Mixed first half results for Adcock
Adcock Ingram on Tuesday announced its results for the six-month period ended March 31, with a decrease of 14% in gross profit to R846-million.
There was a turnover increase of three percent to R2.4-billion, it said in a statement.
The mixed results were attributed to margins remaining under pressure, impacted substantially by the weak rand and compounded by inflation of certain key overheads and a prolonged adverse product sales mix.
Chief executive officer Kevin Wakeford said the prescription business showed a turnover increase of 14% to R975-million, resulting from the introduction of new products and success in tenders.
A significant negative impact came from the over the counter business, which saw turnover reduced by 19% percent to R734-million, driven by a decline in the independent wholesale channel, strong competition, and consumers buying down, he said.
"It is clear that these results are not what we would have wanted. It is because of this that we have, in the past few weeks, spent much time developing plans to reorganise the business."
Wakeford said the group was also the target of a protracted contest for shareholder control, which not unexpectedly created management distraction.
"We are about to implement a new structure which is intended to give the company renewed focus and energy by enabling each business division to take full responsibility and accountability for its operational strategy..."
He said the new structure should be fully in place by July 1, 2014.
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