The Board is pleased to present the Group’s interim results for the six months ended 31 December 2015. The period under review was characterised by the implementation of a number of activities within the Group operations, permitting the finalisation of certain meaningful and determining corporate actions. These included inter alia, the accommodation, alignment and integration of the sizeable WAD Holdings (Pty) Ltd (“WAD”) asset acquisitions, in particular, Pharmacy Direct, the closing and pivotal admission of SANLAM Limited (“SANLAM”) into the Group, the costly, but feasible acquisition and roll out of the IFM Fraud Detection Platform and not least, the immense task and expenditure incurred in preparation for the South African Police Service Medical Scheme (“POLMED”) administration contract, which went live and became income generative with effect from 1 January 2016. While each of these investment and operational events are expected to be complementary and impact positively on the Group’s principal business, the increased costs of investment incurred for improved system and IT capacity, including the cost of additional staff, accommodation and amortisation in the subject period, makes it difficult to measure performance against that reported in the prior comparable period.


The summarised consolidated financial statements for the six months ended 31 December 2015 are prepared in accordance with the requirements of International Financial Reporting Standards (“IFRS”), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the JSE Limited Listings Requirements, and the South African Companies Act 71 of 2008. The summarised consolidated financial statements are prepared on the historical cost basis and the accounting policies are consistent with those adopted and applied for the year ended 30 June 2015 in terms of IFRS.


AfroCentric is a black-controlled investment holding company, its investment portfolio primarily focused on services to the healthcare sector. AfroCentric appears on the healthcare list of companies on the exchange operated by the JSE Limited, under the code ACT. The more significant Group assets include WAD assets, the businesses of which, specialise in pharmaceutical wholesaling and pharmaceutical courier distribution services. The Group, inter alia, has a material controlling interest in Medscheme through its interest in ACT Healthcare Assets (Pty) Ltd (“AHA”). Medscheme is a multi-medical scheme administrator and health risk solution provider. The Group also has a meaningful presence in various African countries, as well as Mauritius.


Reference has already been made about the WAD and SANLAM corporate actions, including the appointment of Medscheme as the administrator of POLMED. These enterprises, associates and new clients are expected to add significant value to our South African businesses, providing inter alia, user friendly medical scheme features and solutions by delivering a more integrated offering, an example of which, is the commencing SANLAM “Reality” loyalty programme to members of Bonitas and Fedhealth. The POLMED medical scheme is Medscheme’s third largest client with approximately 175 000 members.


Profits before taxation increased by 12.5% for the period under review amounting to R150.7 million (2014: R133.9 million). Apart from the early unmatched cost to income deficiency in preparation for the contractual services to POLMED, a significant increase in amortisation was provided for the first time against the intangible asset value arising on the WAD assets acquisition and the IFM Fraud Detection Platform. Given the number of shares issued to WAD vendors for this acquisition, diluted headline earnings per share for the period under review declined by 20.92%. While forecasts of WAD stand-alone earnings are likely to be marginally accretive, it is expected that the intended synergetic co-operation within the Group, will more meaningfully contribute to Group earnings going forward.


Below are some of the other notable achievements for the AfroCentric Group:

•  Swazimed administered by Medscheme in Swaziland has, for the second consecutive year, won the PMR Diamond Arrow Award in the Best Medical Aid in the country     category.
•  The Group has made great strides in the technology space such as the Electronic Health Patient Record which will be implemented during 2016.
•  The Group received the sum of R703 million, being the proceeds of the sale to SANLAM of an effective 27% in AfroCentric Health Limited (“AHL”).
•  The implementation of the IFM Fraud Detection Platform to our medical aid schemes to enhance the detection of fraudulent claims.
•  The achievement of a level two BEE accreditation based on the new BBBEE codes.
•  The Group is completely debt free with significant cash resources to finance future growth, potential mergers and acquisitions.
•  An initiative has commenced to acquire all the shares in AHL, not already owned by AHA, from the minority shareholders in AHL. A circular has been prepared and     every indication exists that the process will be successfully completed by the financial year-end.


Given all of the events and corporate actions that have occurred during the period under review, the Group has positively positioned itself for future growth and further development. It has taken some years to reach this point of Group sustainability and absent some unforeseen circumstances, it is expected that the Group will continue to make progress in all of its enterprises. The relationship with SANLAM holds some exciting prospects for expansion, not only in South Africa but in destinations on the continent of Africa, where SANLAM already has a presence. Notwithstanding the above, stakeholders will be acutely aware of the economic challenges which lie ahead. Recent increases in interest rates, consequential inflation and the volatile Rand exchange rates have all had an effect on the South African economy and will likely impact disposable income and business confidence. Our talented management team will nevertheless continue to diligently manage the Group’s expanded and growing operating portfolio, at the same time seeking to optimise the returns and opportunities that present themselves for review and consideration.


Since the last published set of Group results there were five new appointments on the Board of Directors:

•  Mr Antoine Van Buuren – Group Chief Executive Officer (effective 16 March 2016).
•  Ms Lindani Dhlamini – Independent Non-executive Director
•  Dr Nkateko Munisi – Non-executive Director (representing Golden Pond).
•  Mr Ian Kirk – Non-executive Director (representing SANLAM).
•  Mr Ahmed Banderker – Non-executive Director (representing SANLAM).

During the period, Mr Dewald Dempers stepped down as Group CEO and the position was temporarily filled by the Non-Executive Chairman, Dr Anna Mokgokong.  
Mr Dempers will however continue to act as an Executive Director on the Board.


Given the strong cash position and performance of the Group, the Board of directors has pleasure in announcing that the Company’s interim dividend of 12 cents per ordinary share (gross) has been declared for the six months ended 31 December 2015. Dividends are subject to Dividends Withholding Tax. The payment date for the dividend is Monday, 16 May 2016. This interim dividend will constitute part of the Group’s annual dividend, to be considered with the results for the 30 June 2016 year-end.

•  Dividends have been declared out of profits available for distribution.
•  Local Dividends Withholding Tax rate is 15%.
•  Gross dividend amount is 12 cents per ordinary share.
•  Net cash dividend amount is therefore 10.2 cents per ordinary share.
•  Company has 554 377 328 ordinary shares in issue as at the declaration date.
•  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 Friday, 6 May 2016
Shares commence trading ex-dividend Monday, 9 May 2016
Dividend record date Friday, 13 May 2016
Dividend payment date Monday, 16 May 2016

Share certificates for ordinary shares may not be dematerialised or rematerialised between Monday, 9 May 2016 and Friday, 13 May 2016, both days inclusive.


The unaudited interim results have been prepared under the supervision of Mr JW Boonzaaier CA(SA), in his capacity as the Group Chief Financial Officer.

On behalf of the Board

Dr ATM Mokgokong

16 March 2016