DURBAN – Pharmaceutical company Adcock Ingram reported a 17 percent surge in earnings for the six months to end December, which saw its shares rally over 2 percent on the results.
The group reported a 17 percent increase in trading profit to R485 million, boosted by its diversified portfolio and growth in market share.
On Monday the share price rallied 6.3 percent after it announced that it won a R1.8 billion antiretroviral (ARV) tender from the government.
Its shares yesterday rose by 2.29 percent to close at R66.50.
Turnover increased by 15.6 percent to R3.6bn, up from R3.11bn compared to last year, with the group stating that it benefited from the inclusion of Genop from the beginning of January last year.
Adcock acquired 100 percent of local medical instrument and pharmaceutical company Genop for an undisclosed amount in January last year.
However, on a like-for-like basis, excluding Genop, turnover was up 7.4 percent, supported by an increase in volume of 5 percent, with mix and price contributing the balance.
“Price increases were realised in the consumer segment, but offset to a large extent by price reductions in the other segments due to competitive market conditions and pressure from funders to lower prices of certain prescription medicines,” the group said.
Headline earnings from continuing operations increased by 16.4 percent to R361.2m, up from R310.3m, while headline earnings per share (Heps) from continuing operations also increased by 16.4 percent to 217.2 cents a share, up from 186.6c last year.
The board declared an interim dividend of 100c a share, up by 16 percent.
Chief executive Andy Hall said: “The group’s positive set of results can be attributed to the resilience within its diversified portfolio with growth in sales and market share and continued focus on customer service and uncompromised product quality.”
Gross margin improved to 38.7 percent, driven by an advantageous sales mix and improved throughput at the Clayville factory.
Going forward, Hall said the group remained focused on improving its operational efficiency, growing the established brands and expanding its product range through the acquisition of non-regulated brands.