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AFROCENTRIC INVESTMENT CORPORATION LIMITED - Interim results and dividend declaration

Release Date: 12/03/2019 09:00
Code(s): ACT     PDF:  
Wrap Text
Interim results and dividend declaration

AfroCentric Investment Corporation Limited
Incorporated in the Republic of South Africa
Registration number 1988/000570/06
JSE Code: ACT
ISIN: ZAE 000078416
('AfroCentric' or 'the Company' or 'the Group')

Unaudited Interim Results and Dividend Declaration
for the six months ended 31 December 2018

Financial highlights
13.2% Total revenue
7.0% Healthcare services operating profit
6.25% Dividend increase
4 Acquisitions completed
4 New managed care contracts secured

Commentary
Introduction and review 
AfroCentric is a majority black-owned JSE listed investment holding company which operates 
in and provides specialised services to the public and private healthcare sectors. AfroCentric 
has and continues to maintain its deliberate objective of being the leading example of 
transformation and empowerment in the South African healthcare sector.

The Board is pleased to present comments on AfroCentric's ('ACT') summary interim results 
for the six months ended 31 December 2018. The period under review has been characterised by 
investment in new and growing contracts/entities as well as certain complementary acquisitions. 
The earnings are stable and all the Group enterprises have contributed to the Group's growing 
operations and earnings. In addition, the prior and continued investment in system development 
and increased IT capacity, has already contributed favourably towards the current year results, 
thereby anticipating repeated cost savings through greater scale and procedural efficiencies 
into the 2020 financial year and beyond.

Apart from ACT's principal subsidiary, Medscheme, providing healthcare administration and 
managed care services to the membership of a growing number of prominent institutional 
clients, (having memberships of 3.7 million lives), the Group is also heavily invested 
in other essential segments of the public and private healthcare markets in South Africa. 
The Group continues in its rapid expanding activity and application in its pharmaceutical 
wholesale supply, chronic medication distribution networks, specialised disease management, 
information technology (IT) solutions, transactional switching, fraud detection, the 
development and marketing of tailored health insurance solutions and products, in 
partnership with SANLAM.  

Accounting policies and basis of preparation 
The summary consolidated financial statements are prepared in accordance with the requirements 
of the JSE Limited Listings Requirements ('Listings requirements') for summary financial 
statements, and the requirements of the Companies Act applicable to summary financial 
statements.

The Listings Requirements require summary financial statements to be prepared in accordance 
with the framework concepts and the measurement and recognition requirements of International 
Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the 
Accounting Practices Committee and Financial Pronouncements as issued by the Financial 
Reporting Standards Council and to also, as a minimum, contain the information required by 
IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of 
these summarised interim financial statements are in terms of International Financial 
Reporting Standards and are consistent with those accounting policies applied in the 
preparation of the previous consolidated annual financial statements.

The group adopted the following new accounting pronouncements, during the current period.
Accounting pronouncement               Adoption impact
IFRS 15 Revenue from Contracts         All contracts within the Group have been assessed 
with Customer (IFRS 15)                against the new revenue standard and the application 
IFRS 15 replaces the previous          of IFRS 15 did not have a significant impact on the 
revenue recognition                    group's results or financial position.
guidance applied by the group as 
contained in IAS 18 Revenue.           

IFRS 9 Financial Instruments           The group has applied IFRS 9 from 1 July 2018 and
(IFRS 9)                               elected not to restate comparatives on transition,
IFRS 9 replaces the previous           with the impact of adoption recognised as an adjustment
financial instrument                   to the opening balance of retained earnings as at
recognition and measurement            1 July 2018. The most significant impact of adoption
guidance applied by the                was an increase in impairment allowances on trade
group as contained in IAS 39           receivables due to the IFRS 9 requirement to consider 
Financial Instruments:                 forward looking information when determining impairment 
Recognition and Measurement.           allowances. The cumulative net impact of adopting IFRS 9 
                                       was an increase of R 2.1m in impairment allowances and a
                                       corresponding decrease of R2.1m in retained earnings.

IFRS 16 Leases (IFRS 16)               The Group has elected to early adopt IFRS 16 from 
IFRS 16 replaces the previous          1 July 2018 and elected the Modified retrospective
Leases recognition                     approach. This resulted in the cumulative impact of 
guidance applied by the group          applying IFRS 16 being accounted for as an adjustment to 
as contained in IAS 17                 equity at the start of the current accounting period.
Leases.                                The most significant impact of the adoption was the
                                       right of use asset recognised on the balance sheet and
                                       the corresponding lease liability (Note 3).


Industry highlights
* AfroCentric Health (Pty) Ltd, the main operating subsidiary within the Group, achieved 
  a level 1 B-BBEE in December 2018.
* Medscheme Holdings (Pty) Ltd was awarded the 'Service Excellence: Administration and 
  Managed Care Award', at the 2018 BHF Titanium Awards ceremony.
* AfroCentric Investment Corporation Limited was awarded a Merit Award (small cap) at the 
  CSSA/JSE Integrated Reporting Awards.
* Pharmacy Direct opened a new Centralised Chronic Medicines Dispensing and Distribution 
  'CCMDD' Centre on 13 August 2018, specifically to cater for the Department of Health (DOH) 
  contract, an event that was graced by the Minister of Health.
 
Financial performance  
Profit before tax decreased by 3.6% for the period under review amounting to 
R239.5 million (2017: 248.6million). 

Profit after tax (PAT) increased by 2.1% compared to prior financial period. 
* The amount in non-recurring development and establishment costs in excess of R9 million 
  was incurred and absorbed during the period, creating the expansion platforms for the 
  renewed PD/DOH chronic medication distribution contract.
* Scriptpharm and MMed's initial setup costs represent a R3million investment in each business 
  up to 31 December 2018.
* Due to less cash in the Group as a result of investments made in the past (e.g. Tranche 2 
  payment in September 2017), new acquisitions (e.g. Private Health Administrators 'PHA'), 
  continuing projects like Fusion, investment in IFM (fraud detection system) and stock 
  funding provided to MMed, cash reserves are less and therefore lower interest 
  earned levels.

Core business however continues to perform well with operating profit for Healthcare 
services growing at 7%. Earnings per share (EPS) increased slightly in this period by 1.0% 
and headline earnings per share (HEPS) increased by 3.1%. 

Growth initiatives 
AfroCentric has for some time been focused on opportunities which will serve to create 
a platform, designed to establish a value chain of healthcare services, to optimise the 
purchasing power of every healthcare Rand spent. This is done through models of integration, 
mergers, partnerships and economic incentives devised to improve the effectiveness of 
patient care and viable treatment outcomes, within the broader healthcare delivery system.

During the period under review and prior to publishing these results, the following 
positive contributing contracts are in progress or have been concluded:
* Acquisition of the iThrive Business Solution Group, main subsidiary Private 
  Health Administrators (' PHA'), effective 1 October 2018 (an administration company)
* Scriptpharm has secured the Polmed Chronic Medicine Management contract, effective 
  1 January 2019.
* Medscheme has secured the Medshield Hospital Benefit Management contract, effective 
  1 October 2018.
* Medscheme Forensic Services secured the Medshield Fraud Prevention and Recovery 
  contract, effective 1 January 2019.
* Medscheme has secured the Hosmed Medicine Management contract, effective 1 July 2019.
* The acquisition of an additional 25% stake in AFA Botswana was concluded effective 
  1 March 2019, this will effectively increase Medscheme's shareholding to 49%.
* Acquisition of 100% shareholding of Sanlam Health was concluded effective 1 March 2019.
* In line with Afrocentric's growth objective of expanding its activity and application 
  in its pharmaceutical supply and medicine distribution network, the call option to acquire 
  the remaining 74% in Activo Health was exercised. The shareholders' approval was obtained 
  at a Company general meeting on 10 January 2019 and the approval of the Competition 
  Commission on 26 February 2019. The acquisition has now become unconditional and will 
  be implemented according to its terms. The effective date of the acquisition was 
  1 March 2019.

The Group has continued to invest in Pharmacy Direct, to support it as it implements 
the DOH contract in KwaZulu Natal (KZN) - this programme will substantially alleviate 
the congestion at public hospitals and clinics. Through this KZN contract, the number of 
scripts that are dispensed per month is now in excess of 1million. This is one of the ways 
that reflect that AfroCentric will continue to participate in the various government 
initiatives as the NHI is being rolled out. 

AfroCentric's Insurance Fraud Manager ('IFM') continues as a great developmental success, 
with direct savings and recoveries to our clients in excess of R500million. Through the 
success of our existing clients, this has created an opportunity for other Medical Schemes 
to procure the services of our forensics team.

In the prior year, Sanlam and AfroCentric management diligently worked towards the 
finalisation of a portfolio of healthcare, life and lifestyle products to be jointly introduced 
to the broader market - this was successfully concluded,  and these products are offered to the 
various medical aid members from January 2019.

Prospects
AfroCentric has once again delivered a solid operating result, particularly during an 
interim period laced with challenging political and economic uncertainty. It was a period 
characterised by a lack of economic growth and declining consumer disposable incomes. 
Notwithstanding the above, the benefits of the Group's maintained programme of expansion, 
including the general and sustained quality of earnings from within the underlying businesses, 
all contributed to the satisfactory financial outcome of the Group during this period under 
review.

The Group's financial position remains sound, cash reserves were utilised to acquire 
PHA, 1 October 2018 and continued  investments in the IT capabilities within the Group. 
At corporate and operational level, management is assessing and implementing plans for real 
growth and pursuing selective local and international opportunities to complement the 
existing product and service offering.

Directors
The following changes were made to the Board during the period under review:
* Professor SA Zinn was appointed as an Independent Non-executive Director effective 
  23 November 2018.
* Mr JB Fernandes was appointed as an Independent Non-Executive Director effective 
  23 November 2018.
* Mr SE Mmakau resigned as an Independent Non-Executive Director effective 1 December 
  2018 as he accepted the position of Group Chief Information Officer on the same day.
* Ms LL Dhlamini was appointed as the Lead Independent Non-executive Director effective 
  23 November 2018.
 
We wish to advise shareholders that the Group CEO (Antoine Van Buuren) will be 
retiring at the end of March 2019. The Board would like to thank him for his invaluable 
contribution to the Group. His experience, guidance and wisdom will certainly be missed 
both from an executive level and Board level. We wish him well in his retirement. Antoine 
will be  available until the end of May 2019 to ensure a smooth handover to the new CEO.

Ahmed Banderker will take over as the AfroCentric Group CEO effective 1 April 2019. 

Dividends
The Board has pleasure in announcing that an interim dividend of 17 cents per 
ordinary share (gross) has been declared for the six months ended 31 December 2018. 
Dividends are subject to Dividends Withholding Tax. The payment date for the 
dividend is Monday, 13 May 2019. This interim dividend will constitute part of the 
Group's annual dividend, to be considered in due course with the results for the 
year ending on 30 June 2019.

* Dividends have been declared out of profits available for distribution.
* Local Dividends Withholding Tax rate is 20%.
* Gross dividend amount is 17 cents per ordinary share.
* Net cash dividend amount is therefore 13.6 cents per ordinary share.
* Company has 554 377 328 ordinary shares in issue as at the declaration date.
* Company's income tax reference number is 9600/148/71/3.

The salient dates relating to the dividend are as follows:
Last day to trade cum dividend                                  Monday, 6 May 2019
Shares commence trading ex-dividend                            Tuesday, 7 May 2019
Dividend record date                                           Friday, 10 May 2019
Dividend payment date                                          Monday, 13 May 2019

Share certificates for ordinary shares may not be dematerialised or rematerialised 
between Tuesday, 7 May 2019 and Friday, 10 May 2018, both days inclusive.

Basis of preparation 
The unaudited unreviewed interim results have been prepared under the supervision of 
Mr JW Boonzaaier CA(SA), in his capacity as the Group Chief Financial Officer. 
This announcement does not include the information required pursuant to paragraph 
16A(j) of IAS 34. This is however available on our website 
(http://www.afrocentric.za.com/inv-reporting.php), or at our offices upon request.

On behalf of the Board
Dr ATM Mokgokong Mr AV Van Buuren
Chairperson Group Chief Executive Officer
Johannesburg
12 March 2019

Consolidated statement of financial position
                                                  Unaudited     Unaudited 
                                                 six months    six months       Audited
                                                      ended         ended    year ended
                                                31 December   31 December       30 June
                                                       2018          2017          2018
                                                      R'000         R'000         R'000
Assets   
Non-current assets                                2 867 453     2 141 169     2 306 326 
Property and equipment                              283 788       197 396       255 076
Right of use asset (Note 3)                         409 947             -             -
Land and buildings                                  119 026       122 451       120 573
Investment property                                  15 418        15 418        15 418 
Goodwill (Note 1)                                   926 293       874 162       883 488 
Intangible assets (Note 1)                          937 284       697 273       855 598 
Financial asset at fair value through             
profit and loss                                       5 000        18 444         9 000 
Listed investment                                         -        26 558             -
Managed funds and deposits (Note 2)                  68 053        62 517        65 028
Investment in associates                             59 347        45 385        56 935 
Deferred income tax assets                           43 297        81 565        45 210 
Current assets                                      811 878       871 245       823 735 
Trade and other receivables                         445 161       351 257       348 527 
Inventory                                           100 594        87 830        83 532 
Current tax asset                                    50 589        34 130        20 768 
Receivables from associates and joint             
venture                                               8 043         9 981         5 740 
Managed funds and deposits (Note 2)                  68 643       105 972       152 250 
Cash and cash equivalents (Note 2)                  138 848       282 075       212 918 
Total assets                                      3 679 331     3 012 414     3 130 061 
Equity and liabilities                            
Capital and reserves                              1 976 386     1 888 232     1 940 614 
Issued ordinary share capital                        18 686        18 686        18 686 
Share premium                                       999 058     1 054 932       999 058 
Share-based payment reserve                           7 001           375         3 501 
Treasury shares                                      (2 324)       (2 324)       (2 324)
Capital contribution by non-                      
controlling interest                                 55 874             -        55 874 
Foreign currency translation reserve                  2 658          (510)          793 
Distributable reserve                               895 433       817 073       865 026 
Non-controlling interest                            725 960       639 026       679 277 
Total equity                                      2 702 346     2 527 258     2 619 891 
Non-current liabilities                             595 476       153 963       153 860 
Lease liability (Note 3)                            415 765             -             -
Deferred income tax liabilities                     150 078       122 947       121 667 
Non-current provisions                                8 350         8 350         8 350 
Post-employment medical obligations                   2 664         2 771         2 665 
Deferred payment                                     18 619         5 364         5 263 
Accrual for straight lining of leases             
(Note 3)                                                  -        14 531        15 915 
Current liabilities                                 381 509       331 193       356 310 
Provisions                                            4 969         3 705         8 597 
Borrowings                                                -        23 850             -
Trade and other payables                            306 516       246 941       284 029 
Taxation                                             14 303             -        13 729
Employment benefit provisions                        55 721        56 697        49 955
Total liabilities                                   976 985       485 156       510 170 
Total equity and liabilities                      3 679 331     3 012 414     3 130 061 

Consolidated statement of comprehensive income
                                                  Unaudited     Unaudited 
                                                 six months    six months       Audited
                                                      ended         ended    year ended
                                                31 December   31 December       30 June 
                                            %          2018          2017          2018
                                       change         R'000         R'000         R'000
Healthcare services revenue              11.5     1 607 241     1 441 561     2 982 284 
Health Insurance    
Healthcare services operating costs      12.4    (1 346 946)   (1 198 253)   (2 433 582)
Healthcare services operating profit      7.0       260 295       243 308       548 702 
Operating Lease reversal (Note 3)                    63 527             -             -
Healthcare retail revenue                17.4       700 170       596 239     1 230 421 
Healthcare retail cost of sales                    (518 217)     (442 928)     (914 305)
Healthcare retail gross profit           18.7       181 953       153 311       316 116 
Healthcare retail operating costs                  (147 496)     (112 970)     (241 732)
Total healthcare operating profit        26.3       358 279       283 649       623 086 
Loss on sale of investments                               -                      (2 717)
Impairment of assets                                 (4 000)            -        (1 667)
Impairment of trade receivables                      (1 384)            -             -
Net finance and investment income                    (4 064)       20 882        43 481 
- Finance and investment income                      12 257        31 284        55 081 
- Fair value gain/(loss) in listed 
investment (Note 4)                                   8 859        (9 738)       (9 738)
- Finance costs: Operating Lease 
(Note 3)                                            (24 106)            -             -
- Finance costs                                      (1 074)         (664)       (1 862)
Share-based payment expense                          (3 500)         (375)       (3 501)           
Indemnity expense                                         -             -        (3 150) 
Share of associate profits                           11 230        11 772        23 626 
Profit before depreciation and 
amortisation                             12.9        356 561      315 928       679 158 
Depreciation                                         (27 747)     (25 635)      (51 109)
Depreciation: Right of use asset (Note 3)            (34 992)           -             -
Amortisation of intangible assets                    (54 267)     (41 667)      (89 603)
Profit before taxation                               239 555      248 626       538 446 
Taxation expense                                     (64 601)     (71 398)     (153 544)
Profit for the period after taxation                 174 954      177 228       384 902 
Other comprehensive (loss)/income                      1 865       (3 964)       (2 753)
Comprehensive net income for the period   2.1        176 819      173 264       382 149 
Attributable to:    
Equity holders of the Parent              6.2        123 044      115 902       253 858 
Non-controlling interest                              53 775       57 362       128 291 
                                                     176 819      173 264       382 149 

Notes
Note 1
Intangible assets
                                                        Carrying value   Carrying value 
                                                           31 December      31 December
                                                                  2018             2017
                                                                 R'000            R'000
Goodwill                                                       926 293          874 162 
Goodwill - AfroCentric Health                                  452 339          400 208 
Goodwill - WAD acquisition                                     473 954          473 954 
Intangible Assets                                              937 284          697 273 
Customer relationships - WAD acquisition                        58 911           67 859 
AfroCentric Health intangible assets                           269 859          179 513
AfroCentric Health PPA intangibles                              53 055           37 620 
Afrocentric Health Computer software                           216 804          141 893 
Fusion                                                         172 893          128 376
Nexus and other healthcare administration systems              309 920          244 782
Insurance fraud manager (IFM)                                  125 701           76 743 
                                                             1 863 577        1 571 435 

                                                          Amortisation     Amortisation
                                                           31 December      31 December
                                                                  2018             2017
                                                                 R'000            R'000
Goodwill                                                             -                -  
Goodwill - AfroCentric Health                                        -                -
Goodwill - WAD acquisition                                           -                -
Intangible Assets                                              (54 267)         (41 667)
Customer relationships - WAD acquisition                        (4 474)          (4 474)
AfroCentric Health intangible assets                           (23 422)         (17 557)
AfroCentric Health PPA intangibles                              (3 639)          (2 598)
Afrocentric Health Computer software                           (19 783)         (24 024)
Fusion                                                               -                -   
Nexus and other healthcare administration systems              (12 702)          (9 065)
Insurance fraud manager (IFM)                                  (13 669)         (10 571)
                                                               (54 267)         (41 667)

Note 2
Total group cash resources
                                                     Unaudited    Unaudited     Audited
                                                    six months   six months        year  
                                                         ended        ended       ended 
                                                   31 December  31 December     30 June
                                                          2018         2017        2018
                                                         R'000        R'000       R'000
Cash and cash equivalents                              138 848      282 075     212 918 
Managed funds and deposits (current)                    68 643      105 972     152 250 
Total current cash, managed funds and deposits         207 491      388 047     365 168 
Managed funds and deposits (non current)                68 053       62 517      65 028 
Total cash resources                                   275 544      450 564     430 196 

Note 3
On application of IFRS 16 'Leases', a right of use asset was recorded and the 
corresponding lease liability raised.

This resulted in depreciation on the right of use asset and interest unwinding on 
the liability being recognised in the statement of comprehensive income.

The operating lease reversal line, has been included to show the impact of rental 
expenses on operating profit.

Note 4
The increase attributed to the gains on the investment in the unit trusts. The group 
has benefited from the disinvestment in Jasco Investment which had fair value losses 
in the prior financial period.

Consolidated statement of changes in equity

                                                 Unaudited      Unaudited      Audited
                                                 six months    six months         year 
                                                      ended         ended        ended 
                                                31 December   31 December      30 June
                                                       2018          2017         2018
                                                      R'000         R'000        R'000
Balance at beginning of the period                2 619 891     2 379 053    2 379 053 
Opening balance adjustment                           (2 072)            -            -
Restated balance at the beginning of the year     2 617 819     2 379 053    2 379 053 
Share-based awards reserve                            3 500           375        3 501 
Distributions to shareholders                       (88 700)      (77 613)    (166 313)
Net profit for the period                           123 044       115 902      253 858 
Profit attributable to minorities                    53 775        57 362      128 291 
Business Combinations                                   170             -            -
Sanlam investment                                         -        55 874       55 874 
Recognition of attributable non-controlling                  
interest                                                (41)         (367)      17 171 
Distributions to non-controlling interests           (7 221)       (3 328)     (51 544)
Balance at end of the period                      2 702 346     2 527 258    2 619 891 
  
Consolidated statement of cash flows

                                                  Unaudited     Unaudited     Audited
                                                 six months    six months        year 
                                                      ended         ended       ended
                                                31 December   31 December     30 June
                                                       2018          2017        2018
                                                      R'000         R'000       R'000
Net cash inflow from operating activities            47 739        56 411     290 519 
Cash generated from operations                      199 719       177 496     552 695 
Net finance income                                   11 183        19 059      34 869 
Distribution to shareholders                        (95 921)      (80 941)   (217 857)
Dividends received                                    4 168         5 189       5 209 
Tax and other payments                              (71 410)      (64 392)    (84 397)
Net cash outflow from investing activities         (123 674)     (155 960)   (298 077)
Net additions to property and equipment             (47 090)     (133 778)   (212 664)
Net additions to intangible assets                 (133 596)     (102 372)   (310 845)
Net disposal of financial assets, investments                
and subsidiaries                                     52 314        77 301     218 166 
Repayment of loan by associate                        4 698         2 889       7 266 
Net cash outflow from financing activities                -        23 850    (138 601)
Net second tranche settlement                                           -    (138 601)
Effect of foreign exchange benefit                    1 865        (3 964)     (2 661)
Net increase in cash and cash equivalents           (74 070)      (79 663)   (148 820)
Cash and cash equivalents at beginning of                    
the period                                          212 918       361 738     361 738 
Cash and cash equivalents at end of the                      
period (Note 2)                                     138 848       282 075     212 918 

Segmental analysis

                                                      Unaudited six months ended 
                                                          31 December 2018
                                                                 Profit        Total 
                                                    Revenue      before   tax assets
                                                      R'000       R'000        R'000
Healthcare SA*                                    1 439 659      97 528    3 977 012
Healthcare Africa**                                 100 375      28 732      146 112 
Healthcare Retail***                                700 170      29 018      492 890 
Total Healthcare                                  2 240 204     155 278    4 616 014 
Information technology                              311 268      82 890      591 532 
Other (including inter-segment elimination)        (244 061)      1 387   (1 528 215)
                                                  2 307 411     239 555    3 679 331 

                                                      Unaudited six months ended 
                                                          31 December 2017
                                                                 Profit         Total 
                                                    Revenue      before    tax assets
                                                      R'000       R'000         R'000
Healthcare SA*                                    1 339 982     126 353     3 242 956 
Healthcare Africa**                                  94 117      24 586       136 925 
Healthcare Retail***                                596 239      44 625       395 106 
Total Healthcare                                  2 030 338     195 564     3 774 987 
Information technology                              288 533      56 061       478 646 
Other (including inter-segment elimination)        (281 071)     (2 999)   (1 241 219)
                                                  2 037 800     248 626     3 012 414 

 
                                                        Audited year ended
                                                           30 June 2018
                                                                 Profit         Total
                                                   Revenue   before tax        assets
                                                     R'000        R'000         R'000
Healthcare SA*                                   2 788 428      225 986     3 376 318 
Healthcare Africa**                                184 910       57 302       144 233 
Healthcare Retail***                             1 230 421       88 806       437 952 
Total Healthcare                                 4 203 759      372 094     3 958 503 
Information technology                             580 845      168 779       511 217 
Other (including inter-segment elimination)       (571 899)      (2 427)   (1 339 659)
                                                 4 212 705      538 446     3 130 061 

* Healthcare SA represents all the South African administration, managed care and IT 
Services.
** Healthcare Africa relates to our businesses in eSwatini Namibia, Zimbabwe, Botswana 
and Mauritius.
*** Healthcare Retail relates to the pharmaceutical businesses of Pharmacy Direct, 
Curasana Wholesaler, 26% interest in Activo Health as well as Mmed and Scriptpharm in 
the 2019 financial period.

Earnings attributable to equity holders

                                                 Unaudited      Unaudited       Audited
                                                six months     six months    year ended 
                                                     ended          ended       30 June
                                               31 December    31 December          2018
                                         %            2018           2017         R'000
                                    change           R'000          R'000    year ended
Number of ordinary shares in issue             554 377 328    554 377 328   554 377 328 
Weighted average number of ordinary 
shares                                         554 377 328    554 377 328   554 377 328 
Weighted average number of shares 
for diluted EPS                                558 667 328    554 377 328   558 667 328 
Basic earnings                                     120 996        119 866       256 611 
Adjusted by:                                         2 930            242         4 305 
- Reversal of impairment                             4 000                        1 285 
- Loss on disposal of assets                           151            471         3 428 
Total tax adjustments                                  (42)          (132)        1 325 
Total non-controlling interest 
adjustments                                         (1 179)           (97)       (1 733)
Headline earnings                                  123 926        120 108       260 916 
Earnings per share (cents)    
- Attributable to ordinary shares 
  (cents)                              1.0           21.83          21.62         46.29 
- Fully Diluted EPS (cents)                          21.66          21.62         45.93 
Headline earnings per share (cents)    
- Attributable to ordinary shares 
  (cents)                              3.1           22.35          21.67         47.06 
- Fully Diluted HEPS (cents)                         22.18          21.67         46.70 

Normalised earnings (non IFRS measure)

                                                 Unaudited      Unaudited    
                                                six months     six months       Audited
                                                     ended          ended    year ended 
                                               31 December    31 December       30 June
                                         %            2018           2017          2018
                                    change           R'000          R'000         R'000
Heading earnings                                   123 926        120 108       260 916
Adjusted by:                                             -              -         3 150 
- Sanlam indemnity expense                               -              -         3 150
- Interest on liability                                  -              -             -
Normalised Headline earnings                       123 926        120 108       264 066
Normalised Headline earnings per 
share (cents)    
- Attributable to ordinary shares 
  (cents)                              3.1           22.35          21.67         47.63 
- Fully Diluted HEPS (cents)           2.4           22.18          21.67         47.27

The adjusting amounts have no tax and non-controlling interest implications.

Company information
AfroCentric Investment Corporation Limited
Incorporated in the Republic of South Africa
Registration number 1988/000570/06
JSE Code: ACT
ISIN: ZAE 000078416
('AfroCentric' or 'the Company' or 'the Group')

Registered Office
37 Conrad Rd, Florida North 1709

Sponsor
Sasfin Capital (a member of the Sasfin group)

Company Secretary
B Mokale

Group Investor Relations
Nosipho Phewa
investor-relations@afrocentric.za.com
Tel: +27 11 671 2475

Directors
ATM Mokgokong** (Chairperson)
MJM Madungandaba** (Deputy Chairperson)
AV Van Buuren*** (CEO)
JW Boozaaier*** (CFO)
SE Mmakau*** (CIO)
WH Britz***
A Banderker**
LL Dhlamini* (Lead)
JB Fernandes*
ND Munisi**
S Zinn*
HG Motau*

*independent non-executive   
**non-executive   
***executive

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