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Adcock Ingram Announces First Half Results

Adcock Ingram today announced the results for the six-month period ended 31 March 2014.

Turnover increased by 3% to R2.4 billion. Gross profit for the six-month period decreased by 14% to R846 million, as margins remained under pressure, impacted substantially by the weak Rand and compounded by inflation of certain key overheads as well as an unusually prolonged adverse product sales mix.

The prescription business showed a turnover increase of 14% to R975 million, resulting from the introduction of new products and success in the tenders. A significant negative impact came from the Over the Counter business which saw turnover reduced by 19% to R734 million, driven by a decline in the independent wholesale channel, strong competition and consumers buying down.

“It is clear that these results are not what we would have wanted”, said Kevin Wakeford, newly appointed CEO of Adcock Ingram. “It is because of this that we have, in the past few weeks, spent much time developing plans to reorganise the business.”

“The Group was also the target of a protracted contest for shareholder control, which not unexpectedly, created management distraction. It was inevitable that there would be economic consequences for the business.

“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, allow for better measurement of returns and instil an entrepreneurial, agile and flexible spirit in the business. This is the highest priority for us and the new structure should be fully in place by 01 July 2014,” concluded Wakeford.

Adcock Ingram also announced recently that the Company’s financial year end has been changed from September to June.
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About Adcock Ingram:
Adcock Ingram is a leading South African pharmaceutical manufacturer, marketer and distributor. The Company provides an extensive portfolio of branded and generic medicines, has a leading presence in Over the Counter brands and is South Africa’s largest supplier of hospital and critical care products.

For further details contact:

Zolani Kunene
External Communications Manager
Zolani.kunene@adcock.com
011 635 0139
082 5619443

Vicki St Quintin
Group Corporate Affairs and Investor Relations Manager
Vicki.stquintin@adcock.com
011 6350171
082 4534367