 Wednesday, 15 March 2017
Record date                                                                                                     Friday, 17 March 2017
Payment date                                                                                                    Monday, 20 March 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 15 March 2017 and Friday, 17 March 2017, both dates
inclusive.
CD Raphiri                                                                  AG Hall
Chairman                                                                    Chief Executive Officer
21 February 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                                             Unaudited                 Unaudited
                                                                                            six months                six months        Audited
                                                                                                 ended                     ended     year ended
                                                                                           31 December               31 December        30 June
                                                                                                  2016                      2015           2016
Continuing operations                                                             Note           R'000   Change            R'000          R'000
REVENUE                                                                              2       2 985 469      11%        2 683 548      5 559 896
Turnover                                                                             2       2 978 517      11%        2 677 571      5 545 610
Cost of sales                                                                              (1 904 062)               (1 706 320)    (3 516 089)
Gross profit                                                                                 1 074 455      11%          971 251      2 029 521
Selling, distribution and marketing expenses                                                 (521 861)       6%        (490 459)    (1 004 534)
Fixed and administrative expenses                                                            (210 695)       5%        (201 535)      (419 293)
Trading profit                                                                                 341 899      22%          279 257        605 694
Non-trading expenses                                                                 3        (19 236)                  (40 985)       (52 449)
Operating profit                                                                               322 663      35%          238 272        553 245
Finance income                                                                       2           4 071                     1 483          5 107
Finance costs                                                                                 (21 578)                  (40 255)       (76 888)
Dividend income                                                                      2           2 881                     4 494          9 179
Equity-accounted earnings                                                                       34 160                    26 177         59 288
Profit before taxation                                                                         342 197      49%          230 171        549 931
Taxation                                                                                      (97 596)                  (67 461)      (170 547)
Profit for the period/year from continuing operations                                          244 601      50%          162 710        379 384
Profit/(Loss) after taxation for the period/year from discontinued
operations                                                                           4          41 132                     9 782      (200 242)
Profit for the period/year                                                                     285 733      66%          172 492        179 142
Other comprehensive income which will subsequently be recycled
to profit or loss                                                                             (38 574)                   204 043        107 129
Exchange differences on translation of foreign operations:
- Continuing operations                                                                        (3 389)                    10 568          8 121
- Joint venture and associate                                                                 (16 918)                    40 251         23 372
- Discontinued operations                                                                     (21 353)                   142 339         89 071
Fair value loss on available-for-sale asset, net of tax                                              -                         -          (588)
Profit on sale of shares                                                                             -                     1 067          1 067
Movement in cash flow hedge accounting reserve, net of tax                                       3 086                     9 818       (13 914)
Other comprehensive income recycled to profit and loss                                       (125 784)                         -              -
Other comprehensive income which will not be recycled to profit or loss
Actuarial profit on post-retirement medical liability                                                -                         -          6 079
Total comprehensive income for the period/year, net of tax                                     121 375                   376 535        292 350
Profit attributable to:
Owners of the parent                                                                           280 943                   166 662        168 801
Non-controlling interests                                                                        4 790                     5 830         10 341
                                                                                               285 733                   172 492        179 142
Total comprehensive income attributable to:
Owners of the parent                                                                           118 724                   367 363        279 736
Non-controlling interests                                                                        2 651                     9 172         12 614
                                                                                               121 375                   376 535        292 350
Continuing operations:
Basic earnings per ordinary share (cents)                                                        144.9      53%             94.9          223.6
Diluted basic earnings per ordinary share (cents)                                                144.9      53%             94.8          223.6
Headline earnings per ordinary share (cents)                                                     144.9      52%             95.1          226.1
Diluted headline earnings per ordinary share (cents)                                             144.9      53%             94.9          226.1
Discontinued operations:
Basic earnings/(loss) per ordinary share (cents)                                                  24.0                       4.7        (122.2)
Diluted basic earnings/(loss) per ordinary share (cents)                                          24.0                       4.7        (122.2)
Headline earnings per ordinary share (cents)                                                       3.7                       4.7            2.6
Diluted headline earnings per ordinary share (cents)                                               3.7                       4.7            2.6
Total operations:
Basic earnings per ordinary share (cents)                                                        168.9      70%             99.6          101.4
Diluted basic earnings per ordinary share (cents)                                                168.9      70%             99.5          101.4
Headline earnings per ordinary share (cents)                                                     148.6      49%             99.8          228.7
Diluted headline earnings per ordinary share (cents)                                             148.6      49%             99.6          228.7
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                            Attributable to holders of the parent                                            
                                                              Non-distributable reserves                                                        
                                                                                                                Total                             
                                  Issued                                      Discontinued               attributable          Non-               
                                   share     Share        Continuing            operations    Retained    to ordinary   controlling               
                                 capital   premium        operations         held-for-sale      income   shareholders     interests       Total   
                                   R'000     R'000             R'000                 R'000       R'000          R'000         R'000       R'000   
As at 1 July 2015                 16 888   512 938           505 000                         1 982 589      3 017 415        99 509   3 116 924   
Share issue                            1       189                                                                190                       190   
Transfer to discontinued                                                                                                                          
operations                                                  (58 200)                58 200                                                        
Movement in share-based                                                                                                                           
Payment reserve                                                8 745                                            8 745                     8 745   
Implementation of BEE scheme         258   153 746                                            (44 587)        109 417      (79 883)      29 534   
Total comprehensive income                                    61 704               138 997     166 662        367 363         9 172     376 535   
Profit for the period                                                                          166 662        166 662         5 830     172 492   
Other comprehensive income                                    61 704               138 997                    200 701         3 342     204 043   
Dividends                                                                                    (117 952)      (117 952)                 (117 952)   
Balance at 31 December 2015                                                                                                                       
(unaudited)                       17 147   666 873           517 249               197 197   1 986 712      3 385 178        28 798   3 413 976   
Movement in share-based                                                                                                                           
Payment reserve                                                3 833                                            3 833                     3 833   
Acquisition of non-controlling                                                                                                                    
Interests in Ayrton drug                                                                                                                          
Manufacturing limited                                                                              (1)            (1)           (1)         (2)   
Total comprehensive income                                  (37 567)              (52 199)       2 139       (87 627)         3 442    (84 185)   
Profit for the period                                                                            2 139          2 139         4 511       6 650   
Other comprehensive income                                  (37 567)              (52 199)                   (89 766)       (1 069)    (90 835)   
Dividends                                                                                     (72 810)       (72 810)       (6 215)    (79 025)   
Balance at 30 June 2016                                                                                                                           
(audited)                         17 147   666 873           483 515               144 998   1 916 040      3 228 573        26 024   3 254 597   
Movement in share-based                                                                                                                           
Payment reserve                                               10 030                                           10 030                    10 030   
Total comprehensive income                                  (17 221)             (144 998)     280 943        118 724         2 651     121 375   
Profit for the period                                                                          280 943        280 943         4 790     285 733   
Other comprehensive income                                  (17 221)             (144 998)                  (162 219)       (2 139)   (164 358)   
Disposal of business                                                                                                       (18 465)    (18 465)   
Dividends                                                                                     (78 635)       (78 635)                  (78 635)   
Balance at 31 December 2016                                                                                                                       
(unaudited)                       17 147   666 873           476 324                     -   2 118 348      3 278 692        10 210   3 288 902   
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                                                                                            Unaudited     Unaudited     Audited   
                                                                                                          31 December   31 December     30 June   
                                                                                                                 2016          2015        2016   
                                                                                                                R'000         R'000       R'000   
ASSETS                                                                                                                                            
Property, plant and equipment                                                                               1 388 767     1 471 029   1 423 173   
Intangible assets                                                                                             321 731       283 934     276 070   
Deferred tax                                                                                                    7 621         3 542       8 129   
Other financial assets                                                                                         47 365        84 420      74 310   
Investment in joint ventures                                                                                  360 124       337 907     354 139   
Investment in associate                                                                                         6 002             -           -   
Non-current assets                                                                                          2 131 610     2 180 832   2 135 821   
Inventories                                                                                                 1 122 507     1 292 841   1 167 005   
Trade and other receivables                                                                                 1 482 743     1 394 038   1 398 501   
Cash and cash equivalents                                                                                     634 567       192 115     200 555   
Taxation receivable                                                                                                 -        63 987      84 087   
Current assets                                                                                              3 239 817     2 942 981   2 850 148   
Assets classified as held-for-sale                                                                                  -       828 560     610 638   
Total current assets                                                                                        3 239 817     3 771 541   3 460 786   
Total assets                                                                                                5 371 427     5 952 373   5 596 607   
EQUITY AND LIABILITIES                                                                                                                            
Capital and reserves                                                                                                                              
Issued share capital                                                                                           17 147        17 147      17 147   
Share premium                                                                                                 666 873       666 873     666 873   
Non-distributable reserves - Continuing operations                                                            476 324       517 249     483 515   
                           - discontinued operations held-for-sale                                                  -       197 197     144 998   
Retained income                                                                                             2 118 348     1 986 712   1 916 040   
Total shareholders' funds                                                                                   3 278 692     3 385 178   3 228 573   
Non-controlling interests                                                                                      10 210        28 798      26 024   
Total equity                                                                                                3 288 902     3 413 976   3 254 597   
Long-term borrowings                                                                                          300 000       507 260     500 000   
Post-retirement medical liability                                                                              17 132        22 935      16 994   
Deferred tax                                                                                                   75 878        78 213      75 868   
Non-current liabilities                                                                                       393 010       608 408     592 862   
Trade and other payables                                                                                    1 601 265     1 303 447   1 567 382   
Bank overdraft                                                                                                 10 078       421 008      11 755   
Short-term borrowings                                                                                               -        16 636           -   
Provisions                                                                                                     65 337        61 588      69 906   
Taxation payable                                                                                               12 835             -           -   
Current liabilities                                                                                         1 689 515     1 802 679   1 649 043   
Liabilities classified as held-for-sale                                                                             -       127 310     100 105   
Total current liabilities                                                                                   1 689 515     1 929 989   1 749 148   
Total equity and liabilities                                                                                5 371 427     5 952 373   5 596 607   
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                            Unaudited     Unaudited     Audited   
                                                                                                           six months    six months        year   
                                                                                                                ended         ended       ended   
                                                                                                          31 December   31 December     30 June   
                                                                                                                 2016          2015        2016   
                                                                                                                R'000         R'000       R'000   
Cash flows from operating activities                                                                                                              
Operating profit from continuing operations                                                                   322 663       238 272     553 245   
Operating profit/(loss) from discontinued operations (note 4.1)                                                 8 416        11 065   (198 712)   
Operating profit                                                                                              331 079       249 337     354 533   
Other adjustments and non-cash items                                                                          102 532       113 628     472 839   
Operating profit before working capital changes                                                               433 611       362 965     827 372   
Working capital changes                                                                                      (65 997)      (93 249)     113 752   
Cash generated from operations                                                                                367 614       269 716     941 124   
Finance income received                                                                                         5 344         4 504      17 249   
Finance costs paid                                                                                           (24 696)      (44 050)    (86 689)   
Dividend income received                                                                                       18 268        19 150      23 835   
Dividends paid                                                                                               (78 635)     (117 952)   (196 977)   
Taxation paid                                                                                                 (1 452)      (52 075)   (176 421)   
Net cash inflow from operating activities                                                                     286 443        79 293     522 121   
Cash flows from investing activities                                                                                                              
Decrease in other financial assets                                                                             26 945         6 686      11 961   
Disposal of business (note 4.3)                                                                               291 096             -           -   
Purchase of property, plant and equipment - Expansion                                                         (2 450)      (25 454)    (34 650)   
                                          - replacement                                                      (33 029)      (18 762)    (60 792)   
Purchase of intangible assets                                                                                (45 822)             -           -   
Proceeds on disposal of property, plant and equipment                                                           1 931           137         486   
Proceeds on disposal of intangibles                                                                                 -             -       2 009   
Disposal of non-controlling interest in blue falcon trading proprietary limited                                     -      (11 616)    (11 616)   
Net cash inflow/(outflow) from investing activities                                                           238 671      (49 009)    (92 602)   
Cash flows from financing activities                                                                                                              
Acquisition of non-controlling interests in Ayrton drug manufacturing limited                                       -             -         (2)   
Proceeds from issue of share capital                                                                                -           190         190   
Proceeds from sale of shares                                                                                        -        30 410      30 410   
Increase in borrowings                                                                                          7 822             -           -   
Repayment of borrowings                                                                                     (200 000)       (2 932)    (19 816)   
Net cash (outflow)/inflow from financing activities                                                         (192 178)        27 668      10 782   
Net increase in cash and cash equivalents                                                                     332 936        57 952     440 301   
Net foreign exchange difference on cash and cash equivalents                                                  (2 909)        19 983      10 992   
Cash and cash equivalents at beginning of period/year                                                         294 462     (156 831)   (156 831)   
Cash and cash equivalents at end of period/year                                                               624 489      (78 896)     294 462   
Split as follows:                                                                                                                                 
Cash and cash equivalents                                                                                     634 567       192 115     200 555   
Bank overdraft                                                                                               (10 078)     (421 008)    (11 755)   
Net cash position per statement of financial position                                                         624 489     (228 893)     188 800   
Cash at banks attributable to discontinued operations                                                               -       149 997     105 662   
Cash and cash equivalents at end of period/year                                                               624 489      (78 896)     294 462   
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1   BASIS OF PREPARATION
1.1 Introduction
    The abridged unaudited interim results for the six months ended 31 December 2016 have been prepared in compliance with the Listings
    Requirements of the JSE Limited, International Financial Reporting Standards (IFRS), the requirements of the International Accounting
    Standards, IAS 34: Interim financial reporting, SAICA Financial Reporting Guidelines as issued by the Accounting Practices Committee and
    Financial Pronouncements as issued by the Financial Reporting Standards Council and the Companies Act, No. 71 of 2008. The Board of
    directors take full responsibility for the set of financial results which have been prepared by Ms Dorette Neethling, Chief Financial Officer.
1.2 Changes in accounting policies
    The accounting policies adopted are consistent with those of the previous financial year except for the adoption of the following amended
    IFRS standards and interpretations during the year which did not have any effect on the financial performance or position of the Group:
    *IFRS 11: Joint Arrangements - Accounting for acquisition of interests in Joint Operations
    *IAS 1: Presentation of Financial Statements - Disclosure initiative amendments
                                                                                                            Unaudited     Unaudited     Audited   
                                                                                                           six months    six months        year   
                                                                                                                ended         ended       ended   
                                                                                                          31 December   31 December     30 June   
                                                                                                                 2016          2015        2016   
                                                                                                                R'000         R'000       R'000   
2   REVENUE
    Turnover                                                                                                2 978 517     2 677 571   5 545 610   
    Finance income                                                                                              4 071         1 483       5 107   
    Dividend income - black managers share trust                                                                2 881         4 494       9 179   
                                                                                                            2 985 469     2 683 548   5 559 896   
3   NON-TRADING EXPENSES
    Impairments                                                                                                     -         1 356       8 638   
    Transaction costs                                                                                           5 469         3 731       3 892   
    Share-based payment expenses                                                                               13 767        35 898      39 919   
                                                                                                               19 236        40 985      52 449   
4   DISCONTINUED OPERATIONS
    During the year ended 30 June 2016, the Board had resolved to dispose of:
  
    - Adcock Ingram Private Limited (India); and
    - Ayrton Drug Manufacturing Limited (Ayrton) in Ghana.
  
    This resulted in the above businesses being classified and accounted for as a disposal group held-for-sale during the previous financial
    year. India was disposed of on 14 October 2016 and 53.47% of Ayrton on 7 December 2016, with the Group retaining a 25.1% minority
    share in Ayrton. The loss of control on disposal resulted in the foreign currency translation reserve relating to both entities being recycled
    to profit and loss.
                                                                                                            Unaudited     Unaudited     Audited   
                                                                                                           six months    six months        year   
                                                                                                                ended         ended       ended   
                                                                                                          31 December   31 December     30 June   
                                                                                                                 2016          2015        2016   
                                                                                                                R'000         R'000       R'000   
4.1 STATEMENT OF COMPREHENSIVE INCOME                                                                                                             
    REVENUE                                                                                                   120 174       192 941     412 289   
    Turnover                                                                                                  118 901       189 459     403 892   
    Cost of sales                                                                                            (47 191)      (80 728)   (175 204)   
    Gross profit                                                                                               71 710       108 731     228 688   
    Selling, distribution and marketing expenses                                                             (39 077)      (67 959)   (143 210)   
    Fixed and administrative expenses                                                                        (17 384)      (23 257)    (53 883)   
    Trading profit                                                                                             15 249        17 515      31 595   
    Non-trading expenses (refer (a))                                                                          (6 833)       (6 450)   (230 307)   
    Operating profit/(loss)                                                                                     8 416        11 065   (198 712)   
    Finance income                                                                                              1 273         3 482       8 397   
    Finance costs                                                                                             (2 014)       (4 765)     (8 574)   
    Profit/(Loss) before taxation                                                                               7 675         9 782   (198 889)   
    Taxation                                                                                                  (1 301)             -     (1 353)   
    Profit/(Loss) for the period/year from discontinued operations                                              6 374         9 782   (200 242)   
    Profit on disposal of the discontinued operation                                                           34 758             -           -   
    Profit/(Loss) for the period/year from discontinued operations                                             41 132         9 782   (200 242)   
    Profit/(Loss) attributable to:                                                                                                                
    India                                                                                                      46 638         2 075   (139 583)   
    Ayrton                                                                                                    (5 506)         7 707    (60 659)   
                                                                                                               41 132         9 782   (200 242)   
    Profit/(Loss) attributable to:                                                                                                                
    owners of the parent                                                                                       39 903         7 884   (203 403)   
    non-controlling interests                                                                                   1 229         1 898       3 161   
                                                                                                               41 132         9 782   (200 242)   
a.  Non-trading expenses                                                                                                                          
    Impairment of assets transferred to held-for-sale                                                               -             -     207 971   
    India                                                                                                           -             -     135 012   
    Ayrton                                                                                                          -             -      72 959   
    Transaction costs                                                                                           6 833         6 450      22 656   
    Profit on sale of intangible asset                                                                              -             -       (320)   
                                                                                                                6 833         6 450     230 307   
                                                                                                         Unaudited        Unaudited     Audited
                                                                                                        six months       six months        year
                                                                                                             ended            ended       ended
                                                                                                       31 December      31 December     30 June
                                                                                                              2016             2015        2016
                                                                                                             R'000            R'000       R'000
4.2 STATEMENT OF FINANCIAL POSITION
    Details of assets and liabilities transferred to held-for-sale:
    ASSETS
    Property, plant and equipment                                                                                            14 798      19 234
    Intangible assets                                                                                                       556 060     381 109
    Inventories                                                                                                              39 840      32 757
    Trade and other receivables                                                                                              67 865      56 660
    Taxation receivable                                                                                                           -       2 114
    Cash and cash equivalents                                                                                               149 997     118 764
    Total assets                                                                                                            828 560     610 638
    LIABILITIES
    Long-term borrowings                                                                                                      5 868       5 464
    Short-term borrowings                                                                                                         -       5 971
    Bank overdraft                                                                                                                -      13 102
    Trade and other payables                                                                                                118 126      71 733
    Provisions                                                                                                                3 316       3 835
    Total liabilities                                                                                                       127 310     100 105
    Net assets/(liabilities) classified as held-for-sale
    India                                                                                                                   701 250     527 174
    Ayrton                                                                                                                        -    (16 641)
    Net assets                                                                                                              701 250     510 533
    Foreign currency translation reserve related to assets classified as held-for-sale:                                   (252 688)   (148 663)
    India                                                                                                                 (252 688)   (203 987)
    Ayrton                                                                                                                        -      55 324
    Share issue expenses related to assets classified as held-for-sale (India)                                                    -       3 665
    Net assets                                                                                                              448 562     365 535
4.3 CASH INFLOW ON DISPOSAL
    Consideration received                                                                                 338 601
    India                                                                                                  327 565
    Ayrton                                                                                                  11 036
    Net cash disposed of with the discontinued operations                                                 (47 505)
    India                                                                                                 (48 807)
    Ayrton                                                                                                   1 302
    Net cash inflow                                                                                        291 096
4.4 CASH FLOW STATEMENT
    Included in the Group's consolidated statement of cash flows are cash flows from the
    Indian and Ayrton discontinued operations. These cash flows are included in operating,
    Investing and financing activities as follows:
    Cash inflow/(outflow) from operating activities                                                         19 487            5 800     (6 061)
    Cash inflow/(outflow) from investing activities                                                            744          (1 199)     (1 962)
    Cash outflow from financing activities                                                                (78 388)          (4 825)     (8 419)
    Net cash outflow                                                                                      (58 157)            (224)    (16 442)
                                                                                                         Unaudited               Unaudited      Audited
                                                                                                        six months              six months         year
                                                                                                             ended                   ended        ended
                                                                                                       31 December             31 December      30 June
                                                                                                              2016                    2015         2016
                                                                                                             R'000    Change         R'000        R'000
5   SEGMENT REPORTING
    Turnover
    Continuing operations:
    Southern Africa                                                                                      2 890 382       11%     2 608 213    5 388 857
    OTC                                                                                                    884 568       16%       761 465    1 668 438
    Consumer                                                                                               334 849        2%       328 122      662 981
    Prescription                                                                                         1 008 586       13%       892 380    1 830 669
    Hospital                                                                                               662 379        6%       626 246    1 226 769
    Rest of Africa and India *                                                                              107 544                  84 272      193 693
    Less: Inter-company sales                                                                             (19 409)                (14 914)     (36 940)
                                                                                                         2 978 517               2 677 571    5 545 610
    Discontinued operations:    
    India                                                                                                   67 206                 114 614      258 936
    Rest of Africa (Ghana)                                                                                  51 695                  74 845      144 956
                                                                                                           118 901                 189 459      403 892
    Trading and operating profit    
    Continuing operations:    
    Southern Africa                                                                                        341 527        22%      279 318      607 043
    OTC                                                                                                    145 626        13%      128 642      310 022
    Consumer                                                                                                52 385        25%       42 050       90 476
    Prescription                                                                                           116 490        34%       87 054      171 453
    Hospital                                                                                                27 026        25%       21 572       35 092
    Rest of Africa and India *                                                                                 372                    (61)      (1 349)
    Trading profit                                                                                         341 899                 279 257      605 694
    Less: Non-trading expenses                                                                            (19 236)                (40 985)     (52 449)
    Operating profit                                                                                       322 663                 238 272      553 245
    Discontinued operations:    
    India                                                                                                    6 300                   4 190        7 269
    Rest of Africa (Ghana)                                                                                   8 949                  13 325       24 326
    Trading profit                                                                                          15 249                  17 515       31 595
    Less: Non-trading expenses                                                                             (6 833)                 (6 450)    (230 307)
    Operating profit/(loss)                                                                                  8 416                  11 065    (198 712)
    Total assets    
    Continuing operations:    
    Southern Africa                                                                                      4 189 783               4 199 702    4 198 690
    OTC                                                                                                  1 546 192               1 442 263    1 556 402
    Consumer                                                                                               319 566                 350 916      325 800
    Prescription                                                                                         1 279 402               1 318 918    1 216 989
    Hospital                                                                                             1 044 623               1 087 605    1 099 499
    Rest of Africa                                                                                         143 491                 260 529      143 854
    India                                                                                                  236 789                 228 624      230 955
    Other - shared services                                                                                801 364                 434 958      412 470
                                                                                                         5 371 427               5 123 813    4 985 969
    Discontinued operations:    
    India                                                                                                        -                 828 560      584 844
    Rest of Africa (Ghana)                                                                                       -                       -       25 794
                                                                                                         5 371 427               5 952 373    5 596 607
    * Research and development services in India. 
   Source: JSE News Service (SENS)
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