Adcock suffers from lack of colds and flu

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Adcock suffers from lack of colds and flu

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Published Date: 2021-02-25 | Source: Stephen Gunnion | Author: Stephen Gunnion

Adcock suffers from lack of colds and flu

The pharmaceuticals group says sales of cold and flu medication, as well as hospital products, remain under pressure.

Adcock Ingram says it has continued to experience good demand for immune-boosting products and increased sales of renal products. However, sales of cough, cold and flu medication remain under pressure after social distancing resulted in the absence of a flu season.

Releasing its interim results, the pharmaceuticals group said demand for branded prescription medication also remained under pressure in the six months to end-December as South Africans paid fewer visits to the doctor. Similarly, the postponement of elective surgeries as hospitals freed up space for Covid-19 patients resulted in reduced demand for hospital products.

Revenue for the six months to end-December rose 3.6% to R3.76 billion, supported by last year's acquisition of Plush Professional Leather Care. Gross profit declined by 6.9% to R1.3 billion, impacted by an unfavourable exchange rate, higher than inflationary wage and utility increases, and a higher proportion of ARVs in its sales mix. Cost saving initiatives resulted in a 4.3% decline in operating expenses. Headline earnings per share came in 15% lower at 186.5c. It declared an interim dividend of 80c per share.

Last week, Adcock Ingram reached a deal to buy a portfolio of 17 prescription, over the counter (OTC) and hospital brands from Aspen Pharmacare, with historic annualised revenue of approximately R95 million. It expects to close the deal next month.

Separately, the company said the Public Investment Corporation had reduced its shareholding to 9.6% from 14.9% previously.

Its shares fell 3.8% to R43.30 yesterday.





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