AFT Pharmaceuticals — Global growth despite tough macro environment

AFT Pharmaceuticals (ASX: AFT)

Last close As at 04/03/2024

NZD3.24

−0.02 (−0.61%)

Market capitalisation

NZD341m

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Research: Healthcare

AFT Pharmaceuticals — Global growth despite tough macro environment

AFT Pharmaceuticals reported solid H124 top-line growth, driven by strong momentum in the Asian and international markets. H124 revenues of NZ$83.6m grew 27.2% from H123, bolstered by 171.4% and 47.8% y o y growth in international and Asian markets. Although margins came in softer than expected (operating margin of 3.9% vs 5.3% in H123) with increased upfront launch, marketing and R&D spending, particularly in the domestic ANZ markets, management expects margins to recover in H2 as the business scales in these newly launched markets. Given the H1 run rate and seasonality (H2-weighted business model), we raise our top-line estimates for FY24 and FY25 but temper near-term operating profit expectations, in line with management’s FY24 operating profit guidance of NZ$22–24m. Longer term, we anticipate a lift from the recent FDA approval of Maxigesic IV. As a result of these adjustments, our valuation resets to NZ$723m or NZ$6.90/share, up from NZ$644m or NZ$6.14/share previously.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

AFT-Pharmaceuticals_resized

Healthcare

AFT Pharmaceuticals

Global growth despite tough macro environment

H124 update

Pharma and biotech

27 November 2023

Price

NZ$3.36

Market cap

NZ$352m

NZ$0.6/US$

Net debt (NZ$m) at 30 September 2023

30.6

Shares in issue

104.9m

Free float

25.9%

Code

AFT

Primary exchange

NZX

Secondary exchange

ASX

Share price performance

%

1m

3m

12m

Abs

(0.3)

(6.7)

(6.7)

Rel (local)

(2.5)

(2.9)

(2.6)

52-week high/low

NZ$3.90

NZ$3.26

Business description

AFT Pharmaceuticals is a specialty pharmaceutical company that operates primarily in Australasia but has product distribution agreements across the globe. The company’s product portfolio includes prescription and over-the-counter drugs to treat a range of conditions and a proprietary nebuliser.

Next events

US Maxigesic IV launch

End-FY24/early FY25

FY24 results

May 2024

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Jyoti Prakash, CFA

+44 (0)20 3077 5700

Jitisha Malhotra

+44 (0)20 3077 5700

AFT Pharmaceuticals is a research client of Edison Investment Research Limited

AFT Pharmaceuticals reported solid H124 top-line growth, driven by strong momentum in the Asian and international markets. H124 revenues of NZ$83.6m grew 27.2% from H123, bolstered by 171.4% and 47.8% yoy growth in international and Asian markets. Although margins came in softer than expected (operating margin of 3.9% vs 5.3% in H123) with increased upfront launch, marketing and R&D spending, particularly in the domestic ANZ markets, management expects margins to recover in H2 as the business scales in these newly launched markets. Given the H1 run rate and seasonality (H2-weighted business model), we raise our top-line estimates for FY24 and FY25 but temper near-term operating profit expectations, in line with management’s FY24 operating profit guidance of NZ$22–24m. Longer term, we anticipate a lift from the recent FDA approval of Maxigesic IV. As a result of these adjustments, our valuation resets to NZ$723m or NZ$6.90/share, up from NZ$644m or NZ$6.14/share previously.

Year
end

Revenue (NZ$m)

PBT*
(NZ$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

03/22

130.3

18.9

19.2

0.0

17.5

N/A

03/23

156.6

16.7

11.0

1.10

30.5

0.3

03/24e

189.8

21.1

14.7

1.47

22.9

0.4

03/25e

234.1

38.3

26.5

2.65

12.7

0.8

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

International markets take the lead in H124

AFT’s H124 top-line beat was driven by a 117% y-o-y jump in Asian/international sales (NZ$18.2m combined), supported by strong Maxigesic IV sales in South Korea, an increased Chinese over-the-counter (OTC) presence and a growing international footprint. Maxigesic is now available in 66 countries, up from 61 at the end of FY23. While the domestic ANZ market delivered a steady 14% y-o-y gain driven by organic growth and new product launches, the contribution in these mature markets (relative to overall sales) declined to 78% from 87% in H123. Higher international flows also partially offset the lower operating profitability from ANZ (operating loss of NZ$1.5m vs NZ$3.2m profit in H123), although we note that the 24.1% operating margin from international markets was aided by the c NZ$2m milestone payment received from a licensee in Italy, a direct flow-through benefit.

US launches of Maxigesic IV and Rapid next catalysts

We expect the upcoming launches of Maxigesic IV and Rapid (commercialisation strategy being finalised) in the US to be the next material catalysts. We anticipate that Maxigesic IV will be launched in the US in late FY24, with an increased contribution from early-FY25. As a result, we have adjusted our international sales expectations upwards. As a side note, the launch will trigger a US$6m milestone payment from Hikma (US$3.9m to AFT; we model this in FY25), which is expected to support margin expansion in FY25.

Valuation: Rises to NZ$723m or NZ$6.9/share

We adjust our near-term estimates for H124 performance and raise our longer-term forecasts for anticipated US launches and growth in Asian markets. Our valuation adjusts to NZ$723m or NZ$6.90/share, from NZ$644m or NZ$6.14/share previously.

H124 growth led by Asian and international markets

AFT reported solid 27.2% y-o-y total revenue growth to NZ$83.6m in H124 (ending 30 September), driven by strong product sales across Asia and international markets (combined growth of 117%; 94% ex-licence income) and steady performance from the domestic markets (14% y-o-y growth). Globally, product sales and royalties increased by a material 24.3% y-o-y to NZ$81.7m. Licensing income was also up significantly to c NZ$2m (from c NZ$0.1m in H123) and primarily related to a sales milestone payment from AFT’s licensee in Italy. Domestic markets (Australia and New Zealand (ANZ)) continue to remain the company’s largest, although their share declined to 78.2% of total group revenue versus 88.2% in FY23.

Gross margins from product sales and royalties were down by 2pp to 41.6% due to a change in sales mix (lower post-pandemic demand for the high-margin cold and flu medication and vitamins and a higher contribution from the lower-margin hospital segment). However, the NZ$2m milestone payment meant that overall gross margins were down only slightly to 43.0% from 43.6% in H123. Reported operating profit declined by 6.0% y-o-y to NZ$3.3m, representing a margin of 3.9%, lower than 5.3% in H123. This was primarily due to increased investment in new products, R&D and marketing of new products in the ANZ market, which together offset the benefit from the higher revenue. R&D expenses increased significantly (up 26.0% y-o-y to NZ$3.5m, NZ$7m if we include capitalised R&D) as the company continued to invest in expanding its R&D pipeline (such as developing a topical treatment for strawberry birthmarks). Selling and distribution expenses were also up significantly (+37.5% y-o-y to NZ$23.8m) due to aggressive launch and marketing-related activities in the first half. Management has highlighted that investment in product marketing was weighted to H1 and is likely to unwind in the next six-month period (H224).

Net profit for H124 was NZ$1.8m, higher than the prior year’s NZ$1.5m due to lower net financial expenses and tax payouts. Furthermore, period-end net debt stood at NZ$30.6m, similar to the March 2023 figure of NZ$29.9m, with investments in growth funded through internally generated cash flows.

Steady domestic market growth

Revenue from Australia, which accounted for 51.1% of H124 group revenue, grew 18.4% y-o-y to NZ$42.7m, led by a mix of organic and new product growth. The OTC channel, representing 68.4% of segmental revenue, grew the strongest at 24.0% y-o-y, driven by strong demand across all seven core therapeutic categories (eyecare, pain management, dermatology, gastrointestinal, vitamins, allergy and hospitals). This was despite a reduction in demand for its cold and flu medicines and supplements (such as liposomal vitamins) following fading concerns around the COVID-19 pandemic. The other two channels – hospital and prescription – recorded high single-digit growth of 9% y-o-y each in H124. Operating profit for the region fell to NZ$0.5m (versus NZ$3.1m in H123), with operating margin declining to 1.3% from 8.6% in H123. This was primarily due to increased marketing spend associated with new product launches, estimated to reduce in intensity in H2, as highlighted above.

In the home market of New Zealand, revenue growth was flatter (up 6.5% y-o-y to NZ$22.7m) and primarily organic, unlike Australia. The hospital channel, which accounts for 15.8% of the segment’s sales, grew the strongest by 15% to NZ$3.6m. Revenue from the OTC and prescription channels was up by 6.8% and 2.1%, respectively. Operating profit, excluding group head office costs, was down to NZ$2.6m from NZ$4.9m in H123. Similar to Australia, this reflects the increased marketing spend on product launches combined with a higher contribution from the lower-margin hospital business in the sales mix. Including head office-related expenses, the segment reported an operating loss of NZ$2m, in comparison to operating profit of NZ$0.1m in H123.

We highlight that AFT launched 22 new products in domestic markets in FY23, which expanded the total number of product offerings in these markets to more than 150. With the H124 release, the company has increased the number of new launches planned in Australasia through FY26 to 73 from 68 earlier. This includes 20 in FY24 (26 previously) and 53 in FY25–26. Management has attributed the decline in number of planned launches in FY24 to some delays in receiving regulatory approvals. We understand that the bulk of the planned launches for this year will take place in H2, with related promotional activities anticipated in H125.

Exhibit 1: H124 results by region

NZ$000

Revenue

Operating profit before tax

H123

H124

% change

H123

H124

% change

Australia

36,068

42,704

18%

3,101

549

-82%

New Zealand

21,295

22,677

7%

142

(2,013)

-1,518%

Asia

3,664

5,416

48%

532

1,621

205%

International

4,723

12,817

171%

(318)

3,094

1,073%

Source: AFT Pharmaceuticals

Overseas market growth gaining momentum

Unlike previous periods, the H124 uptick was driven by AFT’s overseas market growth, which benefited from the waning pandemic-related headwinds. Revenue from Asia (6.5% of H124 group revenue) rose 47.8% y-o-y to NZ$5.4m, with solid growth across all channels. The hospital channel, representing 73.5% of segmental revenue, grew 36.0% y-o-y driven by stronger than expected demand for Maxigesic IV in the Korean market, where it received regulatory approval in September 2021. The OTC channel (18.5% of segmental sales) also reported an impressive 88.2% growth supported by growing traction from the company’s e-commerce initiatives (primarily in China), although we note that this growth comes from a lower base. While AFT’s e-commerce presence in China has helped generate sales growth through the OTC channel, the recent approval of its Crystaderm antiseptic cream by the National Medical Products Administration should allow the company access to the offline retail and hospitals segments, which account for 75% of the OTC market in China, and is therefore a much larger opportunity. Operating profit in Asia improved substantially to NZ$1.6m in H124 from NZ$0.5m in H123, with the operating margin rising by 15.4pp to 29.9%.

The international segment was the best performing during this period, with revenues increasing by a solid 171.4% y-o-y in H124 to NZ$12.8m, helped by growing momentum in Maxigesic sales (now available in 66 countries vs 61 in FY23, in various formats) and NZ$2.0m in licensing income. Product sales and royalties rose materially by 132.0% y-o-y and licensing income was up significantly to c NZ$2m (from c NZ$0.1m in H123), mostly related to a milestone payment from its licensee in Italy. Management has highlighted Germany and Italy as the two countries where Maxigesic has seen the most traction. The strong top-line performance and benefit from the licensing income flowed down, with the segment reporting operating profit of NZ$3.1m (vs an operating loss of NZ$0.3m in H123). With several launches of Maxigesic planned in the coming months, including in the US (IV and Rapid), South Africa and Belgium (IV and tablets), we expect momentum to stay strong for this market. We also note that AFT formed a UK subsidiary in FY23 (AFT Pharmaceuticals UK, which is 70% owned by AFT with the remainder owned by its long-term collaboration partner, Edge Pharmaceuticals) and expects to generate first sales in FY24, including Combogesic IV (Maxigesic IV’s brand name in the UK) and another two hospital-based IV products. Our estimates do not currently reflect the UK opportunity, which therefore offers further upside to our valuation.

Management expects sales growth momentum to continue in H224 driven by the ongoing roll-out of Maxigesic (across several dose formats), gaining traction in Asia and international markets, and the launch of new products in Australasia. It continues to target rolling 12-month revenue of NZ$200m and FY24 operating profit in the range of NZ$22–24m (excluding licensing income expected to be received following the US launch of Maxigesic IV).

US launch of Maxigesic IV the next big catalyst

We maintain that the success of AFT’s overseas expansion plans rest on its ability to increase the geographic footprint of its flagship Maxigesic range of products (which we estimate accounts for upwards of 80% of the current international sales volume). Management has indicated that in the longer term the company aims to generate 35% of group revenues from international markets (from 8% in FY23). In this context, we see the upcoming launch of Maxigesic Rapid and, more particularly, Maxigesic IV, as key catalysts and potential inflection points for AFT. Note that these launches will mark the first entry for AFT into the US, the largest analgesics market globally, estimated at US$6.8bn and forecast to grow at a CAGR of 4.9% during 2023–28.

Maxigesic IV (to be marketed as Combogesic IV in the US) is essentially a double-strength formulation of the oral version (1,000mg paracetamol and 300mg ibuprofen) and has been licensed in more than 100 countries, approved in 46 and currently launched in 25 countries (including the key markets of Germany, France and Italy). Unlike the tablet version, the IV formulation specifically targets hospitals for the treatment of patients with post-operative pain, an area dominated by opioids. According to Persistence Market Research, opioids constitute more than 60% of the post-operative pain relief market, valued in excess of US$35bn. Although effective in managing pain, opioids tend to be highly addictive and, in light of the US opioid abuse epidemic, physicians have been challenged by a lack of effective alternatives in addressing patients’ post-operative pain. We believe that Maxigesic IV, as a non-steroidal anti-inflammatory drug, can provide a much-needed alternative. Recent uptake trends in European countries and South Korea provide early indications of the drug’s efficacy and bode well for a strong US uptake post launch. Maxigesic IV has been approved in the US for mild to moderate pain and for the management of moderate to severe pain as an adjunct to opioids. The approval was based on positive data from a Phase III study, which demonstrated that Maxigesic IV was well tolerated and offered faster onset of action and higher pain relief than paracetamol IV (the leading non-opioid analgesic) and ibuprofen IV alone.

AFT already has a commercial partner in place in the US (Hikma) and the product launch should trigger a milestone payment of US$6m (to be split 65:35 with partner Hyloris). Management expects the launch to take place in February or March 2024 and we estimate that the milestone payment will be received in early FY25. For Maxigesic Rapid, AFT continues to explore optimal distribution strategies for the US market.

R&D initiatives to drive longer-term growth

AFT continues to invest in its R&D pipeline (total R&D-related expenses were NZ$7m in H124, up from NZ$6.3m in H123) and we see these new additions as instrumental in driving further growth for the company. As of 31 March 2023, AFT had 21 products in its development portfolio across different therapeutic areas such as pain management, eyecare, dermatology and gastroenterology. The most recent additions to the R&D pipeline include a topical treatment for strawberry birthmarks (dermatology) and an eye drop to target drug-resistant infections (eyecare), both of which will hold significant global sales potential if successfully developed. The company is also considering investing in another two projects to expand its pipeline.

Late-stage assets in the company’s R&D pipeline include the Maxigesic range of products (IV USA, Dry Stick, Day/Night and Cold, Flu & Sinus Kit), the ‘SD’ project in dermatology and the ‘BT’ project in gastroenterology (with a potential market size of c US$200m each) and three ‘KW’ projects (potential market size of c US$700m). AFT is also working on completing additional development work on its NasoSURF nasal nebuliser project, which faced some manufacturing glitches during FY23. Furthermore, it plans to commence studies to demonstrate the safety and efficacy of Maxigesic in children (clinical studies expected to continue through 2026) which, in our opinion, will broaden the addressable market for Maxigesic products. Exhibit 2 presents a snapshot of AFT’s selected R&D projects.

Exhibit 2: AFT’s R&D pipeline

Source: AFT presentation, November 2023

Forecasts and financials

We have made adjustments to our explicit FY24 and FY25 estimates (both revenue and expenses) based on AFT’s H124 performance, growing international momentum and potential upside from the upcoming launches in the US market (Maxigesic IV and Rapid). The H124 top-line performance was ahead of our forecasts, and we therefore adjust our FY24 revenue estimate upwards (to NZ$189.8m from NZ$184.0m previously). Specifically, we marginally raise and downgrade, respectively, our estimates for sales in Australia (NZ$112.9m vs NZ$110.1m previously) and New Zealand (NZ$47.5m vs NZ$48.9m previously), to reflect the H124 performance. For Asia and international markets, we make more aggressive revisions (Asia: NZ$11.2m vs NZ$9.9m previously; and international: NZ$18.1m vs NZ$15.2m previously) to incorporate the better-than-expected performance. Overall, we now estimate 21.2% y-o-y growth in FY24. We also tweak our FY25 estimates for the aforementioned reasons and upcoming launch of Maxigesic IV in the US and now project sales of NZ$234.1m (NZ$214.0m previously).

The H124 gross margin was 43% and we therefore adjust our estimates for FY24 (down to 45.0% from 47.2% previously) and FY25 (48.0% vs 50.3%, previously) accordingly. We expect the FY25 margin to benefit from the full flow-through impact of the US$3.9m milestone payment (AFT’s share) expected from Hikma in early-FY25. Operating expenses in the first half of the financial year were materially higher than our estimates (due to higher-than-anticipated marketing expenses in the domestic markets) and we therefore raise our full-year opex estimates to reflect this. Our FY24 operating profit estimate now stands at NZ$22.7m (management guidance-NZ$22–24m) and includes US$2.9m in reimbursement of regulatory fees from the FDA expected in H224. For FY25, we estimate operating profit to be NZ$40.3m, from NZ$41.0m previously.

Balance sheet position

Excluding leases, AFT closed H124 with a net debt position of NZ$30.6m (NZ$29.9m at end-FY23), which comprised NZ$6.2m in gross cash and NZ$36.8m in debt. The gross debt includes NZ$33.2m in term loans and a NZ$3.8m bank overdraft. The company holds an outstanding term loan with the Bank of New Zealand (BNZ), which was renewed in September 2022 into a three-year term loan maturing in April 2026. The NZ$33.2m term loan consists of an NZ$18.2m term loan, NZ$10.0m working capital facility and a NZ$5.0m business finance scheme loan (maturing in May 2026). In addition, AFT also holds an overdraft facility with BNZ, which was increased to NZ$9.5m on 15 September 2023 (up from NZ$3.0m previously). As of end-H124, AFT had utilised NZ$3.6m of the overdraft facility. We estimate that the company will end FY24 with a net debt position of NZ$27m, which translates to net debt/EBITDA of 1.1x, slightly ahead of management’s target of 1.0x.

Valuation

We value AFT using a discounted cash flow (DCF) valuation methodology, projecting free cash flows over a 10-year explicit forecast period (FY24–33e) and thereafter ascribing a terminal growth value (assuming conservative 2% ongoing top-line growth and an EBIT margin of 36%). We have incorporated the H124 performance into our model and have made the aforementioned revisions to our near-term forecasts based on current trends, management guidance and operational visibility. In addition to our explicit forecasts, we have also upgraded our longer-term top-line estimates, to incorporate the potential growth opportunity from further international expansion, particularly in the US. The upside from this has been partially offset by a slower ramp-up to peak operating margin (36%), which we now assume in our model.

After incorporating these changes and adjusting for the latest net debt position, we adjust our valuation for AFT to NZ$723m or NZ$6.90/share from NZ$644m or NZ$6.14/share previously. We note that the company has disclosed its intention to declare a dividend for FY24, which we also reflect in our model (assuming a 10% payout ratio, in line with the 11% paid in FY23). We see this announcement of consecutive dividend payouts as a sign of strengthening business operations and improving cash flow expectations, a positive boost to investor sentiment in our opinion.

Exhibit 3: AFT DCF valuation

NZ$'000s

2024e

2025e

2026e

2027e

2028e

2029e

2030e

2031e

2032e

2033e

Revenue

189,841

234,079

287,029

315,732

339,412

356,382

374,201

392,911

412,557

433,185

Growth (%)

21.2%

23.3%

22.6%

10.0%

7.5%

5.0%

5.0%

5.0%

5.0%

5.0%

EBIT

22,716

40,345

53,553

69,433

77,149

99,447

112,872

131,640

139,943

149,058

Margin (%)

12.0%

17.2%

18.7%

22.0%

22.7%

27.9%

30.2%

33.5%

33.9%

34.4%

Tax

(5,693)

(10,507)

(14,205)

(18,651)

(20,812)

(27,055)

(30,814)

(36,069)

(38,394)

(40,946)

Rate (%)

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

D&A

1,696

1,696

1,696

1,696

1,696

1,696

1,696

1,696

1,696

1,696

Working capital

(2,496)

(4,932)

(4,966)

(5,592)

(5,732)

(5,875)

(5,875)

(5,875)

(5,875)

(5,875)

Capex

(9,728)

(9,772)

(10,784)

(10,676)

(10,329)

(9,761)

(9,224)

(8,717)

(8,238)

(7,785)

Free cash flow

6,495

16,831

25,294

36,209

41,972

58,451

68,654

82,674

89,132

96,147

Value (NZ$m)

Value/share

(NZ$)

DCF for forecast period (2024 to 2033)

270.9

2.58

Terminal value

483.2

4.61

Enterprise value

754.1

7.19

Net cash (debt) at end March 2023

(30.6)

(0.29)

Equity value

723.4

6.90

Source: Edison Investment Research

Exhibit 4 captures the sensitivity of our valuation to terminal EBIT margin and revenue growth assumptions.

Exhibit 4: DCF sensitivity (NZ$/share)

Terminal EBIT margin

Terminal revenue growth

30%

34%

36%

40%

45%

-2.0%

4.78

5.17

5.37

5.75

6.24

-1.0%

5.01

5.43

5.65

6.07

6.60

0.0%

5.28

5.75

5.98

6.45

7.03

1.0%

5.61

6.13

6.39

6.91

7.55

2.0%

6.03

6.61

6.90

7.48

8.21

3.0%

6.56

7.22

7.55

8.22

9.05

4.0%

7.27

8.04

8.43

9.20

10.17

5.0%

8.26

9.18

9.65

10.58

11.74

Source: Edison Investment Research

Exhibit 5: Financial summary

NZ$000

2022

2023

2024e

2025e

Year end 31 March

NZGAAP

NZGAAP

NZGAAP

NZGAAP

PROFIT & LOSS

Revenue

 

 

130,314

156,641

189,841

234,079

Cost of Sales

(68,539)

(83,658)

(104,413)

(121,721)

Gross Profit

61,775

72,983

85,429

112,358

Operating Expenses

(40,567)

(51,590)

(65,831)

(70,316)

Other Operating Income

225

-

4,814

-

EBITDA

 

 

21,433

21,393

24,412

42,041

Depreciation

(784)

(808)

(914)

(914)

Operating Profit (before amort. and excepts.)

 

 

20,649

20,585

23,498

41,127

Intangible Amortisation

(260)

(916)

(782)

(782)

Exceptionals

-

-

-

-

Other

-

-

-

-

Operating Profit

20,389

19,669

22,716

40,345

Net Interest

(1,704)

(3,870)

(2,384)

(2,822)

Profit Before Tax (norm)

 

 

18,945

16,715

21,114

38,305

Profit Before Tax (reported)

 

 

18,685

15,799

20,332

37,523

Tax

1,163

(5,145)

(5,693)

(10,507)

Profit After Tax (norm)

20,108

11,570

15,421

27,799

Profit After Tax (reported)

19,848

10,654

14,639

27,017

Average Number of Shares Outstanding (m)

104.7

104.8

104.9

104.9

EPS - normalised (c)

 

 

19.2

11.0

14.7

26.5

EPS - (reported) (NZ$)

 

 

0.19

0.10

0.14

0.26

Dividend per share (c)

0.00

1.10

1.47

2.65

Gross Margin (%)

47.4

46.6

45.0

48.0

EBITDA Margin (%)

16.4

13.7

12.9

18.0

Operating Margin (before GW and except.) (%)

15.8

13.1

12.4

17.6

BALANCE SHEET

Fixed Assets

 

 

44,218

53,463

66,957

75,033

Intangible Assets

38,093

45,627

53,652

61,677

Tangible Assets

3,360

3,365

3,372

3,423

Investments

2,765

4,471

9,933

9,933

Current Assets

 

 

77,542

93,142

104,260

129,348

Stocks

33,500

42,397

48,757

53,632

Debtors

36,002

46,718

48,519

56,265

Cash

7,940

3,291

6,248

18,715

Other

100

736

736

736

Current Liabilities

 

 

(29,050)

(38,317)

(48,443)

(56,133)

Creditors

(23,845)

(36,376)

(42,040)

(49,730)

Short term borrowings

(4,000)

(1,000)

-

-

Other

(1,205)

(941)

(6,403)

(6,403)

Long Term Liabilities

 

 

(35,966)

(35,020)

(36,020)

(36,020)

Long term borrowings

(33,200)

(32,200)

(33,200)

(33,200)

Other long term liabilities

(2,766)

(2,820)

(2,820)

(2,820)

Net Assets

 

 

56,744

73,268

86,753

112,228

CASH FLOW

Net income

19,848

10,654

14,639

27,017

Movements in working capital

(7,472)

(6,947)

(2,496)

(4,932)

Depreciation and amortisation

1,044

1,724

1,696

1,696

Net Interest

2,084

2,625

2,886

2,822

Taxes

(1,175)

3,742

-

-

Other adjustments

(177)

(169)

-

-

Cash flow from operating activities

 

 

14,152

11,629

16,725

26,603

Capex

(329)

(197)

(190)

(234)

Acquisitions/disposals

(5,256)

(8,980)

(9,538)

(9,538)

Cash flow from investing activities

 

 

(5,585)

(9,177)

(9,728)

(9,772)

Financing

295

475

-

-

Dividends

-

-

(1,154)

(1,542)

Net Borrowings

500

(4,593)

-

-

Other adjustments

(4,709)

(2,860)

(2,886)

(2,822)

Cash flow from financing activities

 

 

(3,914)

(6,978)

(4,039)

(4,364)

Cash and cash equivalents at the beginning of the period

3,209

7,940

3,291

6,248

Increase/(decrease) in cash and equivalents

4,653

(4,526)

2,957

12,467

Effect of FX on cash and equivalents

78

(123)

-

-

Cash and equivalents at end of period

7,940

3,291

6,248

18,715

Closing net debt/(cash)

 

 

29,260

29,909

26,952

14,485

Source: Company report, Edison Investment Research

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This report has been commissioned by AFT Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by AFT Pharmaceuticals. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

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The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by AFT Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by AFT Pharmaceuticals. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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