Our opinion on the current state of AFRO-C(ACT)Afrocentric (ACT) is a black-owned investment holding company that focuses on health administration and insurance.
Sanlam recently acquired 28,7% of the company, which will help with its financing and marketing. The group owns:
- 100% of Pharmacy Direct (a courier company).
- 100% of Curasana (a pharmaceutical wholesaler).
- 100% of Activo Health, having recently acquired the remaining 74% for R588m in cash and shares, at a multiple of 9,3 times Activo's most recent after-tax profit (R63m).
Its largest asset is its controlling stake in Medscheme, which administers medical schemes covering 3,2m lives in South Africa, Namibia, Kenya, Botswana, Zimbabwe, and Swaziland. Afrocentric is intent on leveraging the Medscheme client base to sell its other products.
On 11th October 2022, Sanlam made an offer to buy between 36,9% and 43,9% of Afrocentric for R6 per share, causing the share price to rise sharply.
In its results for the six months to 31st December 2024, the company reported revenue down 51,8% and headline earnings per share (HEPS) down 90,6%. The company said, *"The directors have no reason to believe that the Group will not be a going concern in the foreseeable future based on review of forecasts and budgets and available cash resources."*
Technically, the share bounced off support at around 280c, but the recent results disappointed, and it has fallen further to 143c. We advise waiting for it to break up through its downward trendline before investigating further.
