Company news in brief
Adcock Ingram takes hitsPharmaceuticals manufacturer Adcock Ingram has reported pressure on its interim revenue and profit as well as a fall in volumes as cash-strapped South Africans cut their discretionary spending on both over-the-counter (OTC) and consumer products.
The group, whose brands include pain killers such as Panado, Gen-Payne and Myprodol, and flu medications such as Corenza-C, also found itself grappling with significant delays at Durban port in the first half of its 2024 year, which affected some key product lines.
Adcock reported that turnover increased 1% to R4.7 billion in its six months to end-December, while profit fell 5% to about R444 million, despite price increases.
Breaking the results down further, the company reported that its consumer turnover came in at R866 million, 2.3% ahead of the comparative period, with an average price increase of 4.8%.
However, organic volumes declined by 10% because of the challenging economic environment, while it also battled with issues of supply constraints for Bioplus sachets.
OTC turnover of about R1.15 billion was roughly in line with the prior year, with an average price increase of 6.6%, compensating for volume declines of 6.3%. – Fin24
Spar not looking to tap shareholders
Retailer Spar said on Wednesday it is not looking to tap shareholders as it battles falling volumes in some markets and a hefty debt pile. The group said it is considering various debt structuring options and has the support of its financiers.
Analysts said the market appeared to take heart from this, as well as news in the JSE-listed retailer's latest trading update that it is getting to grips with problems in its new IT system.
It also reiterated its plans to exit its problematic Poland operations, and despite pressure in its core grocery market, its shares were up over 1% on Wednesday afternoon. They have still fallen by a quarter in the past year.
In a trading update for the 20 weeks to 16 February, Spar said a weaker rand helped flatter its offshore operations, but in Southern Africa it saw combined core grocery and liquor turnover growth of about 6% against internally measured price inflation of 7.5%.
Valued at around R21 billion on the JSE, Spar operates in southwest England, Ireland and Switzerland, but Southern Africa makes up almost two-thirds of revenue. – Fin24
Nestle, Danone see price hikes
Two of the world's top consumer goods companies, Danone and Nestle, said yesterday they will slow price increases in 2024 after two years of hikes that have prompted shoppers to seek cheaper alternatives for basic goods like yoghurt and coffee.
But Danone which owns brands including Evian and Badoit water and Activia yoghurt, warned prices would still rise, citing a need to offset labour costs and shipping prices.
Their comments follow British rival Unilever, the maker of Ben & Jerry's ice cream and Dove soap, which also said this month that price increases would start to ease.
The packaged goods industry has hit shoppers with higher prices for more than two years, citing rises in input costs that started with the Covid-19 pandemic and were exacerbated by Russia's invasion of Ukraine.
"We hadn't seen that sort of inflation spiking since 1973, 1974," Nestle CEO Mark Schneider told a call with journalists yesterday. The Swiss firm, maker of Maggi stock cubes, KitKat chocolate wafers and Nescafe coffee, is the world's biggest packaged food company.
Investors and analysts have raised concerns that companies are pushing price rises too far and recommended they focus more on marketing and innovation, as cost of living worries help retailers' cheaper private label brands steal market share. – Reuters