Joffe looks to influence Adcock as Bidvest gains

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BR Joffe 0441[1]

Independent Newspapers

Brian Joffe. Photo: Simphiwe Mbokazi

Johannesburg - As another set of strong results from Bidvest suggested that it had the necessary capacity and skills to turn around pharmaceutical group Adcock Ingram, Brian Joffe said yesterday that he would like to see Jonathan Louw and the other executives at Adcock get the opportunity to demonstrate whether or not they were able to lead that turnaround.

“Maybe with better leadership the company will be able to deliver,” he added.

Joffe, the chief executive of Bidvest, was commenting after the release of Bidvest’s results for the six months to December last year. The highlights of the results were the 16 percent increase in headline earnings a share to R8.423 on 19 percent higher revenue and a cash dividend of R3.78 a share.

Shareholders have been offered a scrip distribution in lieu of a cash dividend, which Joffe said indicated that the company was preparing to deploy more cash as management expected its deal flow to increase “quite a lot”.

The strong results, which are underpinned by solid performances in almost all of the group’s operations across the globe, reflects Joffe’s contention that “Bidvest does not participate in recessions”.

He said the performance and mood of Bidvest management from the EU to Asia Pacific to South Africa was strong. He noted that its effective capital management and strong balance sheet gave it an advantage over smaller players when times were difficult.

Joffe said the South African operations turned in a “very good” performance during the six months and the group had achieved a reasonable performance last month and this month. His present forecast is for a reasonable second half.

“There are lots of reasons why a company might not perform well. You can make all the excuses in the world, but at the end of the day they don’t count for anything. You’ve got to make proper returns,” he said.

However, he added that he had been disappointed by the group’s African strategy and referred to “difficult bureaucracy” and difficulties getting licences, exacerbated by “our own inexperience”.

The recently acquired 34.5 percent stake in Adcock will be included in Bidvest’s results from February 10. Joffe said the contribution would be negative, adding “hopefully that will be for a short period”.

But alert to competition regulations, Joffe stressed that Bidvest was not in control of Adcock or its board. “We do not control the board, they’re not our appointees. We would like to influence the direction of the company, but we will do that through the board.”

He said it was his intention to use his position as chairman of Adcock to “try and persuade management and the board to adopt a different approach to the way they do business”.

Bidvest rose 2.51 percent to close at R251.25, while Adcock inched 2c lower to R60.48. - Business Report


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