Adcock flags profit bump as demand for OTC drugs improves
The group expects profits to rise by at least a fifth in its half-year to end-December, and SA’s cold and flu season had been largely absent in 2020
Adcock Ingram, which counts Panado painkillers and the cold and flu product Corenza C among its brands, expects half-year profits to rise by at least a fifth amid improving demand and an absence of retrenchment costs.
Headline earnings per share is expected to rise by at least 20% in the six months to end-December, from the 186.5c reported previously, the group said in an update.
Headline earnings is the primary profit measure in SA that excludes one-off items, and Adcock had generated R311.9m of it in the prior period, which was down 16.3% year on year.
Turnover in its over-the-counter segment had been under pressure as Covid-19 prompted changes in consumer behaviour, with the traditional cold and flu season not materialising as people stayed at home and donned masks. The group also incurred R33m in retrenchment costs towards the end of 2020.
The group said on Tuesday it has experienced improved demand in the current period for its over-the-counter and consumer healthcare products, and would release a more detailed trading update when it had a better idea of its expected profits.
In morning trade on Tuesday, Adcock’s shares were trading 2.51% higher at R47.40, having risen 3.04% so far in 2021, but having fallen almost 12% since the start of 2020.
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