HEALTH INDUSTRY
Ascendis to hold fire on buying spree
The acquisitive healthcare group’s stock closes 15.5% up after it reports revenue from continuing operations up 27% to R4bn
Ascendis Health will shelve its acquisition strategy for a year as the group wants to reduce debt and prioritise organic growth, said founding CEO Karsten Wellner, who stepped down from the role on Thursday. Investors have been concerned about Ascendis’s tepid organic growth and cash generation rates and its high debt after an offshore acquisition spree. The company’s stock has roughly halved since May 2017, although the change in focus, a strong interim performance and the appointment of a “credible” replacement CEO had helped the shares to rebound on Thursday, analysts said. The share closed 15.5% up at R13.69 as Ascendis said revenue from continuing operations rose 27% to R4bn in the six months to December and normalised headline earnings grew 20% to R353m. Wellner said the company had made a concerted effort to ensure its results were transparent, partly to show that organic growth was now looking healthy and partly to allay concerns that its acquisition model resembled that of ...
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