COMPANY NEWS IN BRIEF
Shoprite doubles down on groceries with R3bn sale of House & Home, OK Furniture to PepkorSA's largest retailer, Shoprite, will sell its furniture business to Pepkor, saying on Tuesday the division's future growth and profitability would have required it directing substantial resources away from its growing core food operation.
Reporting its full-year results to end-June on Tuesday, the JSE-listed retailer said it had signed the agreement to dispose of its OK Furniture and House & Home brands, excluding the Angola and Mozambique operations, to Pepkor. Pepkor, the owner of PEP, Ackermans and Refinery, said in a statement the acquisition was about 4% of its market value, or about R3.2 billion, with this bringing more than 400 stores to a group that already has almost 6 000.
"With respect to our furniture business, we found ourselves at a crossroads with the business' future growth and profitability hamstrung by the requirement of a level of investment that would have resulted in us re-directing capital and project management resources away from that currently dedicated to our food retail operations," said Shoprite CEO Pieter Engelbrecht in a statement.
"We believe the best outcome for OK Furniture and House & Home is for the business to operate in an environment where its required infrastructure and credit management expertise exists, thus allowing us to focus our resources on what we do best."
Shoprite's furniture business delivered sales growth of 2.3% to about R7.2 billion to end-June, lagging a group that saw 12% growth overall to about R240 billion. Shoprite also announced that it is in advanced discussions to purchase the remaining 50% shareholding in its last-mile logistics provider Pingo De
-FIN24-
African drugmaker Aspen misses target after hit from China
Aspen Pharmacare fell short of its targeted mid-single digit growth in core profit and reported flat full-year headline earnings on Tuesday, hit by higher acquisition-related transaction costs and China volume-based procurement impacts.
For the year to June 30, Africa's biggest drugmaker recorded normalised headline earnings per share of 14.92 rand, little changed from the 14.98 rand a year earlier.
At its half-year results, Aspen had guided mid-single digit growth in normalised earnings before interest, tax, depreciation and amortisation (EBITDA) for its 2024 financial year.
While it achieved a record second-half normalised EBITDA of 6.1 billion rand, up 17% compared to the first half, EBITDA for the full period rose only 1% to 11.3 billion rand ($628.77 million).
It said it fell short of its target because of the higher than anticipated negative impact of the Chinese government's volume-based procurement (VBP), under which the country buys drugs and medical devices in bulk at a sharp discount.
Group revenue rose by 10% to 44.7 billion rand, as its manufacturing business grew by 25%, while its commercial pharmaceuticals division grew by 4% after absorbing the impact of VBP in China.
The company declared a gross dividend of 359 cents per share, up 5%.
-REUTERS-
SA's Biovac gets ready for mpox vaccines as African outbreak spreads
African vaccine manufacturers are readying themselves to make mpox shots as a lethal outbreak of the disease spreads across the continent.
The Biovac Institute, a South African vaccine maker, is able to produce the shots and is waiting for "more intimate discussions" with companies such as Bavarian Nordic A/S, one of a few companies with an approved mpox dose, Biovac Chief Executive Officer Morena Makhoana said in an interview on Bloomberg Television.
Africa Centres for Disease Control and Prevention is working to ensure that it avoids mistakes that cost lives during the Covid-19 pandemic, starting with the slow acquisition of vaccines. While the continent has dealt with mpox since the 1970s — making it the only region where the disease is endemic — it didn’t receive vaccines for the virus in 2022 as the infectious illness spread around the world.
Bavarian Nordic’s vaccine needs cold storage, which Biovac can provide, Makhoana said.
"When we did the Pfizer Covid-19 tech transfer about three years ago, that capability was installed then," he said. "From what we can understand at a higher level, we are able to manufacture the vaccine" at the institute’s facilities in Cape Town.
African nations have failed to build up stockpiles of shots even after they agreed to a plan to improve the continent’s emergency-response capabilities. Part of that failure is linked to a lack of local vaccine production. The region imports almost all of its shots and a drive to set up an industry has stumbled. For vaccine makers, the bigger issue is whether there will be continuous demand. Manufacturers won’t make large quantities of vaccine unless they have a guaranteed market.
-BLOOMBERG-