AFT Pharmaceuticals — Growth underpinned by international momentum

AFT Pharmaceuticals (ASX: AFT)

Last close As at 24/06/2024

NZD3.00

0.15 (5.26%)

Market capitalisation

NZD315m

More on this equity

Research: Healthcare

AFT Pharmaceuticals — Growth underpinned by international momentum

AFT Pharmaceuticals’ FY24 results demonstrated record earnings and sales, with 24.8% year-on-year sales growth. Revenues of NZ$195.4m were driven by strong domestic market performance (+13.6%) and solid traction from international (Asia and RoW) markets (+ 108% y-o-y, supported by a NZ$6m milestone payment from US partner Hikma). Investments in future growth (R&D and marketing) and sales-mix effects slightly affected margins adversely (operating margin of 12.4% in FY24 vs our expectation of 12.8%) but we anticipate the upfront investments will provide a revenue uptick from FY26. AFT’s balance sheet remains strong, allowing for a dividend announcement for FY24 (1.6c/share; c 10% payout ratio) and a reduction in debt, both positive signs for investors. We tweak our estimates for the results and FY25 guidance (operating profit of NZ$22–25m, excluding any licence payments), resulting in our valuation adjusting to NZ$725.5m or NZ$6.92/share (from NZ$698m or NZ$6.65/share).

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

AFT Pharmaceuticals

Growth underpinned by international momentum

FY24 results

Pharma and biotech

23 May 2024

Price

NZ$3.0

Market cap

NZ$315m

NZ$0.61/US$

Net debt (NZ$m) at 31 March 2024

16.2

Shares in issue

104.9m

Free float

25.5%

Code

AFT

Primary exchange

NZX

Secondary exchange

ASX

Share price performance

%

1m

3m

12m

Abs

(2.9)

(13.0)

(19.4)

Rel (local)

(1.8)

(12.4)

(14.8)

52-week high/low

NZ$3.90

NZ$2.60

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 Rapid launch

FY25

H125 results

November 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’ FY24 results demonstrated record earnings and sales, with 24.8% year-on-year sales growth. Revenues of NZ$195.4m were driven by strong domestic market performance (+13.6%) and solid traction from international (Asia and RoW) markets (+ 108% y-o-y, supported by a NZ$6m milestone payment from US partner Hikma). Investments in future growth (R&D and marketing) and sales-mix effects slightly affected margins adversely (operating margin of 12.4% in FY24 vs our expectation of 12.8%) but we anticipate the upfront investments will provide a revenue uptick from FY26. AFT’s balance sheet remains strong, allowing for a dividend announcement for FY24 (1.6c/share; c 10% payout ratio) and a reduction in debt, both positive signs for investors. We tweak our estimates for the results and FY25 guidance (operating profit of NZ$22–25m, excluding any licence payments), resulting in our valuation adjusting to NZ$725.5m or NZ$6.92/share (from NZ$698m or NZ$6.65/share).

Year
end

Revenue (NZ$m)

PBT*
(NZ$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

03/23

156.6

16.7

11.0

1.10

27.2

0.4

03/24

195.4

23.0

15.8

1.60

18.9

0.5

03/25e

232.4

23.6

16.5

1.65

18.2

0.5

03/26e

278.3

40.8

28.3

2.83

10.6

0.9

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

Broad-based growth, led by international markets

FY24 revenues of NZ$195.4m were ahead of our estimate (NZ$187.5m), led by strong sales traction from the company’s international growth efforts (Maxigesic launched in 12 countries, business hubs established in the US, Canada and UK). Revenue from overseas markets (Asia and RoW) grew 2x to NZ$38.5m and now contributes c 20% of group sales (up from c 12% in FY23). Domestic markets (particularly the OTC segment) remained strong, contributing NZ$157m to sales (18 new products launched), albeit a lower-margin sales mix, overstocking losses and high marketing/launch expenses affected group margins, offsetting the strong profitability from international markets. With 61 new launches planned for FY25–26 and continued focus on R&D, we expect margins to remain under pressure in FY25 (we project an operating margin of 10.2%) before recovering from FY26 onwards.

Dividend announcement another sign of good health

Strong operating cash flows (NZ$28.9m in FY24) and a strengthening balance sheet (net debt below the 1x EBITDA target) have allowed AFT to declare a second successive dividend (1.6c/share; c 10% payout ratio), a 45% y-o-y DPS increase. With the projected growth in revenues and cash flow improvements, we expect the company to remain well capitalised to support its business expansion efforts.

Valuation: Adjusts to NZ$725.5m or NZ$6.92/share

We roll forward our model and adjust our estimates for the FY24 performance, the FY25 operating profit guidance and the latest net debt figure. We also make certain modifications to our longer-term assumptions, in particular reducing the peak operating margin to 34% from 36% previously. Our valuation adjusts to NZ$725.5m or NZ$6.92/share, from NZ$698m or NZ$6.65/share previously.

Robust FY24 spearheaded by international markets

FY24 (12 months ending March 2024) was another solid year for AFT, with its impetus on international expansion reflected in growing traction from these markets. Total group revenues were NZ$195.4m, 24.8% y-o-y growth over FY23 (NZ$156.6m), and were ahead of our estimate of NZ$187.5m. Reflecting the seasonality in the business, the H2 performance was sequentially stronger (NZ$111.8m in revenue, 33.7% growth over H124 and 23.0% over H223). FY24 top-line performance was driven by a strong contribution from the Asian and international markets (combined growth of 108% y-o-y to NZ$38.5m; +70% excluding licence income) and steady 13.6% growth from the domestic Australasia market (to NZ$156.9m). The growth was supported by the receipt of NZ$8.5m from licensing income from international markets (NZ$0.9m in FY23), which included NZ$6m in a milestone payment from US distribution partner Hikma (following the launch of Maxigesic IV in the country in February 2024) and another c NZ$2m from its Italian licensee in H124. Globally, product sales and royalties increased to NZ$186.9m, a 20% jump year-on-year. Domestic markets (Australia and New Zealand) continue to remain the company’s largest contributor to sales, although their share declined to 80.3% of total group revenue versus 88.2% in FY23, reflecting the results from the company’s internationalisation efforts.

Gross margins were down 1.4pp to 45.2% (46.6% in FY23) due to some price discounting (because of overstocking), stock write-offs and change in sales mix in domestic markets (stronger sales from lower-margin products), which offset the flow-through benefits from the higher licensing payments (which have a 100% margin). Operating profit was recorded at NZ$24.2m, at the upper end of the guided range of NZ$23–25m, and a 23.2% increase on the FY23 figure of NZ$19m. Operating margin was 12.4%, mildly below the previous year figure of 12.6%. This was a result of continued investment by the company in sales and marketing activities (related to marketing and launch efforts) as well as in its R&D development programmes. Selling and distribution expenses increased by 23.8% y-o-y to NZ$45.3m, with increased marketing push (particularly in H124). R&D expenses grew 43.3% to NZ$8.1m, with the announcement of several new R&D programmes during the period (discussed in more detail later). This included NZ$3.2m in R&D-related employee emoluments and NZ$4.9m spent specifically on development activities (+63.7% over the corresponding expense of NZ$3.0m in FY23). The total development-related R&D expense was c NZ$12m for the year, including capitalised R&D of over NZ$7m. General and administrative expenses were broadly flat at NZ$11.2m (NZ$11.1m in FY23).

Net profit for the year was NZ$15.6m, a 46.5% increase over the previous year, with lower financial expenses offset by higher tax payouts. Operating cash flows improved materially to NZ$28.9m (NZ$11.6m in FY23), supported by higher net profitability and a favourable working capital position. The stronger balance sheet supported the announcement of a second consecutive dividend payout by the company of 1.6c per share or c NZ$1.7m, payable in July 2024. This is a c 45% rise over the FY23 DPS payout of 1.1c and translates to a payout ratio of c 10%. In addition to the dividend payout, the company was able to reduce indebtedness, with a repayment of NZ$5m of the outstanding NZ$33.2m loan from the Bank of New Zealand during the year. Net debt at the end of FY23 was NZ$16.2m (vs NZ$30.6m at end-H124), which allowed the company to go below its 1x EBITDA gearing target. FY24 EBITDA was NZ$26.2m, up 22% from the FY23 figure of NZ$21.4m.

Double-digit domestic market growth

Revenue from Australia, which accounted for 55.4% of FY24 group revenue, grew 15% y-o-y to NZ$108.2m, led by a mix of organic and new product growth. The over-the-counter (OTC) channel, representing 70.3% of segmental revenue, grew at a solid rate of 24% y-o-y, driven by strong demand across all seven core therapeutic categories (eyecare, pain management, dermatology, gastrointestinal, vitamins, allergy and hospitals). AFT’s Maxigesic and liposomal vitamins were leaders in their respective segments. The other two channels – hospital and prescription – recorded low single-digit decline of -2.0% and -4.0% y-o-y, respectively. Operating profit for the region fell to NZ$15.5m (versus NZ$19.3m in FY23), with operating margin declining to 14.3% from 20.5% in FY23. This was primarily due to increased marketing spend associated with new product launches along with some price discounting, estimated by management to normalise in FY25.

In the home market of New Zealand, revenue grew by 10.7% y-o-y to NZ$48.7m, led by demand for the company’s existing as well as new products. The OTC channel, which accounts for 55.1% of the segment’s sales, had the strongest growth, increasing by c 16% to NZ$26.8m. Growth in revenue from the hospital and prescription channels were relatively subdued at 6.8% and 3.1%, respectively. Operating profit, excluding group head office costs, was down to NZ$7.3m from NZ$8.1m in FY23. Similar to Australia, this reflects the increased marketing spend on product launches and brand building for Maxigesic products (Maxigesic sponsored One New Zealand Warriors as its official pain relief partner). Including head office-related expenses, the segment reported an operating loss of NZ$2.3m versus NZ$0.8m in FY23.

We highlight that AFT launched 18 new products in domestic markets in FY24 including extensions of its Ferro range, preservative-free eye drop range and hospital injectable products. This is slightly lower than the expected launch of 20 new products (guided in the H124 earnings release), with management attributing this to delays in receiving regulatory approvals. With these launches, the total number of product offerings in Australasia markets stands at more than 150. Furthermore, with the FY24 release, the company has increased the number of new launches planned in Australasia during FY25–26 to 61 from 53 guided earlier.

Exhibit 1: FY24 results by region

NZ$000

Revenue

Operating profit before tax

FY23

FY24

% change

FY23

FY24

% change

Australia

94,117

108,209

15%

19,291

15,510

(20%)

New Zealand

44,027

48,719

11%

(840)

(2,334)

178%

Asia

6,814

10,694

57%

773

2,504

224%

International

11,683

27,789

138%

445

8,555

(1,822%)

Source: AFT Pharmaceuticals

Strong momentum in the overseas market

Similar to H124, revenue growth for the full FY24 was driven by growth in AFT’s overseas market, which benefited from the waning pandemic-related headwinds. Revenue from Asia (5.5% of FY24 group revenue) rose 56.9% y-o-y to NZ$10.7m, with solid growth across all channels. The hospital channel, representing 67.9% of segmental revenue, grew 34.6% y-o-y, driven by stronger-than-expected demand for Maxigesic IV in the South Korean market, where it received regulatory approval in September 2021. The OTC channel (23.9% of segmental sales) also reported impressive 155.8% y-o-y 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 in Asia, the approval of its Crystaderm antiseptic cream in November 2023 by the National Medical Products Administration (NMPA) should allow the company access to the offline retail and hospitals segments, which account for 75% of the OTC market in China, and this is therefore a much larger opportunity. Operating profit in Asia improved substantially to NZ$2.5m in FY24 from NZ$0.8m in FY23, with the operating margin rising from 11.3% in FY23 to 23.4% in FY24.

The international segment was the best performing during this period, with revenues increasing by a solid 137.9% y-o-y in FY24 to NZ$27.8m, helped by growing momentum in product sales as well as the receipt of licensing income this year. Product sales and royalties rose materially by 78.1% yo-y to NZ$19.3m, driven by growth in Maxigesic sales. Maxigesic is now available in 73 countries in various formats (versus 61 in FY23) including in the US, Belgium, Kenya, Singapore, South Africa and some Eastern European countries. Licensing income was up significantly, to c NZ$8.5m (from c NZ$0.9m in FY23), and included milestone payments from its licensee in the US Hikma Pharmaceuticals (c NZ$6m related to the launch of Maxigesic IV in the US) and its licensee in Italy (NZ$2.0m). The strong top-line performance and benefit from the licensing income flowed down, with the segment reporting operating profit of NZ$8.6m (versus NZ$0.4m in FY23). With several launches of Maxigesic planned in the coming months, including the Maxigesic Rapid launch in the US and Maxigesic IV launch in Canada, we expect momentum to stay strong for this market. We also note that the AFT UK business is now well established with the launch of Combogesic tablets and IV in FY24, and the company plans to launch about 40 products in this market in the future. 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 the near term, driven by the ongoing roll-out of Maxigesic and its line extensions (across several dose formats), gaining traction in Asia and international markets, the launch of new products in Australasia and a robust product development pipeline. With the company nearly achieving its target of NZ$200m rolling 12-month revenue in FY24, it is now turning to the next target of NZ$300m annual revenue. Furthermore, AFT aims to generate FY25 operating profit in the range of NZ$22–25m (excluding any licensing income payments).

Maxigesic: The near-term international growth lever

While we expect the domestic Australasia market to continue to make material contributions to the company’s growth in the medium term (61 new products to be launched between FY25 and FY26), international efforts will likely be underpinned by the growth of the company’s Maxigesic range of products, its flagship, non-opioid pain-relief medicines (proprietary formulation combining acetaminophen with ibuprofen, two popular non-opioid analgesics). The product is now available in 10 dose forms/line extensions in 73 countries (up from 61 at the end of FY23) with patent protection to late-2030s in certain formulations (such as IV and rapid-dissolving tablets).

A key milestone during FY24 was the US launch of Maxigesic IV by partner Hikma (marketed as Combogesic IV in the country), marking AFT’s first foray into the lucrative US market. In March 2024, Hikma expanded its licensing agreement with AFT to commercialise Maxigesic IV in its domestic Middle East market (Saudi Arabia, Iraq and Jordan), further extending the drug’s market outreach. Maxigesic IV is a double-strength formulation of the oral version (1,000mg paracetamol and 300mg ibuprofen) and is specifically targeted at hospitals for the treatment of post-operative pain. The drug has seen a strong uptake in European countries and South Korea and we expect the market reception in the US to be of strategic importance to the company. The Phase III study, on which the US approval was based, demonstrated that Maxigesic IV offered a faster onset of action and higher pain relief than paracetamol IV and ibuprofen IV alone, making a strong case for the drug as a non-opioid alternative to available treatments, in our view. The treatment landscape for pain relief has been limited although we note the recent FDA acceptance of the rolling New Drug Application for Vertex Pharmaceuticals’ NaV1.8 inhibitor, VX-548 (suzetrigine), for the treatment of moderate-to-severe acute pain. There has been significant market buzz around a potential US approval with peak sales estimated at upwards of US$1bn. We believe this reflects the significant commercial opportunity for an effective pain management treatment, such as Maxigexic IV, in the hospital setting.

We see the next significant catalyst for AFT to be the launch of Maxigesic Rapid in the US market. The rapid-release version, which was approved by the FDA in March 2023, uses the same paracetamol+ibuprofen combination, at 65% strength of the original tablet form, and is based on the company’s patented rapid-release technology. AFT is currently evaluating the optimal distribution arrangement for the rapid formulation and a launch is planned for FY25. In February 2024, the company secured a long-term supply agreement with Microsize (a US-based pharmaceutical manufacturer) to supply micronised active pharmaceutical ingredients, critical components in the formulation of its Maxigesic Rapid pain relief medicine. Management expects the partnership will enable AFT to secure sufficient supply to meet the demand in several markets including the US and the EU. We expect a successful launch to be followed by introduction of other dose formats in the US market.

Supplemented by a broader portfolio internationally

In addition to growing its Maxigesic footprint, AFT had also been investing in expanding its presence in international markets through the establishment of subsidiaries and business hubs in the UK, EU, Canada, the US, South Africa, Singapore and Hong Kong. While Maxigesic IV and tablets have since been launched in the UK, management has indicated that it has also been bolstering the company’s product portfolio by opportunistically acquiring other product licences in the UK and EU (AFT recently acquired six product licences from an insolvent German firm). In the UK, as previously noted, the company has identified 40 own and licensed products to be launched in the country in the near future. AFT also plans to launch Maxigesic IV in Canada through its Canadian subsidiary.

We also see the impending launch of Crystaderm antiseptic cream in the Chinese market (expected in CY24) as another key event for the company. While selected AFT products are available for Chinese consumers through e-commerce, The NMPA approval allows launch in the offline retail and hospital segments, which together account for 75% of the Chinese OTC market. We expect this launch to be followed by other product launches in China as AFT established its footprint in the country.

R&D initiatives to drive longer-term growth

AFT continues to invest in its R&D pipeline (total R&D-related expenses were NZ$12.0m in FY24, steady from NZ$11.8m in FY23) and we expect these new additions to support longer-term growth. As of 31 March 2024, AFT had seven projects in its development portfolio across different therapeutic areas such as dermatology, eyecare, pain management and drug delivery. Three of these projects have been added over the last year including two in partnership with Hyloris Pharmaceuticals – HY-090, a locally acting novel molecule targeting Burning Mouth Syndrome (pain), and HY-091 targeting vulvar lichen sclerosus (dermatology) – and one in partnership with Massey Ventures and the Gillies McIndoe Research Institute to develop a treatment for keloid scars (dermatology). We note that the company is already undertaking a development project in collaboration with the institute to treat strawberry birthmarks. All these projects hold significant global sales potential if successfully developed, in our view, and support management’s ultimate objective to expand its global footprint and achieve its long-term goal to have international markets represent 35% of sales. Exhibit 2 presents a snapshot of AFT’s R&D projects.

Exhibit 2: AFT’s R&D pipeline

Source: AFT Annual Report, May 2024

Forecasts and financials

Based on the FY24 performance and operating profit guidance for FY25, we have adjusted our FY25 revenue and expense estimates and have also introduced FY26 projections. Based on the FY24 revenues, international growth trend and domestic market stability, we have increased our FY25 revenue estimate to NZ$232.4m, from NZ$223.5m previously. In terms of segmental forecasts, we have upgraded our estimates for New Zealand (NZ$53.6m vs NZ$50.4m previously) while keeping the revenue projections for Australia broadly stable at NZ$126.6m. The major upgrade in our estimates is to international (RoW) markets, where we now project revenues of NZ$36.1m vs NZ$29.7m previously to reflect the solid FY24 performance. Note that this does not reflect any contribution from licensing or milestone payments. For Asia, we have marginally reduced our revenue estimate to NZ$16.0m from NZ$16.9m previously. For FY26, we project sales of NZ$278.3m to account for potential incremental contributions from Maxigesic IV and Rapid in the US and Crystaderm in China. Management has revised its rolling revenue target to NZ$300m, which we expect it to achieve by early FY27.

Given the change in sales mix in FY24, we have conservatively reduced our FY25 gross margin expectations to 45% (down from 46.9% previously). For FY26, we estimate gross margin of 46.9%. We have also raised our operating expense estimate for FY25 to NZ$80.6m from NZ$74.9m previously, to reflect management guidance for operating profit. We now project an operating profit of NZ$23.9m in FY25 (NZ$28.3m previously). This translates to an operating margin of 10.2% versus 12.7% previously. We expect margins to start improving in FY26 and estimate an operating profit of NZ$41.4m in FY26 (margin of 14.9%).

Valuation

We value AFT using a discounted cash flow (DCF) valuation methodology, projecting free cash flows over a 10-year explicit forecast period (FY25–34e) and thereafter ascribe a terminal growth value (assuming conservative 2% ongoing top-line growth). We have incorporated the recent FY24   performance into our model and have made the aforementioned revisions to our forecasts based on current trends, management guidance and operational visibility. In addition to our near-term forecasts, we have also made certain changes to our longer-term top-line estimates (in particular trimming the estimate of peak operating margin to 34% from 36% previously), to reflect our opinion of the business potential and expected operating and financial performance.

After incorporating these changes, rolling forward our model and adjusting for the latest net debt position, our valuation for AFT shifts to NZ$725.5m or NZ$6.92/share, from NZ$698m or NZ$6.65/share previously. Note that our net debt estimate is pro-forma for the planned dividend payout of NZ$1.7m in July 2024.

Exhibit 3: AFT DCF valuation

NZ$'000s

2025e

2026e

2027e

2028e

2029e

2030e

2031e

2032e

2033e

2034e

Revenue

232,362

278,333

306,167

329,129

345,586

362,865

381,008

400,059

420,062

441,065

Growth (%)

18.9%

19.8%

10.0%

7.5%

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

EBIT

24,583

41,409

53,402

66,650

81,022

93,378

110,924

126,334

134,941

144,024

Margin (%)

10.6%

14.9%

17.4%

20.3%

23.4%

25.7%

29.1%

31.6%

32.1%

32.7%

Tax

(6,331)

(11,140)

(14,498)

(18,207)

(22,231)

(25,691)

(30,604)

(34,919)

(37,329)

(39,872)

Rate (%)

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

D&A

2,013

2,013

2,013

2,013

2,013

2,013

2,013

2,013

2,013

2,013

Working capital

1,500

(6,008)

(6,595)

(6,760)

(6,929)

(6,929)

(6,929)

(6,929)

(6,929)

(6,929)

Capex

(9,549)

(9,576)

(9,480)

(9,172)

(8,668)

(8,191)

(7,741)

(7,315)

(6,913)

(6,532)

Free cash flow

12,217

16,699

24,841

34,523

45,206

54,580

67,663

79,184

85,783

92,704

Value (NZ$m)

Value/share

(NZ$)

DCF for forecast period (2024 to 2033)

269.4

2.57

Terminal value

473.9

4.52

Enterprise value

743.3

7.09

Pro-forma net cash (debt) at end March 2024 (post-dividend)

(17.8)

(0.17)

Equity value

725.5

6.92

Source: Edison Investment Research

Exhibit 4: Financial summary

NZ$000

2023

2024

2025e

2026e

Year end 31 March

NZGAAP

NZGAAP

NZGAAP

NZGAAP

PROFIT & LOSS

Revenue

 

 

156,641

195,411

232,362

278,333

Cost of Sales

(83,658)

(107,139)

(127,893)

(147,821)

Gross Profit

72,983

88,272

104,469

130,513

Operating Expenses

(51,590)

(62,552)

(77,873)

(87,090)

Other Operating Income

-

528

-

-

EBITDA

 

 

21,393

26,248

26,596

43,422

Depreciation

(808)

(1,003)

(1,003)

(1,003)

Operating profit (before amort. and excepts.)

 

 

20,585

25,245

25,593

42,419

Intangible Amortisation

(916)

(1,010)

(1,010)

(1,010)

Exceptionals

-

-

-

-

Other

-

-

-

-

Operating Profit

19,669

24,235

24,583

41,409

Net Interest

(3,870)

(2,216)

(1,974)

(1,624)

Profit Before Tax (norm)

 

 

16,715

23,029

23,619

40,795

Profit Before Tax (reported)

 

 

15,799

22,019

22,609

39,785

Tax

(5,145)

(6,410)

(6,331)

(11,140)

Profit After Tax (norm)

11,570

16,619

17,288

29,656

Profit After Tax (reported)

10,654

15,609

16,278

28,646

Average Number of Shares Outstanding (m)

104.8

104.9

104.9

104.9

EPS - normalised (c)

 

 

11.0

15.8

16.5

28.3

EPS - (reported) (NZ$)

 

 

0.10

0.15

0.16

0.27

Dividend per share (c)

1.10

1.60

1.65

2.83

Gross Margin (%)

46.6

45.2

45.0

46.9

EBITDA Margin (%)

13.7

13.4

11.4

15.6

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

13.1

12.9

11.0

15.2

BALANCE SHEET

Fixed Assets

 

 

53,463

59,530

67,066

74,629

Intangible Assets

45,627

53,459

61,058

68,656

Tangible Assets

3,365

3,821

3,758

3,723

Investments

4,471

2,250

2,250

2,250

Current Assets

 

 

93,142

105,727

116,063

136,285

Stocks

42,397

49,057

53,963

59,359

Debtors

46,718

44,222

46,088

53,753

Cash

3,291

12,040

15,605

22,765

Other

736

408

408

408

Current Liabilities

 

 

(38,317)

(46,068)

(54,340)

(61,394)

Creditors

(36,376)

(42,267)

(50,539)

(57,593)

Short term borrowings

(1,000)

-

-

-

Other

(941)

(3,801)

(3,801)

(3,801)

Long Term Liabilities

 

 

(35,020)

(31,394)

(26,394)

(21,394)

Long term borrowings

(32,200)

(28,200)

(23,200)

(18,200)

Other long term liabilities

(2,820)

(3,194)

(3,194)

(3,194)

Net Assets

 

 

73,268

87,795

102,396

128,126

CASH FLOW

Operating Cash Flow

10,654

15,609

16,278

28,646

Movements in working capital

(6,947)

1,502

1,500

(6,008)

Depreciation and amortisation

1,724

2,013

2,013

2,013

Net Interest

2,625

3,314

1,974

1,624

Taxes

3,742

5,188

-

-

Other adjustments

(169)

1,235

-

-

Cash flow from operating activities

 

 

11,629

28,861

21,766

26,275

Capex

(197)

(116)

(138)

(165)

Acquisitions/disposals

(8,980)

(9,411)

(9,411)

(9,411)

Cash flow from investing activities

 

 

(9,177)

(9,527)

(9,549)

(9,576)

Financing

475

-

-

-

Dividends

-

(1,154)

(1,678)

(2,915)

Net Borrowings

(4,593)

(5,859)

(5,000)

(5,000)

Other adjustments

(2,860)

(3,620)

(1,974)

(1,624)

Cash flow from financing activities

 

 

(6,978)

(10,633)

(8,652)

(9,539)

Cash and cash equivalents at the beginning of the period

7,940

3,291

12,040

15,605

Increase/(decrease) in cash and equivalents

(4,526)

8,701

3,565

7,160

Effect of FX on cash and equivalents

(123)

48

-

-

Cash and equivalents at end of period

3,291

12,040

15,605

22,765

Closing net debt/(cash)

 

 

29,909

16,160

7,595

(4,565)

Source: Company report, Edison Investment Research

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Copyright: Copyright 2024 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

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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 2024 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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