AFT Pharmaceuticals — Near-term goals in sight with FY23 momentum

AFT Pharmaceuticals (ASX: AFT)

Last close As at 24/02/2024

NZD3.45

0.01 (0.29%)

Market capitalisation

NZD362m

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Research: Healthcare

AFT Pharmaceuticals — Near-term goals in sight with FY23 momentum

AFT Pharmaceuticals reported another strong fiscal year, capping off three consecutive years of double-digit top-line growth. FY23 revenues of NZ$156.6m grew 20.2% year-on-year. As expected, top-line growth was H2 weighted, with a c 38% sequential improvement in H223 over H123 attributed primarily to new launches in Australia (revenue up c 61% over H123 in the region). Margins, however, were affected by lower licensing income and higher product launch marketing spend (operating margin of 12.6% vs 15.6% in FY22). We expect management to achieve the stated revenue target of NZ$200m in FY25, supported by higher marketing spends that will put some pressure on margins in the near term (FY24 operating profit guidance of NZ$22–24m). Management also announced a maiden dividend of 1.1c/share (payable in July 2023), although the payout (c 11%) is lower than the initial target of 20–30%. Accordingly, our valuation adjusts to NZ$644m or NZ$6.14/share from NZ$6.34/share previously.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

AFT-Pharmaceuticals_resized

Healthcare

AFT Pharmaceuticals

Near-term goals in sight with FY23 momentum

FY23 update

Pharma and biotech

24 May 2023

Price

NZ$3.75

Market cap

NZ$393m

NZ$0.63/US$

Net debt (NZ$m) at 31 March 2023

29.9

Shares in issue

104.9m

Free float

26.8%

Code

AFT

Primary exchange

NZX

Secondary exchange

ASX

Share price performance

%

1m

3m

12m

Abs

7.1

7.1

2.7

Rel (local)

7.0

7.8

0.4

52-week high/low

NZ$4.25

NZ$3.23

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

Half year results

November 2023

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Nidhi Singh

+44 (0)20 3077 5700

Jyoti Prakash, CFA

+44 (0)20 3077 5700

AFT Pharmaceuticals is a research client of Edison Investment Research Limited

AFT Pharmaceuticals reported another strong fiscal year, capping off three consecutive years of double-digit top-line growth. FY23 revenues of NZ$156.6m grew 20.2% year-on-year. As expected, top-line growth was H2 weighted, with a c 38% sequential improvement in H223 over H123 attributed primarily to new launches in Australia (revenue up c 61% over H123 in the region). Margins, however, were affected by lower licensing income and higher product launch marketing spend (operating margin of 12.6% vs 15.6% in FY22). We expect management to achieve the stated revenue target of NZ$200m in FY25, supported by higher marketing spends that will put some pressure on margins in the near term (FY24 operating profit guidance of NZ$22–24m). Management also announced a maiden dividend of 1.1c/share (payable in July 2023), although the payout (c 11%) is lower than the initial target of 20–30%. Accordingly, our valuation adjusts to NZ$644m or NZ$6.14/share from NZ$6.34/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

19.5

N/A

03/23

156.6

16.7

11.0

1.10

34.0

0.3

03/24e

184.0

21.7

15.2

1.43

24.7

0.4

03/25e

214.0

39.2

27.3

2.64

13.7

0.7

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

Solid top-line momentum across key markets

FY23 performance was driven by robust organic growth across most regions and bolstered by 22 new product launches. Domestic (ANZ) market growth continued to lead the way with combined revenue of NZ$138m (up 23.6% y-o-y, driven by strong over-the-counter, OTC, performance) and contributed 88% to group revenues, while Asian markets remained strong with 24.2% y-o-y growth to NZ$6.8m. The uplift was partially offset by a 10.7% decline in international sales due to lower licensing income (deferred NZ$6m milestone from Hikma, now expected in CY24), which also weighed on group operating margins. Management expects 26 product launches in FY24, which should support top-line momentum although margins will likely be affected with continued sales and marketing-related investment.

Maiden dividend payout a sentiment booster

AFT’s announcement of its maiden dividend (1.1c/share or NZ$1.2m, payable in July 2023) was expected, although the 11% payout was more conservative than the targeted 20–30% of normalised net profit after tax. With incremental growth opportunities from markets such as the US (launch of Maxigesic Rapid and IV, potentially) and China (first product, Crystawash Extend, approved by the National Medical Products Administration), we foresee future dividend payouts adding confidence to shareholders, particularly in the challenging macro environment.

Valuation: NZ$644m or NZ$6.14/share

Our valuation (ex-dividend) adjusts to NZ$644m or NZ$6.14/share from NZ$665m or NZ$6.34/share previously, largely due to higher-than-expected marketing spend (in line with FY24 operating profit guidance) partially offset by rolling forward model.

Broad-based growth in FY23

AFT reported solid 20.2% y-o-y revenue growth to NZ$156.6m in FY23, slightly ahead of our estimate of NZ$152.2m. As expected, H223 was sequentially stronger, with revenue growing 38.2% over H123 and 21.5% y-o-y over H222. The full year growth was primarily driven by strong product sales across all regions supported by 22 new product launches in Australasia. Product sales were up significantly, to NZ$155.8m (+26.1% y-o-y), although the impact on group revenues was partially offset by lower licensing income (NZ$0.9m vs NZ$6.7m in FY22). This decline can be attributed to the delay in the anticipated licensing income from Hikma Pharmaceuticals (~NZ$6m), which we now expect in CY24 following additional data submission for Maxigesic IV to the US FDA. Domestic markets (Australia and New Zealand) remain the largest markets for the company, accounting for 88% of total group revenue, with the remaining 12% contributed by other Asian markets and international business.

The lower licensing income also affected gross profitability, with the FY23 gross margin reported at 46.6%, 0.8pp down from 47.4% in FY22. Reported operating profit declined slightly to NZ$19.7m, representing margin of 12.6%, lower than 15.6% in FY22. This was primarily due to the shift in revenues (lower milestone payments) and increased promotional and launch-related investments (sales and marketing expenses of NZ$36.5m vs NZ$28.3m in FY22) to fuel anticipated product launches. Excluding licensing income, however, the operating profit would have risen 38% to NZ$18.8m with operating margin improving 1.1pp to 12.1%. During the year, AFT made an additional NZ$8m investment in a range of product distribution and promotional activities, including the build of a new sales team in Australia for general practitioners, increased marketing expenditure to support new product launches, the launch of a broad range of products in T-Mall, its e-commerce platform under the Cross Border E-Commerce Initiative (CBEC) in China, and setting up a new UK subsidiary. We expected this to translate into incremental sales growth in the near to medium term.

Net profit for the year was NZ$10.7m, lower than the prior year’s NZ$19.8m due to higher financial expenses and tax payouts. We assume this reflects that past tax loss carry forwards have now been fully utilised. Notably, AFT announced its first dividend of 1.1c per share or c NZ$1.2m, payable in July 2023. Though the actual dividend payout (c 11%) is lower than the original target of 20–30% of net profit, it indicates management’s confidence in AFT’s growth potential and commitment to rewarding shareholders. Management has communicated the lower payout was driven by the company’s decision to reinvest in the business and reduce indebtedness. We note that the period-end net debt was NZ$29.9m, higher than the company’s target of 1x EBITDA; FY23 EBITDA was NZ$21.4m, similar to the FY22 figure.

Strong product sales across all geographic segments

Revenue from Australia, which accounted for 60.1% of the FY23 group revenue, grew 22.8% y-o-y to NZ$94.1m. The OTC channel, representing 65.0% of revenue for Australia, grew 29.7% (y-o-y), mainly due to strong continued performance in the pain-relief segment and new product launches, further supported by the removal of comparative advertising restrictions on Maxigesic (post favourable court judgement against Reckitt Benckiser at the beginning of 2022). Eyecare and vitamins products also reported improvements as a result of additional investments made in the distribution network. While revenue from the hospital channel rose 14%, mainly due to strong growth in injectables, the prescription channel recorded moderate growth of c 5% (y-o-y) in FY23. While operating profit for the region stood at NZ$19.3m (NZ$15.7m in FY22), operating margin remained similar to FY22, at 20.5%.

New Zealand revenue was up 25.5% (y-o-y) to NZ$44.0m in FY23 due to strong post-COVID OTC growth and continued traction for all Maxigesic variants. The OTC channel (52.3% of New Zealand sales) grew c 15% to NZ$23.0m, reflecting strong organic growth for the Maxigesic range of pain-relief medicines. While the hospital channel grew c 20%, the prescription channel grew c 50% due to improved demand from general practitioners and hospitals. Including head office costs, the region booked an operating loss of NZ$0.8m in FY23 (NZ$0.1m in FY22).

We note that AFT launched 22 new products in domestic markets in FY23, which expanded the number of product offerings to over 150. With 68 new launches planned through FY26 in Australasia (including 26 in FY24 and 42 in FY2526), we see significant potential for further top-line growth and meeting the NZ$200m management target for revenues in the near term (initially stated in the H123 release).

Revenue from Asia (4.4% of FY23 group revenue) grew 24.2% (y-o-y) to NZ$6.8m in FY23, with the OTC channel leading the growth with strong Maxigesic sales in Malaysia, product launches in Korea and Indonesia, a distribution agreement with McPherson’s for the Singapore market and initial sales from the T-Mall website in China. AFT is actively expanding its distribution footprint in China post registration of Crystawash Extend. The company has also launched a range of its OTC products, including Maxigesic, Vitamin C Lipo Sachet, Vitamin D Lipo Sachet, Ferro Sachet, Crystaderm and the long-lasting Crystawash Extend, through its Kiwi Health Global Flagship Store under China’s CBEC initiative, providing additional upside for AFT. The recently expanded team in Hong Kong, which will function as the head office for Asia, should support in scaling the operations in the region. Operating profit in Asia improved 25.1% to NZ$0.8m in FY23 (NZ$0.6m in FY22).

Rest of world revenues declined by 10.7% y-o-y in FY23 to NZ$11.7m, due to lower licensing income. While product sales rose materially by 70.5% (y-o-y) as Maxigesic’s sales reach expanded to additional countries (55 in FY23 vs 46 in FY22), this was more than offset by lower licensing income, which was also reflected in the lower operating profit of NZ$0.4m (vs NZ$4.2m in FY22).

Based on current visibility in business operations, AFT has provided FY24 guidance for operating profit in the range of NZ$22–24m, excluding NZ$6m of expected licensing income in CY24 (see above). Although management believes that its rolling 12-month revenue target of NZ$200m remains viable based current product demand and upcoming product launches, the actual outcome will be contingent upon successful implementation of launches in both domestic and international markets.

FY24 key priority: Maxigesic international roll-out

While AFT intends to launch 68 products through FY24–26 in its domestic markets (Australia and New Zealand) to drive growth, Maxigesic’s international commercialisation remains the top priority in FY24. As a reminder, Maxigesic, AFT’s flagship intellectual property commercialisation product line, is a non-opioid family of pain-relief medicines and a proprietary formulation combining acetaminophen with ibuprofen, two popular non-opioid analgesics. Maxigesic uses a unique 3.3 to 1 acetaminophen to ibuprofen ratio formulation (500mg acetaminophen/150mg ibuprofen) for the purpose of pain relief. Maxigesic’s commercial roll-out is being undertaken currently in four dose forms (tablets, intravenous (IV), oral solutions and sachet). AFT intends to add a number of different formulations to its Maxigesic product line as a way of growing Maxigesic sales in both existing and new markets and as a means of lifecycle management. The company has four Maxigesic dose forms in the R&D pipeline: Maxigesic IV (US, Maxigesic Dry Stick, Maxigesic Day/Night and Maxigesic Cold, Flu and Sinus Kit.

Exhibit 1: Maxigesic’s R&D pipeline

Source: Company presentation (May 2023)

US remains a key target market

We believe that a key and hitherto untapped market for AFT’s Maxigesic range of products is the US, which is the largest analgesics market globally, pegged at US$7.2bn and estimated to grow at a CAGR of 5.8% during 2023–27. In March 2023, the approval of Maxigesic Rapid tablets by the US FDA marked AFT’s first entry into this lucrative market, although we note that commercial sales are yet to commence as AFT is finalising a licensing partner in the country. We maintain that user feedback from the sale of Maxigesic Rapid will likely influence the approval and launch of other dose forms, including the promising Maxigesic IV dose format, for which we expect the regulatory decision to come by October 2023. If approved, we expect a US launch by mid-CY24/H2 CY24. As a reminder, Maxigesic IV (developed in collaboration with Hyloris Pharmaceuticals), which is a hospital-based product, is launched in 21 countries (including Germany, France, Italy, Indonesia and Korea) and registered in 43. The IV formulation’s US roll-out was delayed after AFT received a complete response letter from the US FDA for its Maxigesic IV application in July 2022, with observation related to the leachable compounds present in the packaging of the product (the glass vial in which the medicine is stored and the vial’s stopper). In response, AFT, along with partner Hyloris Pharmaceuticals, initiated additional studies to address the FDA’s queries, generating incremental data on extractable and leachable compounds from the packaging. AFT and Hyloris submitted their response in April 2023. Following this, the US FDA allocated a Prescription Drug User Fee Act (PDUFA) date for 17 October 2023. Setting a PDUFA date means that the FDA believes the additional data and submission represent a complete response in relation to its outstanding queries on extractables and leachables in the product packaging. We see the above development as a step towards potential FDA approval of the IV formulation in the US. Given these developments, management anticipates a milestone payment of NZ$6m from Hikma in CY24.

Several initiatives to expand into other international markets

AFT has also taken several steps to expand its geographic presence across Europe and other international markets, such as setting up a UK subsidiary and multiple distribution agreements. During FY23, the company formed AFT Pharmaceuticals UK, which is 70% owned by AFT with the remainder owned by its long-term collaboration partner, Edge Pharma. The UK subsidiary will focus on expanding sales in the UK market, with first sales expected in FY24. As part of the arrangement, Edge Pharma will transfer some of product licences to the new entity.

In January 2023, AFT signed an exclusive licensing and distribution agreement for the Maxigesic IV formulation with Salus Pharmaceuticals (a Slovenia-based wholesaler of pharmaceutical products) for nine Eastern European countries: Lithuania, Estonia, Latvia, Croatia, Slovenia, Serbia, North Macedonia, Montenegro and Bosnia. The company already has product registrations for Maxigesic IV in the first five countries, where it now plans to launch in CY23. For the remaining countries, AFT intends to file product registration applications during the year. Further in March 2023, the company signed three additional licensing agreements for Maxigesic IV with Labatec in Switzerland and Pharma Bavaria in Argentina and Paraguay. With the Labatec deal, AFT aims to launch Maxigesic IV in Switzerland in the next 12–18 months. The extended agreement with Pharma Bavaria allows AFT to expand its presence in Latin America (Maxigesic is licensed in Bolivia, Chile, Colombia, Ecuador, Peru and Uruguay) although it is yet to be launched in these countries.

Exhibit 2: Maxigesic’s international expansion status

Source: Company presentation (May 2023)

Making inroads in China

In a notable development, AFT received its first product registration in China for Crystawash Extend, its long-lasting sanitiser, in March 2023. The company is exploring options to gain deeper access into the Chinese market using domestic distribution channels. We note that China launches are generally highly sought after, and we see this approval from China’s National Medical Products Administration (NMPA) as a positive development, as it allows AFT to expand into the offline retail and hospitals segments, which, according to Redfern Digital, account for 75% of the OTC market in China.

Prior to the said approval, AFT only had an online retail presence in China through its Kiwi Health Global Flagship Store under the Cross Border E-Commerce platform, T-Mall, where AFT started off July 2022 and launched a broad range of OTC products including Maxigesic, Vitamin C Lipo Sachet, Vitamin D Lipo Sachet, Ferro Sachet, Crystaderm and the long-lasting Crystawash Extend in FY23. However, we note that the online channel only accounts for 8% of the Chinese OTC market and we expect the major push to come from additional product approvals for AFT by the NMPA, to be sold in the offline retail and hospital channels.

Forecasts and financials

Based on the FY23 performance, management guidance and near-term directional visibility, we have made certain adjustments to our FY24 revenue and expense forecasts and have introduced FY25 estimates. We modestly reduce our FY24 estimates from NZ$189.7m to NZ$184.0m as we now anticipate that the NZ$6m in licensing income for Maxigesic IV will be received after end-March 2024, or FY25 for AFT (vs our previous estimate of FY24). We estimate an 11% yo-y growth in underlying product revenues (driven by new product launches in domestic markets), although we acknowledge this may turn out to be conservative if the FY23 run-rate is maintained. We expect AFT to cross its revenue target of NZ$200m in FY25 and project total revenues of NZ$214m for the year.

We also raise our FY24 COGS estimates to 52.8% of sales versus our previous estimate of 49.8% to reflect the higher than anticipated costs in FY23 (53.4% of sales vs our estimate of 52.1%) and deferred licensing income inflows, although we do project a period-on-period decline due to scale benefits. Our projection for FY24 gross margin is 47.2% (50.2% previously). We anticipate the FY25 gross margins to benefit from the direct flow-through impact of the NZ$6m licensing income from Hikma and estimate gross margin of 50.3% for the year. We also increase our operating expense estimate for FY24 to reflect the FY23 results and management guidance of NZ$22–24m in operating profits. Specifically, we raise our estimate for G&A expenses to NZ$13.1m from NZ$10.4m previously but cut our R&D expectations to NZ$6.5m (from NZ$7.6m previously) to echo the FY23 run-rate. We keep our FY24 estimates for SG&A expenses unchanged at NZ$43.9m as we were already factoring in the increased investments towards launch and marketing-related activities. Overall, we estimate operating profit of NZ$23.5m, lower than our previous estimate of NZ$33.5m. For FY25, we project operating income of NZ$41m.

Cash flows and balance sheet position

FY23 operating cash flows were NZ$10.3m (excluding interest and tax), lower than our estimate of NZ$18.7m due to increased sales and marketing-related expenses. This, along with higher than anticipated capex outflows, resulted in the period-end net debt figure staying broadly unchanged at NZ$29.9m (NZ$29.3m at end-FY22). The net debt comprised NZ$4.7m in gross cash and NZ$34.7m in debt (excluding leases of NZ$3.4m) at end-March 2023. We note that AFT holds an outstanding term loan with the Bank of New Zealand, which was renewed in September 2022 into a three-year term loan through 2026. The loan now contains a NZ$18.2m term loan (to be reduced by NZ$1m on 30 June 2023), NZ$10.0m working capital facility, NZ$3.0m overdraft and NZ$5.0m business finance scheme loan. For FY24, we expect top-line benefit to the operating cash flows to be partially offset by continued margin pressure and estimate NZ$17.9m in operating cash inflows for the year. Based on the FY23 run-rate, we also estimate higher cash taxes and capex outflows (NZ$5.8m and NZ$9.3m, respectively), which, along with the expected dividend payout (NZ$1.2m), results in our end-FY24 net debt estimate standing at NZ$28.2m. We expect a material improvement in cash inflows in FY25, driven by top-line growth and receipt of licensing income from the US. Our FY25 estimate for operating cash flow is NZ$33.9m.

Valuation

We continue to value AFT using a discounted cash flow (DCF) valuation methodology projecting free cash flows over a 10-year explicit forecast period (FY24e–FY33e) and thereafter ascribing a terminal growth value (assuming a conservative 2% ongoing top-line growth and EBIT margin of 36%). We have incorporated the recent FY23 performance in our model and made certain revisions to our forecasts based on the current trends, management guidance and near-term visibility. Our valuation for AFT Pharmaceuticals (ex-dividend) readjusts to NZ$644m or NZ$6.14/share from NZ$665m or NZ$6.34/share previously. The reduction in our valuation primarily stems from our now tempered expectation for operating profits in FY24 partially offset by rolling forward our model. Our DCF valuation is presented in Exhibit 3.

Exhibit 3: AFT DCF model

NZ$'000s

2024e

2025e

2026e

2027e

2028e

2029e

2030e

2031e

2032e

2033e

Revenue

184,008

214,028

230,016

241,517

253,593

266,272

279,586

293,565

308,244

323,656

Growth (%)

17.5%

16.3%

7.5%

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

EBIT

23,482

41,000

51,053

65,713

76,844

86,509

94,407

1,00,199

1,08,130

1,15,233

Margin (%)

12.8%

19.2%

22.2%

27.2%

30.3%

32.5%

33.8%

34.1%

35.1%

35.6%

Tax

(5,825)

(10,784)

(13,598)

(17,703)

(20,820)

(23,526)

(25,738)

(27,359)

(29,580)

(31,569)

Rate (%)

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

28.0%

D&A

1,724

1,724

1,724

1,724

1,724

1,724

1,724

1,724

1,724

1,724

Working capital

(4,599)

(6,308)

(6,866)

(7,036)

(7,036)

(7,036)

(7,036)

(7,036)

(7,036)

(7,036)

Capex

(9,211)

(9,249)

(8,946)

(8,454)

(7,989)

(7,550)

(7,134)

(6,742)

(6,371)

(6,021)

Free cash flow

5,570

16,383

23,366

34,244

42,723

50,122

56,223

60,786

66,867

72,331

Value (NZ$m)

Value/share

(NZ$)

DCF for forecast period (2024 to 2033)

227.5

2.17

Terminal value

446.1

4.25

Enterprise value

673.6

6.42

Net cash (debt) at end March 2023

(29.9)

(0.29)

Equity value

643.7

6.14

Source: Edison Investment Research

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

Exhibit 4: DCF sensitivity

Terminal EBIT margin

Terminal revenue growth 30%

34%

36%

40%

45%

-2.0%

4.24

4.56

4.72

5.05

5.45

-1.0%

4.45

4.81

4.98

5.33

5.77

0.0%

4.71

5.10

5.29

5.68

6.16

1.0%

5.02

5.45

5.67

6.10

6.63

2.0%

5.41

5.90

6.14

6.62

7.22

3.0%

5.92

6.47

6.74

7.30

7.98

4.0%

6.59

7.23

7.55

8.19

9.00

5.0%

7.52

8.29

8.68

9.45

10.41

Source: Edison Investment Research

Exhibit 5: Financial summary

NZ$000

2022

2023

2024e

2025e

March

NZGAAP

NZGAAP

NZGAAP

NZGAAP

PROFIT & LOSS

Revenue

 

 

130,314

156,641

184,008

214,028

Cost of Sales

(68,539)

(83,658)

(97,072)

(106,413)

Gross Profit

61,775

72,983

86,936

107,615

EBITDA

 

 

21,433

21,393

25,206

42,724

Operating Profit (before amort. and excepts.)

 

 

20,649

20,585

24,398

41,916

Intangible Amortisation

(260)

(916)

(916)

(916)

Exceptionals

0

0

0

0

Other

0

0

0

0

Operating Profit

20,389

19,669

23,482

41,000

Net Interest

(1,704)

(3,870)

(2,677)

(2,487)

Profit Before Tax (norm)

 

 

18,945

16,715

21,721

39,429

Profit Before Tax (reported)

 

 

18,685

15,799

20,805

38,513

Tax

1,163

(5,145)

(5,825)

(10,784)

Profit After Tax (norm)

20,108

11,570

15,896

28,645

Profit After Tax (reported)

19,848

10,654

14,980

27,729

Average Number of Shares Outstanding (m)

104.7

104.8

104.9

104.9

EPS - normalised (c)

 

 

19.2

11.0

15.2

27.3

EPS - (reported) (NZ$)

 

 

0.19

0.10

0.14

0.26

Dividend per share (c)

0.00

1.10

1.43

2.64

Gross Margin (%)

47.4

46.6

47.2

50.3

EBITDA Margin (%)

16.4

13.7

13.7

20.0

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

15.8

13.1

13.3

19.6

BALANCE SHEET

Fixed Assets

 

 

44,218

53,463

60,950

68,476

Intangible Assets

38,093

45,627

53,045

60,462

Tangible Assets

484

450

520

627

Investments

5,641

7,386

7,386

7,386

Current Assets

 

 

77,542

94,600

103,692

126,301

Stocks

33,500

42,397

44,517

48,969

Debtors

36,002

46,718

54,408

60,168

Cash

7,940

4,749

4,031

16,429

Other

100

736

736

736

Current Liabilities

 

 

(29,050)

(39,775)

(42,528)

(46,431)

Creditors

(23,845)

(36,376)

(41,587)

(45,490)

Short term borrowings

(4,000)

(2,458)

0

0

Other

(1,205)

(941)

(941)

(941)

Long Term Liabilities

 

 

(35,966)

(35,020)

(35,020)

(35,020)

Long term borrowings

(33,200)

(32,200)

(32,200)

(32,200)

Other long term liabilities

(2,766)

(2,820)

(2,820)

(2,820)

Net Assets

 

 

56,744

73,268

87,094

113,326

CASH FLOW

Operating Cash Flow

 

 

12,289

10,340

17,930

33,929

Net Interest

2,084

2,625

2,677

2,487

Tax

(221)

(1,336)

(5,825)

(10,784)

Capex

(5,585)

(9,177)

(9,211)

(9,249)

Acquisitions/disposals

0

0

0

0

Financing

295

475

(2,677)

(2,487)

Dividends

0

0

(1,154)

(1,498)

Net Cash Flow

8,862

2,927

1,740

12,398

Opening net debt/(cash)

 

 

35,152

29,260

29,909

28,169

HP finance leases initiated

0

0

0

0

Other

(2,970)

(3,576)

(0)

0

Closing net debt/(cash)

 

 

29,260

29,909

28,169

15,771

Source: Company report, Edison Investment Research


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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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