Directors' report
The directors have pleasure in submitting their report to shareholders, together with the audited annual financial statements for the year ended 30 June 2018..
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
Adcock Ingram is a leading South African healthcare group, operating in three geographical areas, namely southern Africa, Rest of Africa and India. The southern African business consists of four principal divisions:
The southern African business consists of four principal divisions:
- a Consumer division selling a range of products mainly through FMCG retailers;
- an Over the counter (OTC) division selling a range of OTC products that can be purchased without a prescription mainly through pharmacies;
- a Prescription division selling a range of branded and generic prescription products including specialised instrument and surgical products; and
- a Hospital products and services division.
BUSINESS COMBINATIONS
ACQUISITIONS
In January 2018, the Group acquired Genop Holdings Proprietary Limited, a highly specialised instrument, surgical and pharmaceutical products company focused on the ophthalmic, optometry, skincare, aesthetic and plastic surgery segments in Southern Africa (note 1.1).
During the 2017 financial year, the Group acquired Virtual Logistics Proprietary Limited, a national and cross-border fine distribution company purchased in April 2017 (note 1.2).
SHARE CAPITAL
Details of the authorised and issued share capital are set out in note 18 to the annual financial statements and in the statement of changes in equity. Details of ordinary treasury shares held by Group entities are as follows:
| 30 June 2018 | 30 June 2017 | |||
| Adcock Ingram Limited | 4 285 163 | 4 285 163 | ||
|---|---|---|---|---|
| Mpho ea Bophelo Trust* | 5 168 592 | 5 168 592 | ||
| Adcock Ingram Holdings Limited Employee Share Trust (2008) | 6 740 | – |
* Held indirectly
DIVIDENDS TO SHAREHOLDERS
POLICY
The Board intends to declare a distribution on at least an annual basis, which it currently envisages will be covered between two to three times by headline earnings.
INTERIM AND FINAL
2018
An interim dividend of 86 cents per share was declared and paid in relation to the six-month period ended 31 December 2017. A final dividend of 86 cents per share was declared following the results of the year ended 30 June 2018.
2017
An interim dividend of 63 cents per share was declared and paid in relation to the six-month period ended 31 December 2016. A final dividend of 76 cents per share was declared and paid following the results of the year ended 30 June 2017.
SHAREHOLDERS
Please refer to the shareholder analysis of the Integrated Report.
EVENTS AFTER 30 JUNE 2018
There were no significant events after year-end.
SUBSIDIARIES AND JOINT VENTURES
Information concerning the names and holdings of subsidiaries and joint ventures of Adcock Ingram Holdings Limited is set out in Annexure H to the annual financial statements.
Details regarding the financial performance of joint ventures are given in Annexure F.
DIRECTORS
The names of the directors who presently hold office are set out in the Integrated Report. Changes to the composition and directors’ responsibilities are also detailed here.
No director (or his/her associates) holds 1% or more of the ordinary shares of the Company. A director beneficially held, directly and indirectly 8 462 (2017: 19 200) ordinary shares in the Company during the year. There has been no change in the holdings since the end of the financial year and up to the date of approval of the integrated report. Details of the directors’ shareholdings are reflected below.
| Number of shares 2018 |
Number of shares 2017 |
|||
| A Hall | 8 462 | – | ||
|---|---|---|---|---|
| B Joffe | note 1 | 19 200 | ||
| A Mokgokong (note 2) | 3 445 642 | 3 445 642 |
Note 1: B Joffe retired as a director on 21 August 2017.
Note 2: Dr Mokgokong holds a 50% share in CIH Projects Proprietary Limited which in turn holds a 26.67% share in Ad-izinyosi (the BEE shareholder of the Group), within the revised BEE scheme described in Annexure B, section C.
RETIREMENT FUNDS
Details in respect of the retirement funds of the Group are set out in Annexure C.
DIRECTORS’ AND KEY MANAGEMENT REMUNERATION
Full details regarding non-executive and executive directors' and key management remuneration are set out in the Integrated Report, as part of the remuneration report.