Litha needs a shot of growth

Litha needs a shot of growth

LITHA Health Care’s much vaunted joint venture with government to start-up a vaccine production plant in Pinelands is still waiting for the green light to start operations. Initial expectations were for the plant, owned The Biologicals and Vaccines Institute of Southern Africa Proprietary Limited (Biovac) – to kick start production in 2013. 

Original deadlines have drifted by, which is a pity because currently SA imports most of its vaccines for distribution around the country. There is also a huge opportunity for vaccines manufactured in the Pinelands plant to be exported to southern African countries…and perhaps further afield.

Litha’s latest quarterly report – covering the three months to end December 2103 – does not offer an update on progress at the Pinelands plant. But an investment presentation by CEO Selwyn Kahonowitz noted that the construction of the viewing label and patching facilities had now been completed.

He expected the Medical Controls Council (MCC) to complete their inspection of the plant during the year – but a rough timeframe for this process was not offered. One suspects the sooner that Litha can hurry along the process the better. In the last quarter Litha’s Biotech division – which mainly distributes imported vaccines - chipped in almost 22% group operating profit.

But revenue increased by only 3,4% to R24,5m compared to same quarter in 2012, while operating profit increased by a slender 2,1% to R4,8m over the same period.

Kahanowitz said the increase in the Biotech division’s revenue was driven by increased revenue in Litha Logistics, although there were slower sales in Litha Vaccines associated with backorders on certain products. 

Biovac itself endured a weak operating quarter, making a loss of R1,6 million for the quarter compared to a profit of R400,000 in same quarter in 2012.

However, there is a short-term fillip for Litha’s Biotech division as it waits approval on the vaccine plant as the Department of Health has announced the Human Papilloma Virus (HPV) national campaign with Biovac. Kahanowitz said this campaign was set to be rolled out in the second half of 2014.

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