Johannesburg - Pharma company Adcock Ingram, which has been in remedial mode for the past two years, has paid its debt down to R217 million during the full year.
In the year to June, the company grew turnover 7.5 percent to R5.5 billion, while its trading profit came in 16.9 percent higher at R606 million. It says normalised headline earnings were up by 20.1 percent to 238.6 cents and it trimmed its debt by R466 million.
The company also declared a dividend of 54c a share. It entered a reorganisation stage in 2014 and says this is now paying off.
“All divisions are benefiting from the divisional autonomy of the new structure, introduced during 2014,” says CEO Andy Hall.
“The progress is gratifying with the benefits of improved customer service and customer relationship management, translating into better financial and operational performance for the business.”
Hall says the most gratifying aspect was the cash generation in the business, which resulted in net debt for total operations over the past two years reducing from R1.1 billion at June 30, 2014 to R217 million at June 30, 2016. “This important indicator shows the positive outcome of the group’s restructure and focused management control.”
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However, Adcock notes. despite its more aggressive marketing effort during the year, the business, like others, “has had to endure an unstable economy, often punctuated by discordant politics and volatile currency conversion rates”.
“These dynamics tend to introduce additional costs into the business and, given the restrictive regulatory pricing regimes to which the company is bound, such disruptive circumstances generally prevent the company from adjusting product prices to recoup the unplanned costs incurred.”
Adcock notes the sale of its stakes in both the Ghanaian and Indian operating businesses are progressing well.
It notes, given its healthy cash generation over the past two years, it now has significant resources available to focus on expanding the product portfolio, particularly in non-regulated areas, through acquisitions and partnerships. Adcock ended the year with R200 million in cash.
IOL