Press Release Audited Group Results

Adcock Ingram Group 2015 year-end results reflect positive turnaround in trading performance – Dividend of 81 cents per share declared

Midrand - 26 August 2015

Performance highlights*
  • Turnover of R5.5 billion up 6.5%
  • Gross profit percentage increases from 33% to 38%
  • Trading profit more than doubles to R451 million
  • Net debt reduced by R398 million
  • Dividend of 81 cents per share declared
*Comparison based on reviewed set of comparative figures for the twelve months ended 30 June 2014

Focused leadership, a regenerated culture of productivity and divisional responsibility were some of the factors identified as having contributed to the overall improvement in performance and the return to profitability of the Adcock Ingram Group, when the full year 2015 results were announced today.

“The reorganisation of the South African business into divisions, each focused on a specific market segment and product range, has proved to be the right strategy,” said Kevin Wakeford, CEO of Adcock Ingram. “In order to realise improved business results, this change was essential to put a widely diversified company on the road to recovery and to restore profitability.”

Turnover increased by 6.5% to R5,528 million from R5,193 million in the comparative twelve months. Equally encouraging is the turnaround in gross margin, showing an improvement as a percentage of sales from 33% to 38% in the current period, attributed to increased factory throughput and efficiencies, a stringent focus on procurement and an improved sales mix. The knock-on effect to trading profit after reasonable control of operating expenses resulted in an increase of 119% to R451.0 million.

Headline earnings for the year amounted to R270.4 million against the comparative loss of R170.0 million in 2014. This translates into headline earnings per share of 160.1 cents, reversing the loss of 100.8 cents for the previous period.

Commenting further, Wakeford highlighted the shift in profitability: “Particularly pleasing to note is that trading profits have more than doubled and most important was the generation of cash in the business, allowing net debt to be reduced by almost R400 million.

“While all divisions in the South African business did well and showed improved profitability, the rest of Africa and Indian businesses continue to post losses. Downsides included a further impairment of R74.4 million to the Cosme business in India. As a result, the Board has resolved to dispose of this investment at the earliest opportunity and a formal sale process will soon be commenced for this purpose.”

A dividend of 81 cents per share was declared by the Board for the year ended 30 June 2015 out of income reserves.

Board members were cautiously optimistic about the future prospects of the Group under the current uncertainties in the local market as they expressed satisfaction with the direction taken and progress achieved during the past year.