Aspen released interim results for the six months ended 31 December 2016 yesterday. The group reported a 13% increase in revenue to R19.8bn, missing estimates of an increase to R20.44bn. Overall, headline earnings per share came in at 640.9 cents, representing a 53% increase on the 418.8 cents recorded a year ago. However, normalised headline earnings per share only managed to increase by 6% to 692 cents, slightly lower than expectations of 700 cents, but higher than the 655.3 cents recorded previously. On the plus side, the acquisition of AstraZeneca’s global anesthetics portfolio, effective from 1 September 2016, generated R2,8 billion of revenue during the period. We’re also seeing an improvement in working capital management which should sooth market nerves. There is however some pressure in the infant milk business in Australia. The second half is expected to be significantly better. The board did not declare a dividend for the period. If you’d like more detail on Aspen’s results feel free to mail the desk on email@example.com.
Aspen announced yesterday it had reached an agreement with AstraZeneca to acquire its anaesthetics portfolio. The agreement will see Aspen’s wholly-owned subsidiary, Aspen Global Incorporated (AGI), acquire the exclusive rights to commercialise AstraZeneca’s global (excluding the USA), anaesthetics portfolio. The portfolio consists of seven established medicines, with the products sold in more than 100 countries worldwide. During the year ended 31 December 2016, these products generated revenue of $592mn. In terms of the agreement, AGI will pay $520mn and double-digit percentage royalties on sales of the portfolio, as well as sales related payments of up to $250mn in the 24 months following completion.
Yesterday, Sibanye Gold rose 5.41% to a near 2-month high after announcing that the group would be purchasing Anglo American Platinum’s Rustenburg operations for R4.5bn. This will be done by means of an R1.5bn payment in cash and shares upfront, with the remaining balance to be paid out over 6 years through 35% of the distributable free cash flow from the above operations. For Sibanye CEO, Neil Froneman, the deal will see Sibanye almost double its size, whilst also providing a sizable entry point into the platinum group metals market.
Continue reading Aspen: Sector Still Ripe for Acquisition
The Aspen recovery is definitely still intact, and while the stock is looking more bullish, it is entering a critical resistance phase.
GlaxoSmithKline (“GSK”) has announced the completion of the disposal of half of its 12.4% shareholding in Aspen (equivalent to 28.2 million ordinary shares). These shares were sold by means of an accelerated book build offering process which resulted in the shares being sold at ZAR 372 per share, raising gross proceeds of approximately ZAR 10.5 billion. Continue reading GSK halves its Aspen stake
Johannesburg – JSE Limited listed Aspen Pharmacare Holdings Limited (APN), the fifth largest generic company in the world, has announced stellar results for the six months ended 31 December 2014, which have primarily been driven by its offshore businesses.
- Gross revenue increased by 47% to R19.0 billion.
- Operating profit rose by 50% to R4.3 billion.
- Net profit after tax and earnings per share each advanced 27% to R2.5 billion and 539 cents respectively.
- Normalised headline earnings, being headline earnings adjusted for specific non-trading items, increased by 22% to R2.6 billion.
- Normalised headline earnings per share improved by 22% to 569 cents.
- Borrowings net of cash reduced by R1.2 billion while cash generated from operating activities accelerated 128%.
“We are pleased with the Group’s excellent performance. These results were underpinned by the expansion of our International business, which now contributes 46% to the Group’s gross revenue. The Nutritionals products have also made an increased contribution to the Group.”
“The global pharmaceutical industry is experiencing a prevalence of restructuring and consolidation, which creates acquisitive opportunities. Aspen is well placed to participate in these and its proven capability to successfully execute complex multi-territory transactions makes Aspen a strong candidate for such opportunities.”
– Stephen Saad, Aspen Group Chief Executive
Revenue in the International business was 158% higher at R8.8 billion and performance was boosted by the inclusion of the significant transactions completed during the previous financial year.
Revenue from the Europe CIS business climbed 229% to R5.1 billion from finished dose form pharmaceuticals and active pharmaceutical ingredient sales.
Revenue in Latin America advanced 118% to R2.6 billion, largely driven by the recent infant milk formula acquisition, while sales to customers in the Rest of the World were up 36% to R0.9 billion.
Capital expenditure projects are continuing at Aspen Oss in the Netherlands and at the French-based Aspen Notre Dame de Bondeville site.
ASIA PACIFIC BUSINESS
Revenue in the Asia Pacific region was 3% higher at R4.4 billion where the Nutritionals products led the way with strong double-digit growth. Sales to customers in Asia continued on an impressive growth trajectory, doubling to R0.6 billion.
SOUTH AFRICAN BUSINESS
As the ongoing leading pharmaceutical manufacturer in the country, revenue in the South African business grew by 12% to R4.3 billion. Private sector pharmaceutical sales increased 10% through a combination of organic growth and new product launches. Sales in the public sector were flat. The consumer division raised revenue by 30%, led by the Nutritionals products with Infacare achieving an increase in its share of this category.
The capital expenditure projects at the Port Elizabeth finished dose form manufacturing site and the Cape Town API manufacturing site are progressing well.
In Sub-Saharan Africa, revenue improved by 5% to R1.5 billion. Margin improvement initiatives yielded positive results and lifted EBITA 12% to R210 million.