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ADCOCK INGRAM HOLDINGS LIMITED - Unaudited Financial Results for the six-month period ended 31 March 2013

Release Date: 04/06/2013 07:05
Code(s): AIP     PDF:  
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Unaudited Financial Results for the six-month period ended 31 March 2013

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 FINANCIAL RESULTS
for the six-month period ended 31 March 2013

Heritage | Quality | Integrity

SALIENT FEATURES

- Turnover increased 9% to R2,46 billion
- EBITDA increased 15% to R564 million
- HEPS decreased 5% to 188,1 cents
- Dividend per share maintained at 86 cents
- Strategic acquisition of Cosme brands in India concluded
  at a cost of R782 million
- Continued operational improvement under challenging
  market conditions

Adcock Ingram is a leading South African pharmaceutical manufacturer, marketer and distributor.
The Company has a 10% share of the private pharmaceutical market in South Africa with the leading
presence in over-the-counter brands. The Company is South Africa's largest supplier of hospital and
critical care products. Its footprint extends to India and other territories in sub-Saharan Africa.

The extensive product portfolio includes branded and generic prescription medicines, over-the-counter/
fast moving consumer goods (FMCG) brands, intravenous solutions, blood collection products and renal
dialysis systems.

Vision
To be recognised as a leading world-class branded healthcare company.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


                                                               Unaudited               Unaudited          Audited
                                                              six months              six months             year
                                                                   ended                   ended            ended
                                                                31 March                31 March     30 September
                                                                    2013    Change          2012             2012
                                                       Note        R'000         %         R'000            R'000
REVENUE                                                   2    2 474 360         9     2 276 815        4 644 406
TURNOVER                                                  2    2 457 365         9     2 251 450        4 599 249
Cost of sales                                                 (1 420 517)             (1 200 931)      (2 505 167)
Gross profit                                                   1 036 848        (1)    1 050 519        2 094 082
Selling and distribution expenses                               (296 126)               (294 405)        (571 500)
Marketing expenses                                               (97 375)               (102 843)        (208 625)
Research and development expenses                                (52 051)                (40 173)         (81 601)
Fixed and administrative expenses                               (116 397)               (177 746)        (363 535)
Operating profit                                                 474 899         9       435 352          868 821
Finance income                                            2        9 201                    8 151          18 285
Finance costs                                                    (25 446)                (11 081)         (26 637)
Dividend income                                           2        7 794                  17 214           26 872
Profit before taxation                                           466 448         4       449 636          887 341
Taxation                                                        (139 934)               (107 913)        (168 265)
Profit for the period                                            326 514        (4)      341 723          719 076
Other comprehensive income                                        56 765                 (45 135)         (37 896)
 Exchange differences on translation
  of foreign operations                                           56 232                 (31 690)         (26 181)
 Movement in cash flow hedge accounting reserve,
  net of tax                                                         613                 (13 445)         (11 715)
 Net loss on available-for-sale financial asset,
  net of tax                                                         (80)                                      
Total comprehensive income for the period,
 net of tax                                                      383 279                 296 588          681 180
Profit attributable to:
Owners of the parent                                             317 192                 335 296          705 641
Non-controlling interests                                          9 322                   6 427           13 435
                                                                 326 514                 341 723          719 076
Total comprehensive income attributable to:
Owners of the parent                                             372 310                 293 246          670 434
Non-controlling interests                                         10 969                   3 342           10 746
                                                                 383 279                 296 588          681 180
Basic earnings per ordinary share (cents)                          188,0        (5)        198,4            417,8
Diluted basic earnings per ordinary share (cents)                  187,8        (5)        198,1            417,2
Headline earnings per ordinary share (cents)                       188,1        (5)        198,7            422,4
Diluted headline earnings per ordinary share (cents)               187,9        (5)        198,4            421,8

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


                                               Attributable to owners of the parent
                                                                                           Total
                                                                                       attribut-
                                                                              Non-       able to
                                    Issued                                 distri-      ordinary        Non-
                                     share         Share     Retained      butable        share- controlling
                                   capital       premium       income     reserves       holders   interests        Total
                                     R'000         R'000        R'000        R'000         R'000       R'000        R'000
Balance at 30 September 2011
 (audited)                          16 888       765 288    1 932 212      371 368     3 085 756     137 624    3 223 380
Share issue                             45         5 031                                   5 076                    5 076
Movement in treasury shares            (41)      (25 509)                                (25 550)                 (25 550)
Share-based payment expense                                                  9 069         9 069                    9 069
Acquisition of non-controlling
 interests in Ayrton Drug
 Manufacturing Limited                                         (2 000)                    (2 000)     (8 752)     (10 752)
Total comprehensive income                                    335 296      (42 050)      293 246       3 342      296 588
 Profit for the period                                        335 296                    335 296       6 427      341 723
 Other comprehensive income                                                (42 050)      (42 050)     (3 085)     (45 135)
Dividends                                                                                             (1 280)      (1 280)
Distribution out of share premium               (183 831)                               (183 831)                (183 831)
Balance at 31 March 2012
 (unaudited)                        16 892       560 979    2 265 508      338 387     3 181 766     130 934    3 312 700
Share issue                             12         1 980                                   1 992                    1 992
Movement in treasury shares            (32)      (20 101)                                (20 133)                 (20 133)
Share-based payment expense                                                 10 999        10 999                   10 999
Disposal of non-controlling
 interests in National Renal
 Care (Pty) Limited                                            11 279                     11 279       9 108       20 387
Acquisition of non-controlling
 interests in Ayrton Drug
 Manufacturing Limited                                           (148)                      (148)       (160)        (308)
Total comprehensive income                                    370 345        6 843       377 188       7 404      384 592
 Profit for the period                                        370 345                    370 345       7 008      377 353
 Other comprehensive income                                                  6 843         6 843         396        7 239
Dividends                                                    (144 474)                  (144 474)     (9 602)    (154 076)
Distribution out of share premium                  4 542                                   4 542                    4 542
Balance at 30 September 2012
 (audited)                          16 872       547 400    2 502 510      356 229     3 423 011     137 684    3 560 695
Share issue                             33         3 562                                   3 595                    3 595
Movement in treasury shares            (47)      (27 265)                                (27 312)                 (27 312)
Share-based payment expense                                                  8 669         8 669                    8 669
Acquisition of non-controlling
 interests in Ayrton Drug
 Manufacturing Limited                                            (92)                       (92)       (161)        (253)
Total comprehensive income                                    317 192       55 118       372 310      10 969      383 279
 Profit for the period                                        317 192                    317 192       9 322      326 514
 Other comprehensive income                                                 55 118        55 118       1 647       56 765
Dividends                                                    (195 128)                  (195 128)     (1 236)    (196 364)
Balance at 31 March 2013
 (unaudited)                        16 858       523 697     2 624 482     420 016     3 585 053     147 256    3 732 309

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


                                    Unaudited   Unaudited         Audited
                                     31 March    31 March    30 September
                                         2013        2012            2012
                                        R'000       R'000           R'000
ASSETS
Property, plant and equipment       1 655 881   1 377 191       1 560 177
Intangible assets                   1 513 099     720 431         710 960
Other financial assets                139 653     139 013         139 751
Loans receivable                       23 834                     27 060
Deferred tax                            5 135       5 058           5 097
Non-current assets                  3 337 602   2 241 693       2 443 045
Inventories                         1 305 287     819 041         956 164
Trade and other receivables         1 528 772   1 312 297       1 320 191
Cash and cash equivalents              97 607     567 762         492 716
Taxation receivable                    32 851      32 467          70 170
Current assets                      2 964 517   2 731 567       2 839 241
Total assets                        6 302 119   4 973 260       5 282 286
EQUITY AND LIABILITIES
Capital and reserves
Issued share capital                   16 858      16 892          16 872
Share premium                         523 697     560 979         547 400
Non-distributable reserves            420 016     338 387         356 229
Retained income                     2 624 482   2 265 508       2 502 510
Total shareholders' funds           3 585 053   3 181 766       3 423 011
Non-controlling interests             147 256     130 934         137 684
Total equity                        3 732 309   3 312 700       3 560 695
Long-term borrowings                   11 007     322 031         104 625
Post-retirement medical liability      16 645      14 883          15 341
Deferred tax                          106 356      69 412         101 910
Non-current liabilities               134 008     406 326         221 876
Trade and other payables            1 086 833     752 481         983 589
Short-term borrowings                 333 056     419 312         431 368
Cash-settled options                   34 373      43 834          39 983
Provisions                             41 621      38 607          44 775
Bank overdraft                        939 919                          
Current liabilities                 2 435 802   1 254 234       1 499 715
Total equity and liabilities        6 302 119   4 973 260       5 282 286

CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                            Unaudited     Unaudited         Audited
                                                                                           six months    six months            year
                                                                                                ended         ended           ended
                                                                                             31 March      31 March    30 September
                                                                                                 2013          2012            2012
                                                                                                R'000         R'000           R'000
Cash flows from operating activities
Operating profit before working capital changes                                               590 571       496 707        1 077 581
Working capital changes                                                                      (437 308)     (315 534)        (292 138)
Cash generated from operations                                                                153 263       181 173          785 443
Finance income, excluding receivable                                                           11 788         8 151           19 369
Finance costs, excluding accrual                                                              (20 573)      (11 081)         (22 672)
Dividend income, excluding receivable                                                           7 794        17 214           27 035
Dividends paid                                                                               (196 364)       (1 280)        (155 356)
Taxation paid                                                                                (100 638)     (129 180)        (196 158)
Net cash (outflow)/inflow from operating activities                                          (144 730)       64 997          457 661
Cash flows from investing activities
Decrease in other financial assets                                                                           1 197              457
Acquisition of business, net of cash                                                         (821 593)                            
Purchase of intangible assets                                                                              (13 508)         (13 109)
Purchase of property, plant and equipment (1)                                                (157 950)     (273 539)        (511 793)
Proceeds on disposal of property, plant and equipment                                                          346            1 732
Decrease/(Increase) in loans receivable                                                         2 827                       (11 221)
Net cash outflow from investing activities                                                   (976 716)     (285 504)        (533 934)
Cash flows from financing activities
Acquisition of non-controlling interests in Ayrton Drug Manufacturing Limited                    (253)      (10 752)         (11 060)
Proceeds from issue of share capital                                                            3 595         5 076            7 068
Purchase of treasury shares                                                                   (27 312)      (25 550)         (45 683)
Distribution out of share premium                                                                         (183 831)        (179 289)
Increase in borrowings                                                                         31 789         4 521           16 503
Repayment of borrowings                                                                      (225 757)     (103 848)        (321 777)
Net cash outflow from financing activities                                                   (217 938)     (314 384)        (534 238)
Net decrease in cash and cash equivalents                                                  (1 339 384)     (534 891)        (610 511)
Net foreign exchange difference on cash and cash equivalents                                    4 356          (929)            (355)
Cash and cash equivalents at beginning of period                                              492 716     1 103 582        1 103 582
Cash and cash equivalents at end of period                                                   (842 312)      567 762          492 716

(1) Additions include interest capitalised in accordance with IAS 23, of R8,1 million.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1    BASIS OF PREPARATION

1.1  Introduction
     This unaudited interim report has been prepared in accordance with International Financial Reporting Standards ("IFRS"),
     IAS 34: Interim Financial Reporting, the South African Companies Act, the Listings Requirements of the JSE Limited as well as the
     SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Standards Council.

     Mr Andy Hall, Deputy Chief Executive and Financial Director, is responsible for this set of financial results and has supervised the
     preparation thereof in conjunction with Finance Executive, Ms Dorette Neethling.

1.2  Changes in accounting policies
     The accounting policies and the methods of computation are consistent with those of the previous annual financial statements,
     except for the adoption of the following amended IFRS interpretation during the year:

     IAS 1 Presentation of Items of Other Comprehensive Income (Amendment)

     The adoption of the above standard did not have any effect on the financial performance or position of the Group.

                                                                                            Unaudited             Unaudited          Audited
                                                                                           six months            six months             year
                                                                                                ended                 ended            ended
                                                                                             31 March              31 March     30 September
                                                                                                 2013                  2012             2012
                                                                                                R'000                 R'000            R'000
2   REVENUE
    Turnover                                                                                2 457 365             2 251 450        4 599 249
    Finance income                                                                              9 201                 8 151           18 285
    Dividend income                                                                             7 794                17 214           26 872
                                                                                            2 474 360             2 276 815        4 644 406

3   SEGMENT REPORTING
    Turnover
    Southern Africa                                                                         2 329 872             2 161 865        4 435 938
      OTC                                                                                     906 058               874 685        1 791 875
      Prescription                                                                            856 707               752 145        1 520 219
      Hospital                                                                                567 107               535 035        1 123 844
    Rest of Africa and India                                                                  212 393               144 117          295 545
                                                                                            2 542 265             2 305 982        4 731 483
    Less: Intercompany sales                                                                  (84 900)              (54 532)        (132 234)
                                                                                            2 457 365             2 251 450        4 599 249
    Contribution after marketing expenses (CAM)
    Southern Africa                                                                           591 892               620 555        1 245 746
      OTC                                                                                     322 121               318 870          660 492
      Prescription                                                                            178 204               198 037          371 801
      Hospital                                                                                 91 567               103 648          213 453
    Rest of Africa and India                                                                   56 206               35 116            75 703
                                                                                              648 098               655 671        1 321 449
    Less: Intercompany                                                                         (4 751)               (2 400)          (7 492)
                                                                                              643 347               653 271        1 313 957
    Less: Other operating expenses (1)                                                       (168 448)             (217 919)        (445 136)
      Research and development                                                                (52 051)              (40 173)         (81 601)
      Fixed and administrative                                                               (116 397)             (177 746)        (363 535)

    Operating profit                                                                          474 899               435 352          868 821

    (1) Other operating expenses are managed on a central basis and are not allocated to operating segments.

                                                                          Unaudited        Unaudited          Audited
                                                                         six months       six months             year
                                                                              ended            ended            ended
                                                                           31 March         31 March     30 September
                                                                               2013             2012             2012
                                                                              R'000            R'000            R'000
3   SEGMENT REPORTING continued
    Total assets
    Southern Africa                                                       4 998 083        4 803 977        5 070 135
     Pharmaceuticals                                                      4 305 599        4 319 363        4 454 715
     Hospital                                                               692 484          484 614          615 420
    Rest of Africa and India                                              1 304 036          169 283          212 151
    Total assets                                                          6 302 119        4 973 260        5 282 286

4   INVENTORY
    The amount of inventories written down recognised as an
     expense in profit or loss                                                9 466           17 029           42 336

5   CAPITAL COMMITMENTS
    Contracted                                                               96 764           235 873          64 632
    Approved                                                                106 084            54 024         143 403
                                                                            202 848           289 897         208 035
6   HEADLINE EARNINGS
    Earnings per share is derived by dividing earnings attributable to
    owners of Adcock Ingram for the period, by the weighted average
    number of shares in issue.
    Headline earnings is determined as follows:
    Earnings attributable to owners of Adcock Ingram                        317 192           335 296         705 641
    Adjusted for:
    Impairment of leasehold improvements and intangible assets                                                1 887
    Tax indemnity on discontinued operation                                                                   2 355
    Loss on disposal of property, plant and equipment, net of tax               167               509           3 526
    Headline earnings                                                       317 359           335 805         713 409

7   SHARE CAPITAL                                                                      Number of shares
                                                                               '000              '000            000
    Number of ordinary shares in issue                                      201 066           200 604         200 735
    Number of A and B shares held by the BEE participants                   (25 944)          (25 944)        (25 944)
    Number of ordinary shares held by the BEE participants                   (2 255)           (1 451)         (1 782)
    Number of ordinary shares held by Group company                          (4 285)           (4 285)         (4 285)
    Net shares in issue                                                     168 582           168 924         168 724
    Headline earnings and basic earnings per share are based on:
    Weighted average number of shares                                       168 696           168 982         168 894
    Diluted weighted average number of shares                               168 868           169 254         169 131

8    BUSINESS COMBINATION
8.1  Cosme Farma Laboratories Limited (Cosme)
     On 17 January 2013, the Group acquired certain assets of Cosme, a division of the Cosme Group, based in Goa, India. Cosme is a
     mid-sized pharmaceutical sales and marketing business which has been operating in the Indian domestic pharmaceutical market
     for the past 40 years and is ranked in the top 70 in India, per IMS Health, with a sales force of approximately 1 000 staff.

     The fair value of the identifiable assets as at the date of acquisition was:
                                                                                                                           Unaudited
                                                                                                                          six months
                                                                                                                               ended
                                                                                                                            31 March
                                                                                                                                2013
                                                                                                                               R'000
     Assets
     Property, plant and equipment                                                                                               130
     Marketing-related intangible assets                                                                                     618 748
     Customer-related intangible assets                                                                                       87 368
     Contract-related intangible assets                                                                                       13 040
     Manufacturing-related intangible assets                                                                                   1 630
     Total identifiable net assets at fair value                                                                             720 916
     Goodwill arising on acquisition                                                                                          61 484
     Purchase consideration                                                                                                  782 400
     VAT recoverable and deposits                                                                                             39 193
     Included in cash flows from investing activities                                                                        821 593

     The significant factors that contributed to the recognition of goodwill of R61,5 million include, but are not limited to, the
     establishment of a presence within the domestic Indian market, with local management and expertise to drive the company's
     product sales into the various channels and customers that exist within this market.
	 
     From the date of acquisition, Cosme contributed R35,0 million towards revenue.
	
     As the assets purchased were fully integrated into the Indian business, it is not possible to determine the exact contribution towards
     profit before income tax.
                                                                                                                                R'000
     Analysis of cash flows on acquisition
     Transaction costs of the acquisition (included in cash flows from operating activities)                                    4 248
     Cash outflow on acquisition                                                                                                4 248

     Transaction costs of R4,2 million have been expensed during the six months and are included in fixed and administrative expenses.

SALIENT FEATURES

Turnover increased 9% to R2,46 billion
EBITDA increased 15% to R564 million
HEPS decreased 5% to 188,1 cents
Dividend per share maintained at 86 cents
Strategic acquisition of Cosme brands in India concluded at a cost of R782 million
Continued operational improvement under challenging market conditions

The Company delivered satisfactory operating results from the activities under its control, reflecting continued progress with
its strategic priorities. This was, however, a challenging period for the Company, both in markets for its products and in that the
Rand weakened considerably compared to the prior corresponding period.

As released via SENS on 22 March 2013, the Company received an unsolicited proposal. Subsequent thereto, the Company
announced on 9 May 2013 that it had received other proposals which the Board is evaluating. The Board, on 31 May 2013,
updated shareholders that this process is ongoing and remains focused on obtaining the best outcome for the Company and
delivering value to shareholders.

FINANCIAL REVIEW

Turnover
The acquisition of Cosme, a mid-sized Indian pharmaceutical sales and marketing business, was concluded in late January 2013.
This acquisition, together with recent tender awards and the conclusion of further multinational (MNC) contracts, supported
turnover growth of 9% to R2,457 million (2012: R2,251 million).

New business in the product mix accounted for 6,1% of the overall increase with Novo-Nordisk and Lundbeck products
contributing R109 million in the Prescription portfolio. Price increases across the business averaged 1,9% for the period.
The Single Exit Price (SEP) increase of 5,8%, granted in March 2013, had very little effect in the six-month period, but the
2012 SEP increase of 2,14% was implemented in March 2012. Over-the-counter (OTC) turnover growth of 3,6% includes
4,8% price inflation but lower volumes on the back of weak consumer demand resulted in muted growth. The Hospital Products
division's revenue growth of 6,0% includes a 0,5% price increase, with good volume growth achieved in the public sector.

Profits
Gross profit for the six months decreased by 1,3% to R1,037 million (2012: R1,051 million) with the margin declining from
46,7% to 42,2% (September 2012: 45,5%). Gross margin as a percentage of sales was adversely impacted by the significantly
weaker Rand, which affected imported raw materials and finished products. The average exchange rates for procurement
in the period were R8,75 (2012: R7,57) and R11,08 (2012: R10,48) for US Dollar and Euro imports, respectively, with total foreign
contracts settled during the period amounting to R523,2 million (2012: R366,1 million).

Operating expenses, net of an abnormal foreign exchange gain of R42,4 million, decreased by 8,7% to R562 million (2012:
R615 million). Operating profit increased by 9,1% to R475 million (2012: R435 million) with the percentage on sales stable at
19,3% (September 2012: 18,9%).

Finance costs, net of investment income, were R8,5 million, compared to the R14,3 million income realised in the prior period as
the average cash position turned into a net overdraft position following the acquisition of Cosme.

After net finance costs and dividends received, profit before tax increased 3,7% to R466 million (2012: R450 million). The
effective tax rate for the period was 30,0% (2012: 24,0%, as a result of utilisation of the Strategic Industrial Project allowance),
resulting in profit after tax declining 4,5% to R327 million (2012: R342 million).

Headline earnings
The improved turnover, lower gross margins due to the weak Rand and sales mix effect, good cost control and expiry of
tax allowances, when combined, delivered headline earnings for the six months ended 31 March 2013 of R317,4 million.
This represents a 5% decrease from the comparable figure for 2012 of R335,8 million and translates into the same percentage
decrease at the headline earnings per share (HEPS) and earnings per share (EPS) level.

Cash flows and financial position
Cash generated from operations was R153 million (2012: R181 million) after working capital increased by R437 million.

Trade and other receivables accounted for a cash outflow of R165 million with trade accounts receivable days at the end of the
period of 68 days, deteriorating from the 65 days reported in September 2012, including debt outstanding from government
amounting to R139 million. No receivables were written off in the period.

Inventory increased by R348 million as safety stock of some major brands was increased to improve service levels, inventory
relating to new MNC and tender business added R140 million, and the overall holding cost increased due to the exchange rate
impact.

After net finance costs, dividends and taxation, cash outflow from operations was R145 million. Total capital expenditure for the
six months amounted to R158 million (2012: R274 million) which includes upgrading of the Midrand distribution facility, as well
as the completion of the upgrade at the Aeroton distribution facility and the high-volume liquids facility.

Subsequent to September 2012, an amount of R200 million has been repaid on the Capex loan facility. The remaining balance
of R300 million is being repaid in quarterly instalments with the final instalment due in December 2013. Cash decreased by
R1,3 billion, leaving the business in an overdraft position of R842 million (September 2012: R493 million net cash position).

Interim dividend from income reserves
The Board has declared an interim dividend out of income reserves of 86 cents per share for the six months ended
31 March 2013, equal to the comparable distribution in 2012.

BUSINESS OVERVIEW

Southern Africa
This segment encompasses all of the businesses in the Southern African region namely OTC, Prescription and Hospital. Overall,
the region posted a sales increase of 7,8%, despite consumers remaining under pressure. Volumes were boosted by increased
tender awards and we expect to see continued volume improvements as the ARV tender sales gain momentum during the
second half of the year.

Margins have been negatively impacted by the weak Rand, competitive trading conditions, inflation-plus cost increases on raw
materials and production inputs, and the change in mix, with higher proportions of MNC and tender business at lower margins,
resulting in the contribution after marketing expenses (CAM) decreasing almost 5% to R592 million (2012: R621 million).

OTC sales increased by 4% to R906 million (2012: R875 million), with good performance from economy brands in Pharmacy
and schedule 0 brands in the FMCG channel. Premium brands remain under pressure but are showing growth relative
to the market. Adcock Ingram is number 1 in 5 categories in the Pharmacy channel including: Pain, Colds & Flu, Allergy,
Digestive and Feminine Health and number 2 in Supplements, as measured by IMS. In the FMCG channel, Adcock Ingram
is number 1 in Supplements and Feminine Health and is number 2 in Pain and Digestive Wellbeing, as measured by Aztec
and Nielsens.

The OTC portfolio comprises a basket of both premium and economy brands from Complementary Alternative Medicines
Products and some Personal Care products to Schedule 2 medicines. These are sold through both the Pharmacy and FMCG
channels and have benefited Adcock Ingram, considering the economic pressure on consumers, as has the increase in proactive
self-care and self-medication. The core brands  Panado, Corenza, Bioplus, Citro-Soda and Allergex  have managed to at least
hold their market positions despite aggressive competition.

The strategic move to participation in economy brands in OTC over the last few years has reduced the Company's reliance on
a few core brands and will continue to grow competitive advantage in the OTC sector.

Turnover in the Prescription business increased by 14% to R857 million (2012: R752 million). This was impacted by new
multinational collaborations, including the most recent alliance with Lundbeck South Africa which has provided Adcock Ingram
with a leading position in the Central Nervous System category, success in the most recent ARV and other oral dosage tender
awards, and the introduction of new generics products (Atorvastatin and Lansoprazole).

Hospital turnover increased by 6% over the comparable period to R567 million (2012: R535 million) with increased tender
volumes. The Renal portfolio reflects continued growth through peritoneal dialysis, haemodialysis and Continuous Renal
Replacement Therapy (CRRT).

Rest of Africa
Revenue growth of 3% over the same period last year was achieved despite supply constraints which adversely impacted
exports to the SADC region.

In Ghana, Adcock Ingram product sales continue to grow due to expansion in territorial coverage and increased marketing
activities, but the core Ayrton brands' performance was almost flat due to production bottlenecks on the liquid lines.

In East Africa, sales increased by 34% compared to the same period last year, driven by expansion in the OTC therapeutic
areas, increased marketing activities and the re-introduction of Dawanol.

Datlabs in Zimbabwe became a 100% Adcock Ingram subsidiary at the beginning of the financial year with the business
recording a 36% increase in sales over the same period last year, benefiting from Group supply chain scale economies.
CamphaCare was successfully launched late March 2013 and has since received country-wide acceptance.

SUPPLY CHAIN

The Wadeville facility has been accepted by the Food and Drug Administration in the USA (USFDA) following an audit in
November 2011. The capacity at Wadeville for tableting will be doubled through the addition of two new granulation suites,
which is expected to be completed by the end of this calendar year. The expansion is being done with little or no disruption
to the operation of the plant and will place Adcock Ingram in a stronger position to take advantage of additional capacity for
both the general tablet and ARV tenders.

The Clayville high-volume liquids facility has been approved by the MCC following an audit in October 2012. Product-by-
product approval is being granted following completion of validation batches. Various MNC's have also conducted audits
at the facility with positive outcomes.

The inventory supply issues experienced during the distribution centre upgrade at Aeroton have been resolved and the
focus is now on efficiency and cost reduction. Additional equipment to increase the capacity at the Bangalore facility is being
investigated.

LOGISTICS

Distribution volumes on a unit basis have increased 14% compared to the same period last year, with pallet capacities in
the network remaining a challenge. Distribution expenses, as a cost per unit, have decreased year-on-year, after cost-saving
initiatives and synergies were realised following the rationalisation of certain warehouses.

REGULATORY ENVIRONMENT

The Department of Health announced an SEP increase of 5,8% in March 2013. No announcements on the regulation of
logistics fees and international benchmarking have been forthcoming. There has been a further delay to the South African
Health Products Regulatory Authority (SAHPRA) which was originally proposed to come into effect on 1 April 2013.

The use of dextropropoxyphene (DPP) containing products was recently successfully appealed on in Australia subject to
certain conditions, including the use of safety warnings and strict contra-indication criteria. Adcock Ingram's appeal process is
still in progress.

PROSPECTS

The Government tender business is benefiting from significantly increased volumes which are expected to drive greater
efficiencies in the supply chain. The factories are gearing up to the increased demand and the business is confident of its
ability to meet Government requirements on a sustainable basis.

The multinational partner of choice strategy continues to deliver attractive value with the recent additions of Lundbeck
and Novo-Nordisk. Additional collaborations are being explored to continue the path of revenue stream diversification and
to decrease mature product dependence. Supply chain collaborations will address the challenge in extending multinational
collaboration partnerships into sub-Saharan Africa.

Whilst registration delays at the MCC continue to impede the ability of the Company to bring a material number of new
products to the market, further new product launches are planned for the third quarter. Recent MCC registrations include
Irbesartan and a triple-combination ARV therapy.

The East Africa turnaround is on course with regulatory bottlenecks in Uganda and Tanzania having been resolved. Inspection
of Adcock Ingram's factories by the Ethiopian Pharmaceutical Regulatory Authorities has commenced and bodes well for entry
into that growing market. In Ghana, the new management team is progressing well with revamping the factory and distribution
infrastructure.

The Group continues to maintain its focus on the acquisition of businesses and brands in high growth emerging markets.
The impact of the current economic climate on consumer spending is concerning. Margins will continue to be impacted by cost
pressures and active ingredient prices which are directly linked to currency fluctuations, but in the second half of the financial
year will be mitigated by the recent SEP increase. The second six months of the year will incorporate a determined focus on
improving the working capital cycle within the business.

CHANGES TO THE BOARD OF DIRECTORS

Mr Andrew Thompson has been appointed as the Chairman of the Audit Committee, effective 12 April 2013. Mr Leon Schönknecht
has been appointed as a member of the Audit Committee, effective 15 May 2013. These appointments follow the resignation
of Mr Eric Diack as an independent non-executive director of the Company, Chairman of the Company's Audit Committee and
as member of the Company's Risk and Sustainability Committee with effect from 22 March 2013.

DIVIDEND

The Board has declared an interim gross dividend out of income reserves of 86 cents per share in respect of the six months
ended 31 March 2013. No credits in terms of secondary tax on companies have been utilised. The South African dividend
tax ("DT") rate is 15% and the net dividend payable to shareholders who are not exempt from DT is 73,10 cents per share.
As at the date of this declaration, Adcock Ingram has 175 157 248 ordinary shares in issue including 6 540 587 treasury shares.
There are also 25 944 261 "A" and "B" ordinary shares in issue, all held as treasury shares, which are entitled to a dividend.
The income tax reference number is 9528/919/15/3.

The salient dates for the dividend are detailed below:
Last date to trade: 	                                                                                Friday, 28 June 2013
Shares trade "ex" dividend: 	                                                                         Monday, 1 July 2013
Record date: 	                                                                                         Friday, 5 July 2013
Payment date: 	                                                                                         Monday, 8 July 2013

Share certificates may not be dematerialised or rematerialised between Monday, 1 July 2013 and Friday, 5 July 2013, both
dates inclusive.

On Monday, 8 July 2013 the cash dividend will be electronically transferred to the bank accounts of all certificated shareholders
where this facility is available. Where electronic fund transfer is not available or desired, cheques dated 8 July 2013 will be
posted on that date. Shareholders who have dematerialised their share certificates will have their accounts at their CSDP
or broker credited on Monday, 8 July 2013.

By order of the Board

NE Simelane
Company Secretary

Johannesburg
4 June 2013

CORPORATE INFORMATION

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")

Directors:
KDK Mokhele (Chairman)*, JJ Louw (Chief Executive Officer), AG Hall (Deputy Chief Executive and Financial Director),
M Haus*, T Lesoli*, PM Makwana*, CD Raphiri*, LE Schönknecht*, RI Stewart*, AM Thompson*
* Independent non-executive

Company secretary:
NE Simelane

Registered office:
1 New Road, Midrand, 1682

Postal address:
Private Bag X69, Bryanston, 2021

Transfer secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107

Auditors:
Ernst & Young Inc.
Wanderers Office Park, 52 Corlett Drive, Illovo, 2196

Sponsor:
Deutsche Securities (SA) (Pty) Limited
3 Exchange Square, 87 Maude Street, Sandton, 2146

Bankers:
Nedbank Limited, 135 Rivonia Road, Sandown, Sandton, 2146
Rand Merchant Bank, 1 Merchant Place, corner Fredman Drive and Rivonia Road, Sandton, 2196

Attorneys:
Read Hope Phillips, 30 Melrose Boulevard, Melrose Arch, 2196

Forward-looking statements:
Adcock Ingram may, in this document, make certain statements that are not historical facts and relate to analyses and other
information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements
may also relate to our future prospects, developments and business strategies. Examples of such forward-looking statements
include, but are not limited to, statements regarding exchange rate fluctuations, volume growth, increases in market share,
total shareholder return and cost reductions. Words such as "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could",
"may", "endeavour" and "project" and similar expressions are intended to identify such forward-looking statements, but are not
the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections and other forward-looking
statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our
actual results may differ materially from those anticipated. Forward-looking statements apply only as of the date on which they
are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information,
future events or otherwise.

www.adcock.com



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