AfroCentric is a black-owned JSE listed investment holding company which operates in and provides specialised services to the public and private healthcare sectors. AfroCentric has and continues to maintain its deliberate objective of being the leading exemplar of transformation and empowerment in the South African healthcare sector.

AfroCentric’s principal subsidiary is Medscheme, which provides cost-effective and professional healthcare administration and managed care services to the growing memberships of its renowned institutional, corporate and government Medical Scheme clients, with lives presently under management, approximately 3 700 000. The Group is also heavily invested in other essential segments of the public and private healthcare markets in South Africa, with rapidly expanding activity and application in its pharmaceutical wholesale supply, its chronic medication distribution network, specialised disease management, information technology (IT) solutions, transactional switching, fraud detection and not least, the development and marketing of tailored health and insurance solutions and products, in partnership with SANLAM.

The Board is therefore pleased to present a summary of the solid AfroCentric Audited Results for the year ended 30 June 2018, a period characterised by improved new business generation, certain complementary acquisitions and operative developments, which inter alia, included the ongoing consolidation, rationalisation and cost saving measures within all Group enterprises. We are also able to report, that all Group divisions and enterprises made a positive contribution to Group operations and earnings. The prior and continuing investment in system development and increased IT capacity, has already contributed favourably towards the current year results, anticipating repeated cost savings, through greater scale and procedural efficiencies into the 2019 financial year and beyond.


The summary consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings Requirements for summary financial statements, and the requirements of the Companies Act applicable to summary financial statements.

The Listings Requirements require summary financial statements to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of the consolidated financial statements from which the summarised consolidated financial statements were derived are in terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements.


AfroCentric proudly advise that during the year under review:

  • AfroCentric Health (Pty) Ltd, a core operating subsidiary within the Group, achieved a level 2 B-BBEE status for the sixth consecutive year.
  • Medscheme was awarded the “Titanium Award for Service Excellence”, at the 2018 BHF Titanium Awards ceremony.
  • AfroCentric was awarded the “Diversity in the Workplace Award” at the 15th Annual National Business Awards ceremony.


Profit before tax increased by 46.9% for the period under review amounting to R538.4 million (2017: R366.7 million). Profit after tax (PAT) increased by 74.9%, a satisfying and positive result delivered through great effort and efficient management control. Earnings per share (EPS) increased in this period by 118.0% and headline earnings per share (HEPS), increased by 110.7%. For a better appreciation of the above earnings statistics, Shareholder attention is drawn to the two IFRS provisions in the June 2017 Income Statement, one provision relating to the Sanlam share subscription profit warranty and the second provision pertaining to the suspensive Tranche 2 payment for the WAD acquisition. Both of these corporate matters were successfully concluded during the reporting period, making past IFRS provisions in each case no longer relevant or applicable. Absent the aforesaid provisions, EPS and HEPS now reveals a realistic measurement of the performance of the AfroCentric Group.


Given the years of debate surrounding National Health Insurance (NHI), including factors presently being considered by the Health Market Inquiry into the Private Healthcare Sector, AfroCentric have for some time been giving consideration to the creation of a platform model to establish a value chain of healthcare diagnosis, treatments, pharma and medical services, to optimise the purchasing power of the healthcare Rand.

The research dictated a concept through models of integration, consolidation, mergers, partnerships and incentives, generally to improve the means and matter of patient care, the most viable and cost effective treatments, not least the most rational outcomes within the broader healthcare delivery system. Having regard to the above, certain consolidations, cost reviews and component initiatives are already in place, several plans for parallel advantage are in the pipeline and broader discussions on these and other similar initiatives are in progress for presentation to and application in both the public and private healthcare sectors.

We report on certain of these component initiatives that are under review, in progress or have been concluded during the year and since year end:

  • Assisted and facilitated the successful consolidation of approximately 5 600 Community Medical Scheme members (COMMED) into Bonitas Medical Scheme.
  • Secured the Hosmed Administration contract for Medscheme of approximately 24 000 members, a contract for providing Administration services for a significant number of members of the South African Local Government Association (SALGA).
  • Acquired 80% of the shares in Scriptpharm Risk Management, a business which manages chronic script claims, this effective from 1 August 2017
  • The acquisition of 51% of the shares in Essential Group, which provides healthcare insurance, effective 1 March 2018.
  • Recently awarded a license to establish a health administration and insurance business in Swaziland, Medscheme Health Insurance (Swaziland)
  • The identification and recovery of fraudulent or improper claims through our Fraud Management Software has been a great developmental success, with direct savings and recoveries to our clients in excess of R500 million.
  • Pharmacy Direct, our medication logistics business, was awarded several contracts by the Department of Health for chronic pharma distribution to its vast provincial networks, substantially to alleviate congestion at public hospitals and clinics. Given the renewal of certain of these contracts and certain additional contracts awarded, AfroCentric invested R100 million in the acquisition and refurbishment of a larger warehouse to manage the increased script volumes for dispensing and delivery to state and private patients with chronic conditions.
  • Sanlam and AfroCentric management diligently progressed towards the finalisation of the commencing portfolio of healthcare, life and lifestyle solution products to be jointly introduced into the broader market.


Notwithstanding the South African operating environment being burdened with several economic and political challenges, the Board is satisfied with AfroCentric’s sound operating results for the year ended 30 June 2018. Good progress was made by all of the Group’s business units, in particular the growing divisional interests in supplementary medical specialities, including the group’s rapidly expanding pharmaceutical operations. The broad, but adverse commercial impact on consumer disposable incomes, compounded by the increases in medical costs, has not unexpectedly focused the attention of all healthcare stakeholders, that alternative models for more affordable healthcare delivery has become an imperative. The Group has recognised this state of affairs and references under Developments above, capture certain of the initiatives and strategic plans already introduced and being explored by the Group to address the “value chain” concept referred to therein. AfroCentric remains well positioned and well capitalised to continue on its progressive plans for expansion, rationalisation and synergistic acquisitions, to provide value for money services and long term compounding shareholder value.


Shareholders will be aware that AfroCentric acquired a 26% interest in Activo Health (“Activo”) as a component of the WAD Assets acquisitions in 2015. Shareholders are advised that agreement has been reached in principle with the Activo vendors to anticipate the exercise of the call option negotiated at the time, for the remainder of the shares in Activo (74%) not already owned by AfroCentric. The terms of the call option are substantially dictated by the valuation formulae and payment options provided for in the WAD Master Agreement. The acquisition is a related party transaction and is therefore subject inter alia, to the approval of AfroCentric shareholders in general meeting and an appropriate Circular with full details will be sent to shareholders, subject to all other contractual matters being concluded.

Shareholders are therefore advised that should the terms of the exercise of the call option be successfully concluded, it may have an effect on AfroCentric’s share price. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s securities until a further announcement in this regard is made.


There were no changes to the Board during the period under review. We do however wish to advise shareholders that our Founding directors, members and mentors, Meyer Kahn (79) and Motty Sacks (75), having concluded that their objectives on behalf of AfroCentric have been achieved, have decided to retire from the Board. Their retirement has resulted in them not being available as Directors and will be effective immediately after AfroCentric’s Annual General Meeting, scheduled to take place during November 2018. The Board would like to thank them both for their invaluable contribution to the Group. Their experience, guidance and wisdom will be certainly missed at Board and Committee meetings and generally within the Group. We wish them well in their retirement.


The Board has pleasure in announcing that in addition to the interim gross dividend per ordinary share of 16 cents, a final gross dividend of 16 cents per ordinary share has been declared for the year ended 30 June 2018. Dividends are subject to Dividends Withholding Tax. The payment date for the dividend is 12 November 2018.

  • Dividends have been declared out of profits available for distribution.
  • Local Dividends Withholding Tax rate is 20%.
  • The gross dividend amount is 16 cents per ordinary share.
  • The net cash dividend amount is therefore 12.8 cents per ordinary share.
  • The Company has 554 377 328 ordinary shares in issue as at the declaration date.
  • The Company’s income tax reference number is 9600/148/71/3.

The salient dates relating to the dividend are as follows:

Last day to trade cum dividend Tuesday, 6 November 2018
Shares commence trading ex-dividend Wednesday, 7 November 2018
Dividend record date Friday, 9 November 2018
Dividend payment date Monday, 12 November 2018

Share certificates for ordinary shares may not be dematerialised or rematerialised between Wednesday, 7 November 2018 and Friday, 9 November 2018, both days inclusive.


The financial information contained in this report is extracted from audited information, but is itself not audited. This announcement does not include the information required pursuant to paragraph 16A(j) of IAS 34. The full provisional report is available on our website (, at our offices and upon request. The Directors take full responsibility for the preparation of this report and the financial information has been correctly extracted from the underlying annual financial statements. The annual financial statements were audited by PricewaterhouseCoopers Inc. who expressed an unmodified opinion thereon. The audited annual financial statements and the auditor’s report thereon are available for inspection at the Company’s registered office.

On behalf of the Board

Dr ATM Mokgokong

Mr AV Van Buuren
Group Chief Executive Officer

14 September 2018