Divisional reviewsTrading and distributionBranded Products

All businesses’ trading profit levels were higher than last year, with most market segments demonstrating slower recoveries. Gross margins benefitted from a better exchange rate. There is price resistance being experienced in some areas, but the advantage of multiple price points and brands is enabling a level of mitigation. Expense control was excellent.

Adcock Ingram’s revenue and trading was exceptional, delivering a record performance. Profits were driven by improved demand for over-the-counter and consumer healthcare products, together with an increase in elective surgeries, doctors’ consultations, and dispensary visits. There has been good organic volume growth and the product mix has proven beneficial. Key brands posted healthy growth while multiple new product launches and an expanded portfolio, together with good expense control, also contributed to the performance. Hospital had a challenging year.

All Data, Print and Packaging operations reported higher profit compared to last year as significant plans were successfully implemented. Revenue increase was driven by ongoing growth in the on-line food retail market, a shift to paper products, a recovery in retail delicatessen counter sales and increased demand for the efficiencies delivered by mobile computing and barcoding solutions. Print to post grew off a low base last year.

The Office products cluster was a stand-out performer. The back-to-school market normalised and commercial demand ticked up at Waltons with more people back in offices. Cecil Nurse benefitted from good stock holding of products in demand and new innovations. Konica Minolta retained a key contract and delivered a very good performance following specific initiatives put in place.

Mixed demand patterns were reported in the Consumer Products cluster, but good and respected brand (and price point) representation, innovation and recovery in the tourism industry, all supported revenue and profit growth.

Looking forward

Adcock Ingram’s portfolio is well balanced, resilient and its brands remain well supported.

The various businesses are continuing product innovation strategies at multiple price points to support revenue growth. The supply chain is currently normalising albeit with longer lead times.

Continued close management of margins and costs will be key to mitigate rand deterioration and other inflationary impacts.