SA's Adcock Ingram Sees First-Half EPS Jump 14%

Against a backdrop of lower inflation and pressure on medicine prices, South African pharmaceutical group Adcock Ingram increased headline earnings growth by 14% to 47.2 cents ($0.11) per share in the six months to March 31, 1996.

Group sales of 591.4 million rand ($139.1 million) reflected a 5% rise in growth. This was principally due to lower sales in the wholesale division, following the introduction of a revised discount structure to protect margins, and a slowdown in consumer spending. Excluding the wholesale division, sales from the manufacturing divisions achieved 9% growth. Profit before interest and tax also rose by 9%, to reach 92.3 million rand, thanks to improved operating margins despite increased expenditure on R&D in order to maintain a strong flow of new products.

The pharmaceutical division turned in an impressive performance, with sales up 20% at 95 million rand, improving market share and outperforming market growth of 15.7%. The Adco range of generics recorded good growth. New generic products currently under development, together with government intentions to expand the use of generics, paint a positive picture for the future, according to the company's chief executive, Don Bodley.