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Non-trading expenses
of R52.4 million
recorded in the current year include share-
based payments of R39.9 million of which
R20.8 million relates to a once-off charge
resulting from the modification of the B-BBEE
scheme in July 2015. It also includes listing
and other incorporating fees related to the
new BEE vehicle (AdBEE) (R3.4 million) as well
as advisory costs for exploratory M&A activity
(R0.5 million). Transaction costs related to the
disposal of Cosme (India) and Ayrton (Ghana)
are included in the amount reflected under
discontinued operations.
Operating profit
ended on R553.2 million,
10.9% or R54.2 million up.
The
net finance costs
for the year are
R71.8 million compared to R83.6 million
recorded last year.
Income from investments,
being
dividend income from the Tiger Brands Black
Managers Trust is R9.2 million, compared to
the R10.7 million in the previous year.
Equity accounted earnings
for the year
from National Renal Care (JV with Netcare)
and the plant in India are R59.3 million (2015:
R65.6 million), weighted approximately 56%
towards the Indian operation.
Profit before tax
for the year is
R549.9 million, 11.8% ahead of the previous
year.
The high effective tax rate
is a
consequence of certain expenditure being
non-deductible for tax purposes and a
number of audits of prior years being finalised
with SARS.
The profit after tax
for the year for
continuing operations is R379 million,
compared to a profit of R350 million in 2015,
an improvement of 8.4%.
The reported
loss after tax from
the discontinued operations
of
R200 million includes:
• impairments of R135 million on India’s
intangibles and R73 million on Ghana’s
assets now held-for-sale, as well as
• transaction costs of R20.1 million for India
and R2.5 million for Ghana.
The prior year loss of R151.1 million includes
impairments of India’s intangibles of
R74.4 million and Ghana’s plant and equipment
of R7.4 million.
Minorities
in Novartis Ophthalmics,
Menarini and Ayrton account for just over
R10 million. The higher value compared with
the prior year is due to significantly better
performances in those businesses.
GROSS PROFIT
(R’000)
2015
2016
1 874 205
2 029 521
TURNOVER
(R’000)
2015
2016
5 158 901
5 545 610
Turnover of R5.546 billion is 7.5% (R387 million) higher than the
comparative year. The Single Exit Price (SEP) increase of 7.5% granted in
April 2015, with an additional benefit from themore recent SEP increase
of 4.8% granted in February 2016 has supported this improvement.
These have been offset to some extent by the discontinued Consumer
products and repatriatedmultinational lines in Prescription. All divisions
recorded improved sales compared to the prior year.
7
,5%
Gross profit of R2.030 billion at 36.6% of sales is R155 million higher than
the preceding year which was at 36.3% of sales. The gross margin was
maintained despite the depreciation of the Rand, as a result of lower
inventory impairments, particularly in Prescription and Consumer.
8
,3%
Overall, we are very satisfied with this set of results, in particular
• The increase of 17% in trading profit with growth in every division;
• A 20,1% increase in normalised headline earnings per share; and
• Cash generation of R941 million, reducing the debt equity ratio to just 10%.
FINANCIAL REVIEW
OUR PERFORMANCE
(continued)
28 |
Integrated Report 2016