South African Druggists Sustains Earnings Growth

South African Druggists has increased earnings by 28% and is staying on course for its two-year development plan, despite strong headwinds in the second half of 1996. Results for the 12 months to August show turnover rising 21.7% to breach the 2 billion rand ($637.5 million) level for the first time. Earnings before exceptional items increased 28.2% to 150 million rand, and earnings per share rose 12.5% to 215.3 cents.

Chief executive Peter Beningfield said that while EPS growth had not met the group's 15% target set for the two development years of 1996 and 1997, it was regarded as satisfactory considering the difficulties faced by the drug industry, including a poor winter season and the state of flux in SA's health care system.

"Delays in the implementation of new government policies had a far-reaching effect on our business," he said, "among other things by slowing down the anticipated shift to generics." Against this background, according to Mr Beningfield, the group's South African pharmaceutical business did well to increase its market share in dosage terms. Off-shore operations, notably the UK generics distributor Lagap and Pharmatec - the recently-acquired technology company in Italy - both achieved solid results, and helped to boost operating income for SAD from pharmaceuticals by 36%, he said.