Health group AfroCentric's has reported muted growth for its half-year to end-December, weighed down by issues including marginal membership growth, a slowdown in pharmaceutical sales, and a reduction in sales of preventative medicine.
AfroCentric, which provides healthcare products and services to the public and private sectors, reported a 16.9% fall in profit to R194.2 million to end December, with revenue edging up 1.2%, but the company opting to hold on to its dividend.
The company said there had been a general slowdown of the pharmaceutical products, lower adherence by patients to chronic medicine, as well as uncertain consumer spending patterns regarding preventative medicine.
But the company said in its view its core business remained sound, with good diversification in the private and public medical scheme membership.
The company said on Monday it was pleased with the performance of the Sanlam gap cover business it acquired in 2022. Group profitability has, however, was hit by the business acquisition costs incurred in the Sanlam transaction and the costs associated with prolonged load shedding.
The focus for the remainder of 2023 will be to optimise its investment in IT, which will then enable the operations to become more efficient, AfroCentric said.
A further focus will be on yielding synergies and integrating various businesses and products.
According to the group, Sanlam's transaction to acquire the controlling stake in AfroCentric, announced in October last year, is progressing well.
Keith McLachlan, investment officer at Integral Asset Management said AfroCentric's revenue felt "light," but also reflects the growing economic pressure being felt across the economy.
In afternoon trade on Monday AfroCentric's shares were down 0.54% to R5.52 per share, but have risen almost 44% over the past six months. Click here for details on AfroCentric's shares as well as other info.