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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.
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
6 INVENTORY
The amount of inventories written down recognised as an expense in profit or loss:
Continuing operations:
Cost of sales 18 896 17 992 63 986
Discontinued operations:
Cost of sales 304 - 4 616
19 200 17 992 68 602
7 CAPITAL COMMITMENTS
- Contracted 52 216 12 460 11 362
- Approved, but not contracted 148 847 13 083 38 577
201 063 25 543 49 939
8 HEADLINE EARNINGS
Headline earnings is determined as follows:
Continuing operations
Earnings attributable to owners of Adcock Ingram from total operations 280 943 166 662 168 801
Adjusted for:
(Profit)/Loss attributable from discontinued operations (refer note 4.1) (39 903) (7 884) 203 403
Earnings attributable to owners of Adcock Ingram from continuing operations 241 040 158 778 372 204
Adjusted for:
Impairment of intangible assets - - 3 149
(Profit)/Loss on disposal/scrapping of property, plant and equipment (1) 255 888
Tax effect on loss on disposal of property, plant and equipment - (7) (23)
Adjustments relating to equity accounted joint ventures - - 211
Headline earnings from continuing operations 241 039 159 026 376 429
Discontinued operations
Profit/(Loss) attributable to owners of Adcock Ingram from discontinued operations 39 903 7 884 (203 403)
Adjusted for:
Impairment of held-for sale assets - - 207 971
Profit on sale of discontinued operations (34 758) - -
Profit on sale of intangible asset - - (320)
Loss on disposal/scrapping of property, plant and equipment 975 - 70
Headline earnings from discontinued operations 6 120 7 884 4 318
9 SHARE CAPITAL '000 '000 '000
Number of shares in issue 175 748 175 748 175 748
Number of treasury shares held (4 285) (9 454) (4 285)
Net shares in issue 171 463 166 294 171 463
Headline earnings and basic earnings per share are based on:
Weighted average number of shares 166 294 167 219 166 485
Diluted weighted average number of shares 166 294 167 492 166 485
CORPORATE INFORMATION
DIRECTORS
Mr A Hall (Chief Executive Officer)
Prof M Haus (Independent Non-executive Director)
Dr B Joffe (Independent Non-executive Deputy Chairman)
Dr T Lesoli (Independent Non-executive Director)
Ms B Letsoalo (Executive Director)
Mr M Makwana (Independent Non-executive Director)
Dr C Manning (Non-executive Director)
Dr A Mokgokong (Non-executive Director)
Ms D Neethling (Chief Financial Officer)
Mr L Ralphs (Non-executive Director)
Mr C Raphiri (Independent Non-executive Chairman)
Mr M Sacks (Independent Non-executive Director)
Dr R Stewart (Independent Non-executive Director)
COMPANY SECRETARY
NE Simelane
22 February 2017
REGISTERED OFFICE
1 New Road, Midrand, 1682
POSTAL ADDRESS
Private Bag X69, Bryanston, 2021
TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Bierman Avenue, Rosebank, Johannesburg, 2196
PO Box 61051, Marshalltown, 2107
AUDITORS
Ernst & Young Inc.
102 Rivonia Road, Sandton, 2146
SPONSOR
Rand Merchant Bank (A division of FirstRand Bank Limited)
1 Merchant Place, corner Fredman Drive and Rivonia Road, Sandton, 2196
BANKERS
Nedbank Limited, 135 Rivonia Road, Sandown, Sandton, 2146
Rand Merchant Bank, 1 Merchant Place, corner Fredman Drive and Rivonia Road, Sandton, 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.
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