Aspen Pharmacare delivered a solid performance for the six months to December, having finally bedded down the last in a series of acquisitions that have seen it shift its emphasis from generics manufacturing to niche branded products.
Revenue rose 11% to R21.9bn and normalised headline earnings per share increased 26% to R8.72 for the period.
Aspen’s performance was driven by organic growth, particularly from its South African pharmaceutical business and its thrombosis brands. Profitability was boosted by a reversal of currency losses and by this being the first period in which its deal with AstraZeneca was fully reflected.
Aspen bought the rights to AtraZeneca’s global anaesthetics portfolio with effect from September 1 2016, but only acquired the residual intellectual property rights and manufacturing know-how with effect from October 2017.
“The last four years have been very busy, as we made a shift out of a generics business into what is now a predominantly speciality business,” said Aspen CEO Stephen Saad.
“We did not generate any shares, generated all of our own cash and have not only doubled revenue, but more than doubled profits and earnings per share,” he told Business Day.
Aspen’s anaesthetics portfolio delivered almost a quarter of group revenue, at R4.4bn, a 59% increase compared with the corresponding period the previous year.
However, performance in this part of the business was hampered by supply constraints, which Saad said was due to a factory fire. The factory was due to resume full production only in April.
Aspen’s thrombosis portfolio also reported strong revenue, up 17% to R3.3bn, compared to the previous year.
“It was a good result, moving in the right direction, because … Aspen’s organic growth has been pretty flat,” said Investec portfolio manager Andrew Joannou. “Operationally, the bright spot was the thrombosis brands, which did very well, particularly in Europe.”
Vestact portfolio manager Byron Lotter said the numbers were “solid”, and this was “the start of some decent growth in earnings, which will be good for the share price going forward”.