PLATFORM OF SERVICES
AfroCentric targets acquisition of health companies
Investment group AfroCentric is eyeing more acquisitions of health companies to enhance its offerings.
During the year to June, Afrocentric concluded some small acquisitions, such as Wellness Odyssey, a company that provides health awareness to medical schemes and the corporate market, and Scriptpharm Risk Management, which manages chronic script claims.
These acquisitions are expected to contribute R250m in the 2018 financial year.
"AfroCentric will be considering other such specialised health-related enterprises to expand its platform of services into the broader markets," the company said. The group also sees an opportunity for a collaboration with Sanlam, which recently acquired a 28.7% shareholding in the company.
"Now the big challenge and opportunity for us is how do we integrate ourselves to make sure we deliver the best-quality service for our clients," Group CEO Antoine van Buuren said.
AfroCentric reported a 49.9% increase in operating profits to R564.1m
The company said the increase in medical aid numbers had boosted its performance. It declared a final dividend of 14c, up 16.67%.
Van Buuren attributed the performance to organic growth from its main asset, Medscheme.
"We’ve increased the number of lives that we administer and as that number grows, so does our revenue," he said. The group grew its medical aid clients following the incorporation of Liberty and Polmed (South African Police Medical Scheme) into the company over the past two years.
Casparus Treurnicht, portfolio manager at Gryphon Asset Managers, said he believed the business was predominantly trying to turn the industry upside down and take business away from its competitors.
He cited Gems (Government Employees Medical Scheme), Polmed and Bonitas as examples. "If we look at the broader picture, then we can easily draw the conclusion that public and private sector employment is not growing. So, on a macro level, you will not be growing your pool of members — the only way to grow is to be disruptive."
AfroCentric’s share price fell 1.54%, to close at R6.40.