AfroCentric gets boost from trading businesses
Operating profit increases, with the group boosted by its acquisition of pharmaceutical group Activo Health during the period
Administration and health management services company AfroCentric reported a double digit profit rise in its six months to end-December on Friday, boosted by the diversification of its trading operations.
Profit before tax rose 12.1% to R268.7m, with the group’s results lifted by its acquisition of an additional 74% stake in Activo Health during the period.
Activo Health provides a broad scope of pharmacy products across SA, Botswana, Namibia and Swaziland and has a national sales and marketing footprint in these regions.
AfroCentric’s brands include medical aid company Medscheme and Pharmacy Direct, a courier pharmacy that delivers prescribed chronic medication to patients.
Pharmacy Direct also experienced good volumes, the group said.
The group's services cluster, mainly supported by the medical scheme administration business, also performed well during the period under review, the group said.
Open scheme membership grew by 18,000, with growth offset by the loss of the Old Mutual Staff Medical Aid fund. Membership growth of 22,000 in the Government Employee Medical Scheme (Gems) supported a consistent operating profit performance, the company said.
“AfroCentric has once again delivered a very satisfactory operating result, particularly during a period of challenging political and economic uncertainty, not least a period characterised by a lack of economic growth and declining consumer disposable incomes,” the statement read.
AfroCentric said on Friday it continued to assess new acquisitions, and was in the process of acquiring 100% of Dental Information Systems (Denis) group, which specialises in dental health management.
The group had announced the acquisition of Denis from EOH in December for R170m, although it is still subject to approval by competition authorities.
“The transaction enables the group to focus specifically on cost reduction and innovation in the dental treatment offerings to all SA medical schemes and their members,” the group said.
In afternoon trade on Friday AfroCentric’s share price was up 1.72% to R2.95, giving it a market capitalisation of R1.6bn.
Update: March 13 2020
This article has been updated with additional information and share price information.