Adcock of South Africa to Post Nine-Month Loss Amid TurnaroundKamlesh Bhuckory
Adcock Ingram Holdings Ltd., South Africa’s largest supplier of hospital products, said it will record a nine-month loss as new management attempts to turn around the company after a failed takeover bid.
The drugmaker will post a basic and headline loss per share in the nine months through June, the Johannesburg-based company said in a statement today. Changes are being made to the structure of the business and the financial impact is still being assessed, it said. Adcock was the subject of a 10-month battle for control after profit margins came under pressure from rising production costs and a weaker rand in 2012.
The changes are “unlikely to yield significant improvement in the short term,” Adcock said. “The board however remains optimistic about the company’s long-term prospects.”
Adcock shares declined 0.4 percent to 52.10 rand as of the market close in Johannesburg, about 31 percent below the high end of a 74.50 rand to 75.78 rand takeover offer by CFR Pharmaceuticals SA of Chile, which collapsed earlier this year. The stock has declined 27 percent in 2014, making it the fifth-worst performer on the FTSE/JSE Africa All Share Index.
CFR, Chile’s biggest drug maker, called off a 12.8-billion rand ($1.19 billion) cash and stock offer to buy Adcock after Johannesburg-based Bidvest Group Ltd. built a blocking stake. Bidvest Chief Executive Officer Brian Joffe became Adcock’s new chairman with Kevin Wakeford becoming CEO.