ANDREW Hall, the chief executive of Adcock Ingram, said yesterday that the company had returned to double-digit growth and was now poised for further investment in non-price regulated products after soaring above early shocks from the Covid-19 pandemic.
Adcock Ingram, a pharmaceuticals manufacturer, reported a 16 percent surge in revenues to R4.3 billion for the interim period to the end of December, which boosted its trading profit by as much as 25 percent to R543 million.
Headline earnings per share resultantly surged 30 percent to 242.3 cents.
“If you look back to December, 2019 which is the sort of benchmark for the pre-Covid-19 era, you will see that overall, during the past six months (the business) is up in double digits across revenue and trading profit,” Hall said during a conference call after announcing the financials.
“The business has recovered,” he said.
New products contributed about 6 percent to the revenue mix while the hospitals division registered a 13 percent rise in turnover on improved demand for therapies due to “increased hospitalisations”. There was also strong demand during the period under review for over-the-counter (OTC) and consumer healthcare products.
The company in a commentary accompanying its financials said, “The Group has achieved very healthy growth in turnover, which with some improvement in the exchange rate, manufacturing efficiencies and cost control, has yielded an exceptional increase in trading profits and excellent cash generation.”
After the resurgence in its performance, Adcock Ingram has now declared an interim dividend of 104 cents per share for the half-year period. Exchange rate movements have also been favourable for Adcock Ingram, with the 2022 Single Exit Price increase of 3.5 percent also set to “assist in protecting the gross margin” for the company.
As part of its prospects for the future, Adcock Ingram said it would continue to “seek-out investment opportunities for non-price-regulated brands” while it set to introduce about four “additional” products. The company believes that the non-price-regulated segment is crucial for the company’s diversification and revenue growth strategy and prospects.
About 83 percent of the company’s staff is now vaccinated against Covid-19 after it recorded 824 cases since the beginning of the pandemic.
The company is now set to announce a decision on mandatory vaccinations.
“We are fully supportive of vaccination for our people, and so far about 83 percent of our workforce is vaccinated against Covid-19,” said Hall.
Adcock share price closed the day 5.65 percent higher at R52.52 on the JSE yesterday.
BUSINESS REPORT ONLINE