In the media

AfroCentric's Pharma Cluster boosts Group revenue as integration strategy yields positive results

28 September 2021

Group declares 17c final gross dividend for investors

Highlights

• Healthcare operating profit up 15.5%
• Profit after tax up 5.8%
• Headline earnings up 7.2%
• Normalised headline earnings excluding discontinued operations up 9.9%
• EBITDA: R1.1 billion
• Final gross dividend of 17 cents per ordinary share (gross) declared

Johannesburg, 14 September 2021 — The AfroCentric Group (JSE:ACT) today posted a solid set of results for the financial year ended 30 June 2021, amid a tough economic environment that has been aggravated by COVID-19.

The results confirm the success of the Group's diversification strategy, with the integration of the Pharma Cluster having contributed positively to Group operations.

AfroCentric Group's encouraging financial performance has seen its Board declare, in addition to the interim gross dividend per ordinary share of 17 cents, a final gross dividend of 17 cents per ordinary share (gross) for the year ended 30 June 2021.

Revenue for the year increased by 25.8% from the year before, which was mainly due to the 35.2% increase in revenue generated by the Pharma Cluster. The medicine management contracts won by Scriptpharm during the previous year, together with the increasing volume of activity in Pharmacy Direct, and Activo Health's growth boosted by Vitamins and chronic medication sales, were notable contributory factors generating growth in comparative segmental revenue.

AfroCentric's Services Cluster increased its revenue by 16.8%, despite headwinds from members downgrading their medical aid options and the loss of the Sasolmed contract.

AfroCentric Group CEO Ahmed Banderker said, "We are encouraged to note that while it had been forecast that the financial strain brought on by the COVID-19 pandemic would see members exiting medical aid schemes, this has not come to fruition."

"Instead, we have seen members do their utmost to hold on to their medical aids to ensure they have adequate healthcare in the event they or their family members contract COVID-19," he said.

Banderker noted that during the year under review, the Group concluded two acquisitions, which included the remaining 20% of shares in Scriptpharm Risk Management, as well as acquiring 100% of the DENIS Group, a company specialising in dental benefits management.

"This transaction has enabled us to focus on innovation and efficiency management in dental treatment offerings to all South African medical schemes and their members," said Banderker.

Initiatives to improve operational efficiencies resulted in the Service Cluster operating profit increasing by 15.3% and the Pharma Cluster operating profit increasing by 20.8%.

However, the Group's exit from Eswatini and Zimbabwe resulted in a loss from discontinued operations of R14 million. Group profit before tax, increased by 12.3% to R699.5 million from R622.7 million. Group profit after tax increased by 5.8% to R493.8 million, up from R466.8 million in 2020.