Adcock Ingram’s turnover increases by 6% with increased demand for immune-boosters during COVID-19

The Adcock Ingram Group delivered a healthy set of results in the year ended 30 June 2021, with turnover increasing by 6%, despite the effects of the COVID-19 pandemic.

‘Adcock Ingram delivered these results under challenging trading and operating conditions due to the continued impact and uncertainty of the COVID-19 pandemic. Despite these complexities, the Group’s people displayed adaptability and resilience, with agile supply chain, sales, marketing and innovation strategies to sustain and grow its diversified portfolio of products.’ said Andy Hall, chief executive officer.

Demand for immune-boosting products

Turnover increased by 6% to R7.8 billion, as all divisions, with the exception of the Over-the-Counter (OTC) business unit, which is the largest cough, colds and flu company in South Africa, posted good growth in sales. The Consumer division, which now includes a full year’s contribution from the Plush shoe and household care business, increased its turnover by 42% to R1.3 billion. The Group experienced good demand for immune-boosting products, and certain small-volume parenterals and acute renal dialysis products associated with the treatment of COVID-19. The general absence of colds and flu, saw sales in the OTC business unit declining by 15%.

The gross margin decreased from 37% to 34%, driven by a 9% depreciation of the Rand against the US Dollar and Euro, directly affecting the cost of imported goods, and a higher proportion of anti-retroviral products (ARV’s) in the sales mix. Reduced demand in OTC products also resulted in lower factory recoveries at the Clayville factory.

Cost-saving initiatives

Pro-active cost-saving initiatives implemented at the start of the COVID-19 pandemic resulted in the Group achieving a like-for-like reduction of 6% in operating expenses.

Headline earnings decreased by 5% to R671 million, which following the Group’s share repurchases during the year, translated into a decrease of 3% in headline earnings per share.

The Board has declared a final dividend of 90 cents per share for the year ended 30 June 2021.

“We are confident that the broad foundation of our business remains relevant in this uncertain economic environment. We will continue to strive for value-adding portfolio enhancements in each of our business units through acquisitions, partnerships and product innovation” Hall concluded.

View Adcock Ingram’s full financial results here.