Adcock (AIP) – Bidding for Growth

Adcock (AIP) reported FY19 HEPS growth of +10.6% y-y (to 421.6cps), with topline growth achieved across most divisions apart from the OTC division. We believe the global movement, SA included, towards reducing the amount of codeine-containing products consumers are legally allowed to ingest without a prescription is a key risk to AIP’s OTC division. We are positive on AIP now being a subsidiary of Bidvest (BVT) as we believe this could underpin AIP’s rest of Africa growth prospects, but we caution that growth could be hampered by codeine restrictions in key African countries.