Robust Performance Reported ForSA Druggists

South Africa's SA Druggists produced another robust performance in the six months ended February, with healthy market share gains by all its major operations, keeping it on target for its forecast of a 20% earnings increase. Announcing this, chief executive Peter Beningfield also said the company was positioned to participate fully in a new health care dispensation, and was therefore confident of sustaining earnings per share growth in the region of 20% in the short- and medium-term.

The interim results show turnover rising by 21.5% to 1.3 billion rand ($362.4 million) and attributable earnings by 22.2% to 44 million rand ($12.3 million). EPS grew by 20% to 0.72 rand, reflecting a slight increase in the number of shares in issue.

The pharmaceutical and chemical trading divisions did particularly well, exceeding earnings growth targets. The distribution division increased volumes significantly, but its margins remained slender. This, coupled with start-up and development costs in the group's new health care and international divisions, reduced the group's operating margin slightly from 6% to 5.7%. Net interest paid rose from 2 million rand to 6 million rand, but gearing remained very low at 5.4%.