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Monday, 16 September 2019

Johannesburg, 16 September 2019 – Johannesburg Stock Exchange (JSE) listed healthcare entity, AfroCentric Group, recorded a 25.7% increase in total revenue for the financial year which ended June 2019. Profit after tax was flat for the period and reflects the increase in gearing and amortization in the group. The results were driven by a strong performance of the Group’s healthcare retail businesses, which saw a 90.6% increase in operating profit. The Group also declared a final dividend of 17 cents per ordinary share for this period

The earnings results depict a picture of transition as the group is transforming its healthcare offerings and composition of earnings. During the period under review and prior to the publishing of these results, the following projects have been concluded:

Acquisition of a further 74% interest in Activo Health, which now has become 100% held, effective 1 March 2019.
Acquisition of the iThrive Business Solutions Group, main subsidiary PHA, effective 1 October 2018 (a smaller administration company)
Scriptpharm has secured the Polmed Chronic Medicine Management contract effective 1 January 2019.
Medscheme has secured the Medshield Hospital Benefit Management contract effective October 2018.
Medscheme Forensic Services secured the Medshield Fraud Prevention and Recovery contract, effective 1 January 2019.
Medscheme has secured the Hosmed Hospital Benefit Management contract effective 1 July 2019.
Acquisition of an additional 25% stake in AFA Botswana. This effectively increased Medscheme’s shareholding to 49%.
Acquisition of Sanlam Health, which represents an administrator with specialized skills in combined corporate health offerings and an administration system.

AfroCentric Group Chief Executive, Ahmed Banderker, is confident about the future outlook for the Group: “AfroCentric is now the most diversified healthcare company in Southern Africa. We have adapted our strategies to align our business model to government’s health policy direction and have successfully demonstrated our abilities therein. A number of our subsidiaries are engaging closely with Government in delivering innovative and sustainable services, including the provision of chronic medication to Government patients across four provinces.”

“We continue to utilise our diverse set of skills and expertise to proactively pursue opportunities for collaboration with government in a calm, cogent, phased implementation of a health system that achieves universal coverage,” says Banderker.

Banderker cautiously affirmed AfroCentric’s support of National Health Insurance and its aims of providing healthcare for all. “We are encouraged by the government’s resolute approach to introducing the changes as well as their willingness to engage all the players to ensure a smooth transition,” he adds. “The current engagements with Government, the healthcare industry and the public at large will hopefully clarify and provide details around implementation as well as funding,” explains Banderker.

“AfroCentric holds the view that private healthcare will continue to play a significant role for a number of years to come, as the country builds up to the implementation date of 2026 and thereafter” he continues. AfroCentric believes that a collaborative approach will help the country to achieve a health system that achieves universal coverage. “This is important at a time where government continues to seek investments to build the economy of the country,” adds Banderker.

AfroCentric Group, which owns health companies such as Medscheme, medicines distributor, Pharmacy Direct, drug manufacturer Activo and several other health related companies, thereby offering a comprehensive and diverse range of health offerings – believes its expertise may be utilised to help build the future of South Africa’s healthcare sector.

“There are significant lessons and experience that government may gain from creating a more inclusive process that strategically taps into the skills and expertise within the industry leaders including AfroCentric. This expertise may include the creation of an NHI legal framework that allows for a duplicative environment which enables the NHI Fund to offer wider innovative product offerings that medical schemes and health insurers would provide to meet the needs of the population,” says Banderker.

Commenting on the details of the results, Banderker believes that the Group is going in the right direction: “Our health retail subsidiary Pharmacy Direct continues to support the Department Of Health Centralised Chronic Medicine Dispensing and Distribution process in KwaZulu Natal (KZN), where it dispenses in excess of 800,000 scripts per month. This is an example of a private public partnership which will be key to NHI, this programme has substantially alleviated the congestion at public hospitals and clinics”.

The administration business, which is linked to the performance of schemes, the Group observed an affordability challenge with members buying down to lower options. AfroCentric continued to invest in the growth of their retail business with the additional purchase of the remaining shares in Activo. The newly acquired entities are beginning to gain traction with Scriptpharm, MMed and Pharmacy Direct contributing to profitability in this financial year.

“Whilst a stronger economy would result in an even stronger performance by the Group, especially with more people being employed and therefore being able to afford medical aid and other health products – our approach will keep us sustainable in the long term irrespective of the uncertainties about private healthcare in the country,” concludes Banderker.

About AfroCentric Group

AfroCentric Group is the most diversified healthcare in Southern Africa, with over 4 million lives covered in the region. The Group is the most transformed entity listed in the healthcare sector of the Johannesburg Stock Exchange, with a focus on health administration, health risk management, wellness and disease management as well as health-centric information and communications technology-based solutions. Entities under AfroCentric include Helios IT Solutions, Scriptpharm Risk Management, Mmed Distribution, Wellness Odyssey, Essential Group, Pharmacy Direct, Allegra, DBC South Africa, Aid for AIDS and its largest entity, Medscheme Holdings.

Medscheme is the largest health risk management services provider and is among the leading medical scheme administrators in South Africa with over 3, 7 million lives under management. Its clients include the country’s major open medical schemes: Bonitas, Hosmed and Fedhealth, as well as several closed schemes.

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