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Adcock to post loss amid turnaround

Johannesburg - Adcock Ingram, South Africa’s largest supplier of hospital products, said it will record a nine-month loss as new management attempts to turn around the company after a failed takeover bid.

The drugmaker will post a basic and headline loss per share in the nine months through June, the Johannesburg-based company said in a statement today.

A pharmacist counts pills in a pharmacy. File image: Reuters. Credit: REUTERS

Changes are being made to the structure of the business and the financial impact is still being assessed, it said.

Adcock was the subject of a 10-month battle for control after profit margins came under pressure from rising production costs and a weaker rand in 2012.

The changes are “unlikely to yield significant improvement in the short term,” Adcock said.

“The board however remains optimistic about the company’s long-term prospects.”

Adcock shares declined 0.4 percent to 52.10 rand as of the market close in Johannesburg, about 31 percent below the high end of a 74.50 rand to 75.78 rand takeover offer by CFR Pharmaceuticals SA of Chile, which collapsed earlier this year.

The stock has declined 27 percent in 2014, making it the fifth-worst performer on the FTSE/JSE Africa All Share Index.

CFR, Chile’s biggest drug maker, called off a 12.8-billion rand cash and stock offer to buy Adcock after Johannesburg-based Bidvest built a blocking stake.

Bidvest chief executive Brian Joffe became Adcock’s new chairman with Kevin Wakeford becoming chief executive. - Bloomberg News

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