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Monday, 18 March 2019

AfroCentric quietly builds medicine chest 1 t's not an obvious association, but AfroCentric, the listed BEE health care investment. Company that owns Medscheme, has quietly become the biggest dispenser of medicines by script volumes in the country. Through a deal with the department of health in 2018, the company's pharmacy courier unit, Pharmacy Direct, now dispenses more than 1 million scripts a month in KwaZulu Natal to public collection points.

At the same time, it has leapt feet first into drug manufacturing with the deal to buy the 74% it did not own in Activo Health, an SA based generics pharmaceutical pany that makes ARVs and over the counter products under the Plusssz range. While manufacturing generics is not an obviously high profit business, Afro centric CFO Hannes Boonzaaier argues that in the health "value chain", manufacturers are "still making good money". But its increasing reach in all aspects of the health care business has yet to truly materialise in its earnings.

For the six months ended December, fully diluted headline earnings per share were only 2.4% better, at 22.18c. It was slightly more generous with the dividend, raising that 6.25% to 17c a share. Admittedly, the results don't include Activo, for which Afro centric paid R588m, as the deal was only signed off on March 1. While its empire building in the health care sector may pay off, for investors this share is likely to require patience.

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