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AIP
AIP
AIP - Adcock Ingram - Unaudited interim results for the six-month period ended
31 March 2010
ADCOCK INGRAM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 2007/016236/06
Share code: AIP
ISIN: ZAE000123436
("Adcock Ingram" or "the company" or "the Group")
Unaudited interim results for the six-month period ended 31 March 2010
"We remain committed to our vision of growing Adcock Ingram, both organically
and by prudent acquisition, into a leading, world-class branded healthcare
company that creates long-term value for our shareholders".
CEO, Jonathan Louw
About Adcock Ingram
Adcock Ingram provides an extensive portfolio of branded and generic medicines,
has a strong presence in over-the-counter brands, is South Africa`s largest
supplier of hospital and critical-care products and supplies established brand
name consumables and equipment to medical, research and servicing pathology
laboratories.
Salient features
Turnover increased 7% to R2,0 billion
Profit before tax increased 9% to R546 million
HEPS improved 11% to 226,5 cents
Cash on hand: R918 million
Dividend per share increased 11% to 78 cents
Consolidated statements of comprehensive income
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Note R`000 Change R`000 R`000
REVENUE 2 2 105 494 8% 1 955 720 4 115 265
TURNOVER 2 2 028 398 7% 1 896 599 4 005 153
Cost of sales (977 969) (961 632) (1 968 238)
Gross profit 1 050 429 12% 934 967 2 036 915
Selling and (241 681) (201 669) (421 969)
distribution expenses
Marketing expenses (81 076) (53 864) (130 026)
Research and (31 528) (31 688) (64 472)
development expenses
Fixed and (161 681) (145 525) (375 619)
administrative expenses
Operating profit 534 463 6% 502 221 1 044 829
Finance income 2 70 665 49 653 100 493
Finance costs (65 374) (59 513) (118 224)
Dividend income 2 6 431 9 468 9 619
Profit before taxation 546 185 9% 501 829 1 036 717
Taxation (147 470) (142 845) (246 835)
Net profit for the 398 715 11% 358 984 789 882
period
Other comprehensive 3 716 (5 073) (12 910)
income
Exchange differences 1 560 2 323 (5 045)
on translation of
foreign operations
Movement in cash flow 2 156 (7 396) (7 865)
hedge accounting
reserve, net of tax
Total comprehensive 402 431 353 911 776 972
income for the period,
net of tax
Net profit attributable
to:
Owners of the parent 393 744 354 858 782 396
Minority interests 4 971 4 126 7 486
398 715 358 984 789 882
Total comprehensive
income attributable to:
Owners of the parent 397 460 349 785 769 486
Minority interests 4 971 4 126 7 486
402 431 353 911 776 972
Number of ordinary 173 849 173 289 173 626
shares in issue (000`s)
Weighted average number 173 766 173 224 173 206
of ordinary shares on
which headline earnings
and basic earnings per
share are based (000`s)
Diluted number of 174 231 174 154 173 810
shares (000`s)
Basic earnings per 226,6 11% 204,9 451,7
ordinary share (cents)
Diluted basic earnings 226,0 11% 203,8 450,1
per ordinary share
(cents)
Headline earnings per 226,5 11% 204,8 450,0
ordinary share (cents)
Diluted headline 225,9 11% 203,7 448,4
earnings per ordinary
share (cents)
Reconciliation between
earnings and headline
earnings:
Earnings as reported 393 744 354 858 782 396
Adjustments
Profit on disposal of (238) (142) (3 050)
property, plant and
equipment
Headline earnings 393 506 11% 354 716 779 346
Consolidated group statement of changes in equity
Attributable to holders of the parent
Non-distri-
Share Share Retained butable
capital premium income reserves
R`000 R`000 R`000 R`000
Balance at 30 September 17 306 1 193 662 340 117 77 306
2008
Share issue 23 6 091
Share-based payment 5 966
expense
Dividends
Total comprehensive 354 858 (5 073)
income
Net profit for the 354 858
period
Other comprehensive (5 073)
income
Balance at 31 March 2009 17 329 1 199 753 694 975 78 199
Share issue 34 4 101
Share-based payment 7 132
expense
Dividends (120 571)
Total comprehensive 427 538 (7 837)
income
Net profit for the 427 538
period
Other comprehensive (7 837)
income
Balance at 30 September 17 363 1 203 854 1 001 942 77 494
2009 (audited)
Share issue 22 2 383
Share-based payment 133
expense
Dividends (138 922)
Total comprehensive 393 744 3 716
income
Net profit for the 393 744
period
Other comprehensive 3 716
income
Balance at 31 March 2010 17 385 1 206 237 1 256 764 81 343
(unaudited)
Attributable to
holders of the
parent
Total
attributable
to ordinary
share- Minority
holders interests Total
R`000 R`000 R`000
Balance at 30 September 1 628 391 22 612 1 651 003
2008
Share issue 6 114 6 114
Share-based payment 5 966 5 966
expense
Dividends (5 155) (5 155)
Total comprehensive 349 785 4 126 353 911
income
Net profit for the 354 858 4 126 358 984
period
Other comprehensive (5 073) (5 073)
income
Balance at 31 March 2009 1 990 256 21 583 2 011 839
Share issue 4 135 4 135
Share-based payment 7 132 7 132
expense
Dividends (120 571) (120 571)
Total comprehensive 419 701 3 360 423 061
income
Net profit for the 427 538 3 360 430 898
period
Other comprehensive (7 837) (7 837)
income
Balance at 30 September 2 300 653 24 943 2 325 596
2009 (audited)
Share issue 2 405 2 405
Share-based payment 133 133
expense
Dividends (138 922) (838) (139 760)
Total comprehensive 397 460 4 971 402 431
income
Net profit for the 393 744 4 971 398 715
period
Other comprehensive 3 716 3 716
income
Balance at 31 March 2010 2 561 729 29 076 2 590 805
(unaudited)
Consolidated statements of financial position
Unaudited Unaudited Audited
31 Mar 31 Mar 30 Sep
2010 2009 2009
R`000 R`000 R`000
ASSETS
Property, plant and equipment 679 128 540 584 599 746
Deferred tax 19 241 12 123 20 030
Investments 138 037 162 488 138 037
Investment in associate 12 200 - 12 200
Intangible assets 334 869 216 862 304 240
Non-current assets 1 183 475 932 057 1 074 253
Inventories 553 392 616 855 583 704
Trade and other receivables 1 047 007 1 051 284 1 036 605
Cash and cash equivalents 918 007 426 558 692 938
Current assets 2 518 406 2 094 697 2 313 247
Total assets 3 701 881 3 026 754 3 387 500
EQUITY AND LIABILITIES
Capital and reserves
Issued share capital 17 385 17 329 17 363
Share premium 1 206 237 1 199 753 1 203 854
Non-distributable reserves 81 343 78 199 77 494
Retained income 1 256 764 694 975 1 001 942
Total shareholders` funds 2 561 729 1 990 256 2 300 653
Minority interests 29 076 21 583 24 943
Total equity 2 590 805 2 011 839 2 325 596
Long-term liabilities 206 431 213 009 117 076
Post-retirement medical liability 15 487 14 685 14 298
Deferred tax 7 023 5 960 6 683
Non-current liabilities 228 941 233 654 138 057
Bank overdraft - - 221
Trade and other payables 607 496 533 808 630 743
Short-term borrowings 215 899 171 870 194 405
Provisions 38 107 25 809 68 752
Taxation payable 20 633 49 774 29 726
Current liabilities 882 135 781 261 923 847
Total equity and liabilities 3 701 881 3 026 754 3 387 500
Consolidated abridged statements of cash flows
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Note R`000 R`000 R`000
Cash flows from operating
activities
Operating profit before 549 061 558 926 1 176 280
working capital changes
Working capital changes 666 (232 634) (46 120)
Cash generated from operations 549 727 326 292 1 130 160
Finance income 70 665 49 653 100 493
Finance costs (65 374) (59 513) (118 224)
Dividend income 6 431 9 468 9 619
Dividends paid (139 760) (5 155) (125 726)
Taxation paid (154 646) (111 166) (242 635)
Net cash inflow from operating 267 043 209 579 753 687
activities
Cash flows from investing
activities
Purchase of intangible assets - - (11 025)
Cost of business acquired 6 (35 000) - (79 049)
Purchase of property, plant (118 877) (125 512) (228 609)
and equipment
Proceeds on disposal of 708 225 4 163
property, plant and equipment
Cost of investment in - - (12 200)
associate
Net cash outflow from (153 169) (125 287) (326 720)
investing activities
Cash flows from financing
activities
Proceeds from issue of share 2 405 6 114 10 249
capital
Loans raised/(repayment of 109 138 (54 073) (138 966)
borrowings)
Net cash inflow/(outflow) from 111 543 (47 959) (128 717)
financing activities
Net increase in cash and cash 225 417 36 333 298 250
equivalents
Net foreign exchange (127) - (831)
difference on cash and cash
equivalents
Movement in reserves - (5 073) -
Cash and cash equivalents at 692 717 395 298 395 298
beginning of period
Cash and cash equivalents at 918 007 426 558 692 717
end of period
Notes to the consolidated financial statements
1 BASIS OF PREPARATION
1.1 Introduction
The abridged interim results have 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 AC500 standards as issued by the Accounting Practices Board or its
successor.
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 new and amended IFRS interpretations during the year:
- IFRS 2 (Revised) Share-based Payment - Vesting Conditions and Cancellations
- IFRS 3 Business Combinations
- IFRS 7 (Revised) Financial Instruments: Disclosures - Improving Disclosures
about Financial Instruments
- IAS 23 Borrowing Costs
- IAS 27 Consolidated and Separate Financial Statements
- Improvements to IFRS May 2008 and April 2009 (improvements effective for the
current financial year)
The adoption of the standards and interpretations above did not have any effect
on the financial performance or position of the group. They did however give
rise to additional disclosures.
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R`000 R`000 R`000
2 REVENUE
Revenue comprises
- Turnover 2 028 398 1 896 599 4 005 153
- Finance income 70 665 49 653 100 493
- Dividend income 6 431 9 468 9 619
2 105 494 1 955 720 4 115 265
3 SEGMENTAL REPORTING
Turnover
Over the Counter 634 817 592 011 1 288 966
Prescription 748 696 700 303 1 466 736
Pharmaceuticals 1 383 513 1 292 314 2 755 702
Hospital Products 644 885 604 285 1 249 451
2 028 398 1 896 599 4 005 153
Operating income
Over the Counter 207 900 189 402 402 448
Prescription 203 810 202 813 421 788
Pharmaceuticals 411 710 392 215 824 236
Hospital Products 122 753 110 006 220 593
534 463 502 221 1 044 829
4 INVENTORY
The amount of inventories written 20 279 17 278 27 900
down recognised as an expense in
cost of inventories
5 PROPERTY PLANT AND EQUIPMENT
Capital commitments
- contracted 552 414 68 270 143 693
- approved 291 054 253 056 789 091
843 468 321 326 932 784
31 Mar
2010
R`000
6 BUSINESS COMBINATIONS
Unique Formulations
On 17 November 2009, the group acquired 100% of the assets
of Unique Formulations, a vitamin and mineral supplement
company based in Cape Town, as a going concern.
The fair value of the identifiable assets as at the date of
acquisition was:
Property, plant and equipment 196
Intangible assets 17 427
Inventories 2 024
Accounts receivable 2 669
Accounts payable (2 541)
Fir value of net assets 19 775
Goodwill 15 225
Net cash purchase price 35 000
7 POST BALANCE SHEET EVENTS
7.1 Ayrton Drug Manufacturing Limited (Ayrton)
The company completed the acquisition of a 65,59% stake in a leading Ghanaian
drugs company, Ayrton, on 1 April 2010 for R121 million. The determination of
the fair value of the identifiable assets as at the date of acquisition, in
accordance with IFRS 3 Business Combinations is in the process of being
determined.
7.2 Broad-based Black Economic Empowerment (BEE) Transaction
At the general meeting of Adcock Ingram ordinary shareholders held on 9 April
2010, all of the ordinary and special resolutions required to authorise the
implementation of the BEE Transaction were duly passed by the requisite majority
of votes. The BEE Transaction is implemented through a specific issue of 25,9
million "A" and "B" shares with a R93,75 million unencumbered equity
contribution. All conditions precedent to the implementation of the BEE
Transaction were subsequently fulfilled.
7.3 Indigenous Systems (Pty) Limited
On 1 April 2010, the group acquired 100% of the assets of Indigenous Systems
(Pty) Limited as a going concern, for R13 million. The determination of the fair
value of the identifiable assets as at the date of acquisition, in accordance
with IFRS 3 Business Combinations is in the process of being determined.
7.4 Call option process by Baxter Healthcare SA (Baxter) in respect of Adcock
Ingram Critical Care (Pty) Limited (AICC)
On 8 February 2010, Adcock Ingram received formal notification from Baxter of
its intention to initiate the call option process in terms of which Baxter is
entitled to purchase 50% +1 share of the share capital of AICC. Baxter has
completed its due diligence investigation and the parties are in the process of
finalising the terms of a shareholders` agreement. The parties have been unable
to agree the fair market value of AICC, and according to the procedure outlined
in the option agreement have referred the determination thereof to an
independent expert, KPMG. This valuation will be final and binding upon both
parties. It is expected that KPMG will make its determination on or about 10
June 2010. Thereafter, Baxter has up to two months in which it is entitled to
exercise its call option. In the event the exercise is not forthcoming, control
of the business shall remain with Adcock Ingram. In the event that Baxter does
exercise its call option and the transaction is successfully implemented, Adcock
Ingram has a put option in respect of its 49% shareholding. The put option
process includes a valuation request period of up to four months and a valuation
agreement or independent expert arbitration process of up to two months.
FINANCIAL REVIEW
Headline earnings
During a period in which our markets recovered slowly from recessionary
conditions, Adcock Ingram achieved headline earnings for the six months ended 31
March 2010 of R393,5 million. This represents a 10,9% increase over the
comparable figure for 2009 of R354,7 million. This translates into an
improvement of 10,6% at both the headline earnings per share (HEPS) and earnings
per share (EPS) level.
Turnover
The impact of our acquisitions of TLC and Unique Formulations supported turnover
growth of 7% to R2,028 million (2009: R1,897 million), with growth in existing
businesses of 4% despite the loss of contract manufacturing revenue.
Price increases averaged 5% across all business segments. Government granted a
13,2% Single Exit Price (SEP) increase in March 2009. In the Prescription
segment the SEP increase was implemented only on products where market
conditions allowed, and the division experienced price decreases on much of the
generics portfolio. Consequently the segment realised an overall price rise of
6%. Over-the-counter (OTC) turnover growth reflects an 8% price increase and the
Hospital Products division achieved a 3% increase in pricing.
Continued volume growth in anti-retrovirals (ARVs) and the Hospital Products
division was off-set by declining volumes in the OTC segment as a result of
continued consumer down-trading. The value of contract manufacturing also
declined from R38,7 million in 2009 to R5,4 million.
Profits
Gross profit for the six months increased by 12% to R1,050 million (2009: R935
million) with overall margins improving from 49,3% to 51,8% (September 2009:
50,9%).
The gross margin percentage in Prescription and OTC improved to 56,5% (September
2009: 53,9%) and 59,7% (September 2009: 58,1%) respectively, while in the
Hospital Products division it reduced slightly to 38,6% (September 2009: 39,8%).
Gross margins across all businesses benefited from the strengthening of the
Rand, which affected imported raw materials and finished products, but this was
partially offset by a higher proportion of lower margin ARVs and continued
pricing pressure in the generic portfolio.
Factory upgrades at Clayville and Aeroton have adversely affected production
with periods of significant downtime to ensure product safety, and overtime
costs to make up production levels. These costs have negatively impacted the
business to the extent of R11,0 million in the period under review.
Operating profit improved by 6% to R535 million (2009: R502 million) with the
percentage on sales reducing slightly from 26,5% to 26,4% (September 2009:
26,1%). Operating expenses increased by 19% to R516 million (2009: R433
million), the primary drivers being increased distribution costs as a result of
an additional facility and staff in Midrand, and higher marketing spend. IFRS 2
expenses increased from R10,3 million in the comparable period to R22,9 million
in the current period.
After net finance income and dividends received, profit before tax grew 9% to
R546 million (2009: R502 million). The effective tax rate for the period was
27,0%, resulting in profit after tax growing 11% to R399 million (2009: R359
million).
Cash flows and financial position
Cash generated from operations was a very satisfactory R550 million (2009: R326
million). This is reflective of sound working capital management in the period
under review, with overall levels remaining virtually flat.
Trade and other accounts receivable increased by just R9 million from September
2009 with trade debtors` days at the end of the period at approximately 58 days,
an improvement from the 62 days reported in September 2009. This was achieved
despite a large increase in amounts due from national and provincial governments
on state tender business. The company and government are engaged in a
constructive process to facilitate collection of overdue balances.
Inventory decreased by R33 million in the six-month period, now representing 103
days` purchases, compared with 105 days at September 2009. This improvement
results from some planned inventory reductions, the strength of the Rand and
Aeroton producing inventory marginally below optimal levels.
After net finance income, dividends and taxation, cash generated was R267
million (2009: R210 million).
The Group secured facilities of R800 million during the period to fund the
extensive regulatory upgrade at the Aeroton operation and the construction of
the high-volume liquids facility at Clayville. Total capital expenditure across
the various sites during the six months was R119 million.
During the period, cash equivalents increased by R225 million, giving the
business a gross cash position of R918 million (September 2009: R692 million)
and net cash of R496 million (September 2009: R382 million).
Dividends
We are pleased to announce an interim dividend of 78 cents per share (March
2009: 70 cents) representing an increase of 11%.
BUSINESS OVERVIEW
Pharmaceutical Division
We continued with the upgrading of all of our facilities during the period under
review and, with limited disruption to supply, this has unlocked additional
capacity, which is much needed for the winter season. The new integrated
distribution infrastructure is now operating effectively and enabling us to
offer a differentiated delivery service both to customers` warehouses and to
individual stores, although at an incremental cost over the prior period.
Management expects further efficiencies from the distribution system without
compromising customer service, including distribution for some of our strategic
partners.
During the period under review, it was evident in both pharmacy and fast moving
consumer goods (FMCG) sales that the consumer has continued to come under
financial pressure. In the FMCG channel, sales of analgesics and cough and cold
remedies have declined. However, we have seen growth in tonics and supplements
in the FMCG channel as consumers have personally selected products that meet
their basic healthcare needs. In the pharmacy channel, we have experienced
growth in the economy brands as consumers and funders have opted for lower
priced products in the trade-off between efficacy and price. There has, however,
been some improvement in sales of the premium brands towards the end of the
second quarter. Competitive pressures on the price of Simvastatin negatively
affected turnover, but volumes increased over the prior year. Demand from the
public sector for ARVs continues to grow and Adcock Ingram was able to meet the
strict service requirements of the State.
The acquisition of Ayrton Drug Manufacturing (Ayrton) in Ghana was finalised,
effective 1 April 2010. The next six months will focus on deploying Adcock
Ingram`s expertise in the operations and leveraging synergies.
Tender Loving Care (TLC) and Unique are being integrated into our pharmaceutical
business across all functional areas in order to improve operating efficiencies.
Growth strategies have been developed and are being rolled out, resulting in
increased investment in the brands. The benefit of these initiatives will be
evident in the next financial year.
The Kenyan operation is showing good growth, particularly from its strong
pharmaceutical brands. In particular, Dawanol sales are showing encouraging
growth in Kenya and the product is now available in Uganda and other East
African markets via local distribution partners. Good growth is expected in the
next period as new Prescription and OTC products are registered.
The pharmaceutical business has also attracted new principal business, both in
South Africa and Kenya, and these are being integrated into the current business
operations.
Hospital Products Division
This division is comprised of Adcock Ingram Critical Care (AICC) and The
Scientific Group.
Adcock Ingram Critical Care
Review of operations
The financial performance for the six months ended 31 March 2010 reflects an
increase in market share and improved operating efficiencies.
The 11,1% increase in turnover was achieved despite the late start of tender
business and registration delays for new plasma expanders and the oncology
range, now scheduled for launch at the end of May. Particularly pleasing was
volume growth of 7% in a challenging market.
Turnover in the transfusion therapy business has grown by 29% over last year.
AICC has actively endorsed various drives undertaken by the South African
National Blood Service (SANBS) and has successfully secured a three year
agreement with SANBS effective from 1 April 2010.
AICC has been engaged in dialogue with the Department of Health over SEP,
following the Company`s application for exemption from the price per millilitre
regulations. A submission for the 2010 increase has been made and AICC is
awaiting the outcome of those applications.
AICC successfully tendered for more than 85% of the national state tender for
intravenous fluids - delayed until March of this year. AICC has also been
awarded more than 95% of the tender for renal products. However, tender delays
have resulted in deferral of sales for two months and the benefits of these
tender successes will now be seen in the second half and are well set to run
until end February 2012.
The Scientific Group
The first half of 2010 has been a difficult trading period. Turnover declined by
6,5%, but improved margins and well controlled expenses have resulted in growth
in operating profit over the comparative period. The decline in revenue was a
result of reduced sales in the biosciences and export divisions, delayed funding
for local research projects and reduced donor funding into sub-Saharan Africa.
The strengthening of the Rand also required that price decreases be passed onto
customers. On the positive side our medical equipment sales into hospitals have
shown double digit growth.
In line with our strategy to increase presence in the medical devices market, we
have completed the acquisition on 1 April 2010 of the Indigenous Systems
business, which specialises in electro-surgery and other surgical medical
devices and consumables. The acquisition brings a reputable product portfolio
and a team with strong relationships within the private hospital groups.
We expect to see an improved performance from bioscience and export over the
second half, and we will continue to look for growth opportunities in the larger
medical devices market as we start to integrate Indigenous Systems into The
Scientific Group.
REGULATORY ENVIRONMENT
Adcock Ingram expresses sympathy to the family and colleagues of the former
Deputy Minister of Health, Dr. Molefi Sefularo, whose passing is a tragic loss
to the healthcare industry.
Adcock Ingram welcomes President Jacob Zuma`s announcement on the implementation
of the new HIV/AIDS treatment guidelines. We support this policy shift focused
on both treatment and prevention. Adcock Ingram also supports Government`s HIV
counselling and testing campaign launched recently. We continue to engage
actively with Government on the need to support local manufacture of ARVs.
The Department of Health has announced an SEP increase of 7,4% on scheduled
pharmaceutical products, which will be implemented in the Pharmaceutical
Division in June 2010.
TRANSFORMATION
Adcock Ingram remains committed to meaningful broad-based black economic
empowerment (BBBEE). At the general meeting held on 9 April 2010, the Company`s
shareholders voted overwhelmingly in favour of the R1,3 billion BEE ownership
transaction. This means that qualifying black employees and Adcock Ingram`s
selected BEE strategic partners (Kagiso Strategic Investments III (Pty) Limited,
Kurisani Youth Development Trust and Mookodi Pharma Trust) have acquired 13% of
the total enlarged issued share capital of Adcock Ingram. The BEE partners were
chosen for their business and broad-based empowerment credentials, as well as
for healthcare and education initiatives they provide in our communities. Post
the implementation of this transaction, Adcock Ingram has effective black
ownership of more than 25%, if mandated investments and foreign operations are
excluded from Adcock Ingram`s enlarged issued share capital, thus achieving
Level 4 BEE contributor status.
PROSPECTS
Despite lower volumes in our OTC segment during the period under review, we have
grown market share and remain positive about our growth prospects in this
sector. The successful integration of Tender Loving Care and Unique Formulations
into our OTC portfolio will boost this segment in the future.
We are encouraged by the steady and growing demand for ARVs by the public sector
and we believe this will continue to be a key growth driver. We look forward to
the next ARV tender in the coming months as we remain committed to supporting
government in its rollout of ARVs. Adcock will offer a range of new generation
ARV-molecules and combination ARVs before the next South African government
tender. We are confident that our recent pipeline innovations obtained through
partnerships with multi-national partners including Celltrion, Lilly, Novartis
and Norgine will bear fruit.
Adcock Ingram was well received by the Ghanaian market following the acquisition
of Ayrton. Integration of Ayrton as a subsidiary is progressing well and we are
confident that we now have a platform to grow sales in Ghana and other West
African markets.
We are very pleased to see the volume growth in AICC, driven in part by national
tender business and we remain confident that volume growth in the business will
improve further in the coming months.
The upgrades and international accreditation to our manufacturing facilities and
the improvements in our distribution network are yielding positive results in
efficiencies, customer service levels and attracting further multi-national
partnerships.
Adcock Ingram continues to seek opportunities to access high growth markets and
expects to further diversify its earnings beyond the borders of South Africa. We
remain committed to our vision of growing Adcock Ingram both organically and by
prudent acquisition, into a leading world-class branded healthcare company. We
will leverage our capacity in the supply chain, as well as our extensive product
pipeline and competence in brand building in new markets and we are well placed
for acquisitive growth, given our significant financial capacity.
Whilst current economic conditions remain challenging, we expect volume growth
in our core businesses in the second half of the year. We are seeing improved
trading activity across all sectors and we expect gross margins to be maintained
provided the Rand remains at current levels.
The financial information, on which the above prospects statement is based, has
not been reviewed or reported on by the Company`s external auditors.
For and on behalf of the board
KDK Mokhele JJ Louw
Chairman Chief Executive Officer
DECLARATION OF ORDINARY DIVIDEND
Notice is hereby given that an interim cash dividend of 78 cents per share has
been declared in respect of the six months ended 31 March 2010.
The salient dates for the payment of the interim dividend are detailed below:
Last date to trade: Thursday, 10 June 2010
Shares trade "ex" dividend: Friday, 11 June 2010
Record date: Friday, 18 June 2010
Payment date: Monday, 21 June 2010
Share certificates may not be dematerialised or rematerialised between Friday,
11 June 2010 and Friday, 18 June 2010, both dates inclusive.
By order of the board
R Naidoo
Company Secretary
Johannesburg
24 May 2010
Directors:
K D K Mokhele (Chairman)*
J J Louw (Chief Executive Officer)
E K Diack*
A G Hall (Chief Financial Officer)
T Lesoli*
C D Raphiri*
L E Schonknecht*
R I Stewart*
A M Thompson*
*Non-executive
Company secretary:
R Naidoo
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
Postal address:
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, cnr Fredman Drive and Rivonia Road,
Sandton, 2196
Attorneys:
Read Hope Phillips, 30 Melrose Boulevard, Melrose Arch, 2196
www.adcock.com
Midrand
25 May 2010
Sponsor to Adcock Ingram
Deutsche Securities (SA) (Proprietary) Limited
Date: 25/05/2010 07:05:15 Produced by the JSE SENS Department.
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