JSE-listed Adcock Ingram on Wednesday reported a 5% year-on-year increase in headline earnings a share to 98.6c for the six months ended December 31, while headline earnings from continuing operations increased to R164.8-million.

Group turnover from continuing operations of R2.75-billion was 7.1% higher than the comparative six-month period, aided by a 7.5% single exit price increase on some product segments in April 2015.

Adcock noted that all product segments had achieved a higher turnover in the period under review.

“While all divisions showed positive sales growth, three of the four divisions also improved profitability. The judicious and increased promotional investment in our leading brands is showing pleasing results,” said CEO Andy Hall.

Volume improvement had also been encouraging, but the benefits thereof were offset by the discontinuation of certain uneconomic product lines in the consumer division and the repatriation of some multinational products from the prescription division. 

Adcock further highlighted that the company had started seeing the benefits of a reorganised management structure during the six months, with trading profits up 20% year-on-year to R292-million.

“The divisional reorganisation of Adcock Ingram’s business, commenced early in the 2015 financial year, has, in a sense, been a contributing feature in maintaining the positive trend of performance during the interim period under review.

“In a period of economic uncertainty and intensifying currency devaluation, the group’s improved factory efficiencies, better customer relations, pleasing service level statistics and a concentrated marketing effort, yielded impressive market share gains, measured by IMS and Nielsen, particularly in the over-the-counter and consumer divisions,” the company stated.

Operating expenses increased 8% year-on-year, largely as a result of the phasing of marketing spend.

A dividend of 50c a share out of income reserves was declared for the six-month period.

“Looking ahead, attention will be placed on investing in our brands, building our customer relationships and improving our service levels within the operating divisions. The group is focused on searching for appropriate acquisitions to bolster its nonregulated portfolio, building mutually beneficial partnerships and innovating within its current product portfolio,” said Hall.