AFT Pharmaceuticals — Softer H1 on one-offs; recovery expected in H2

AFT Pharmaceuticals (NZX: AFT)

Last close As at 03/12/2024

NZD2.81

−0.04 (−1.40%)

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NZD295m

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Research: Healthcare

AFT Pharmaceuticals — Softer H1 on one-offs; recovery expected in H2

AFT Pharmaceuticals reported H125 revenues of NZ$86.7m, a 3.7% y-o-y increase, albeit lower than expected due to one-off factors such as inventory rationalisation by certain international customers and a prolonged doctors’ strike in South Korea (combined sales of NZ$10m vs NZ$18.2m in H124). These factors, along with continued R&D and marketing efforts, weighed on profits, with AFT reporting an operating loss of NZ$1.8m in H125 (profit of NZ$3.3m in H124). The strong domestic Australia and New Zealand (ANZ) market performance provided a positive offset, with 17.4% y-o-y revenue growth to NZ$76.7m and improved operating profitability. Management expects a recovery in H2 but has lowered full-year operating profit guidance to NZ$15–20m (from NZ$22–25m previously) to reflect the H1 impact. The longer-term target is to achieve NZ$300m in sales by end-FY27, driven by expansion efforts. Factoring in the new FY25 guidance, we have lowered our valuation to NZ$697.4m or NZ$6.65/share (from NZ$725.5m or NZ$6.92/share).

Jyoti Prakash

Written by

Jyoti Prakash

Analyst, Healthcare

Healthcare

AFT Pharmaceuticals

Softer H1 on one-offs; recovery expected in H2

H125 results

Pharma and biotech

29 November 2024

Price

NZ$2.91

Market cap

NZ$305m

NZ$0.61/US$

Net debt (NZ$m) at 30 September 2024

18.9

Shares in issue

104.9m

Free float

25.5%

Code

AFT

Primary exchange

NZX

Secondary exchange

ASX

Share price performance

%

1m

3m

12m

Abs

(14.0)

(15.3)

(14.6)

Rel (local)

(15.8)

(18.1)

(24.1)

52-week high/low

NZ$3.84

NZ$2.40

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

China Crystaderm launch

end-CY24

Maxigesic Rapid US launch

end-CY24

FY25 results

May 2025

Analysts

Jyoti Prakash, CFA

+44 (0)20 3077 5700

Dr Arron Aatkar

+44 (0)20 3077 5700

AFT Pharmaceuticals is a research client of Edison Investment Research Limited

AFT Pharmaceuticals reported H125 revenues of NZ$86.7m, a 3.7% y-o-y increase, albeit lower than expected due to one-off factors such as inventory rationalisation by certain international customers and a prolonged doctors’ strike in South Korea (combined sales of NZ$10m vs NZ$18.2m in H124). These factors, along with continued R&D and marketing efforts, weighed on profits, with AFT reporting an operating loss of NZ$1.8m in H125 (profit of NZ$3.3m in H124). The strong domestic Australia and New Zealand (ANZ) market performance provided a positive offset, with 17.4% y-o-y revenue growth to NZ$76.7m and improved operating profitability. Management expects a recovery in H2 but has lowered full-year operating profit guidance to NZ$15–20m (from NZ$22–25m previously) to reflect the H1 impact. The longer-term target is to achieve NZ$300m in sales by end-FY27, driven by expansion efforts. Factoring in the new FY25 guidance, we have lowered our valuation to NZ$697.4m or NZ$6.65/share (from NZ$725.5m or NZ$6.92/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

26.4

0.4

03/24

195.4

23.0

15.8

1.60

18.4

0.5

03/25e

219.0

16.9

11.9

1.19

24.5

0.4

03/26e

261.2

31.7

22.0

2.20

13.2

0.8

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

H1 affected by temporary sales disruptions

The NZ$1.8m operating loss was AFT’s first in over five years, although given the temporary nature of the disruptions and a traditionally stronger H2, we anticipate a sharp recovery in H2. We take encouragement from the strong ANZ performance (88.5% of sales) and expect momentum to continue into H2, driven in particular by the over-the-counter (OTC) and prescriptions channels. The revised operating profit guidance of NZ$15–20m entails strong recovery from international markets and AFT has guided for FY25 sales from Asia to be higher than FY24, although international (RoW) product sales are expected to be in line with or marginally lower than FY24.

Broad-based growth to support NZ$300m target

After achieving its rolling NZ$200m sales target, AFT now aims to hit NZ$300m by end-FY27, backed by a combination of domestic and international growth. While the planned new product launches (60 over two years) should support domestic sales momentum, we expect increased throughput to come from international markets, particularly the top two pharma markets globally, the US and China, where AFT has recently made forays. We expect the planned entry into the Japanese market to support longer-term growth.

Valuation: NZ$697.4m or NZ$6.65/share

We pare our near-term sales and operating profit estimates to reflect the H125 performance, the revised operating profit guidance for FY25 and the latest net debt figure (NZ$18.9m vs NZ$16.2m at end-FY24). Our valuation adjusts to NZ$697.4m or NZ$6.65/share, from NZ$725.5m or NZ$6.92/share previously.

H125 performance: A mixed bag

H125 (the six months ending 30 September 2024) saw AFT post another period of year-on-year growth in revenues, although the performance was tempered by one-off disruptions in international markets. Total revenues were reported at NZ$86.7m, 3.7% y-o-y growth over the H124 figure of NZ$83.6m. Excluding licensing income (NZ$0.2m in H125; NZ$2.0m in H124), year-on-year growth was 6% (from product sales and royalties). Top-line growth was driven by the domestic ANZ market, which registered combined revenues of NZ$76.7m, 17.4% growth y-o-y, and contributed 88.5% of total sales. Revenues from Asia and other international markets amounted to NZ$10.0m, a c 45% y-o-y decline (H124: NZ$18.2m). While revenues from Asia declined by 18.1% to NZ$4.4m (primarily due to the doctors strike in South Korea), the bigger hit came from international markets, which saw sales decline by 56.7% y-o-y to NZ$5.6m (attributed to lower licensing income and stocking rationalisation by several international customers following easing of supply chain issues).

Gross margins from product sales and royalties remained stable at 41.6% while overall gross margin reduced by 1.3pp to 41.7%, due to the lower licensing income during the period. Notwithstanding the temporary headwinds related to international sales, AFT continued to invest in its R&D efforts (71.4% y-o-y increase to NZ$6m in H125; NZ$8.9m if we include capitalised R&D) as well as sales and marketing related to new product launches and geographies (30.8% y-o-y growth to NZ$26.7m), resulting in an operating loss of NZ$1.8m for the period, versus a profit of NZ$3.3m in H124. EBITDA, a key financial metric used by the company, was a loss of NZ$0.7m in H125 versus a profit of NZ$4.1m in H124. The company also recorded a net loss of NZ$2.5m in H125 versus a profit of NZ$1.8m in H124. We note that AFT recorded an income tax benefit of NZ$0.4m in H125 and we believe this is related to approval by the Inland Revenue Department to treat capitalised R&D as deductible for income tax purposes.

Operating cash flow during the period was NZ$4.4m (NZ$7.5m in H124), with the net loss offset by a favourable working capital position (lower inventories and receivables). Furthermore, period-end net debt stood at NZ$18.9m, slightly higher than the end-FY24 figure of NZ$16.2m but materially lower than NZ$30.6m at end-H124.

Domestic markets spearheaded the H125 results

The primary contributor to the H125 operating performance was Australia, which accounted for 58.5% of H125 group revenue, registering solid 18.9% y-o-y growth to NZ$50.8m. The revenue uplift was supported by growth across all distribution channels, in particular OTC, which made up 66.8% of the segmental revenues and grew 16.1% y-o-y, driven by growth in the eyecare, pain relief and iron supplements categories. The hospitals channel (25.4% of segment sales) also grew strongly, 27.9% y-o-y, led by sales of injectables. The prescriptions channel (7.8% of segment sales) grew 14.5% y-o-y, with broad-based growth across the product range. Top-line growth as well as the prior year’s investment in sales and distribution reflected in operating profits, which rose to NZ$4.0m (H124: NZ$0.5m), translating to an operating margin of 7.8%. Management has communicated that the bulk of the growth was driven by existing products, but we expect incremental contribution from new product launches in the coming periods. We note that AFT plans to launch around 60 new products over the next two years and we expect this to help sustain the strong growth momentum in the long term from the segment.

New Zealand also posted a strong revenue uplift of 14.5% y-o-y (to NZ$26.0m), supported by growth across the OTC and prescription distribution channels as well as product launches in FY24. The OTC channel, which accounts for 54.4% of the segment’s sales, had the highest growth, increasing c 20% y-o-y, with strong demand for eyecare and dermatology products. The prescription channel (32% of segment sales) also recorded solid sales growth of 13.4%, while the hospital channel was down 1.4%. Operating profit, excluding group head office costs, improved to NZ$3.7m, from NZ$2.6m in H124, translating to a healthy operating margin of 14.2%. Including head office-related expenses, the segment reported an operating loss of NZ$1.6m versus NZ$2.0m in H124.

International market performance tempered by one-offs

Unlike previous periods that saw strong sales uplift from Asia and other international markets, H125 was softer, with temporary sales disruptions across both segments. Revenue from Asia (5.1% of H125 group revenue) declined 18.1% y-o-y to NZ$4.4m. Management attributes this to the prolonged doctors strike in South Korea (which began in February 2024), a key market for AFT and where Maxigesic IV has seen significant traction. Unlike the domestic markets, sales in Asia are primarily generated by the hospital channel (61.7% of segment sales), which declined by 31.3%, attributed to the strike. However, we note that there has been a shift in the channel mix in Asia, with a significantly increased contribution from the OTC channel (34.5% of segment sales versus 18.6% in H124). We understand that this was partially driven by the growth in the online e-commerce channel into China (a key market for AFT). With the approval of its Crystaderm antiseptic cream in November 2023 by the National Medical Products Administration and the subsequent distribution agreement with Hainan Haiyao Co in July 2024, we expect increasing sales from the prescription and hospital segments following the launch, planned for end-CY24. Operating profit declined to NZ$0.5m (from NZ$1.6m in H124; margin declined to 11.2% from 29.9% in H124), reflecting the lower sales as well as increased spending on marketing and business development activities. We note that AFT has invested heavily in developing business hubs globally, including Singapore and Hong Kong to tap the Asian market. For FY25, management has guided for sales in Asia to be 25–30% higher than the previous year, which implies a strong recovery in H2.

The international segment (ex-Asia) was the worst performing segment during the period, with revenues falling by 56.7% y-o-y. Product sales and royalties declined by 50.4% to NZ$5.4m as several international customers reduced inventories, as supply chain restrictions eased. Encouragingly, in-market sales have not been affected and management has highlighted a strong forward order book, which means disruptions should be temporary with sales recovery expected in H2. Nonetheless, given the decline in H1, we expect full-year sales from international markets to lag the FY24 figure. Profitability for the segment was also significantly affected (operating loss of NZ$4.6m versus a profit of NZ$3.1m in H124) with increased investment in developing business hubs in the UK, the US, Canada and South Africa as well as greater R&D spend.

Product/market expansion is key to meeting the FY27 sales target

With the H125 results management also communicated its strategic focus on achieving a rolling annual revenue target of NZ$300m by the end of FY27. While this target is ambitious, we believe the company has laid the groundwork to achieve it, with significant investments made in new product launches and growing its international presence. With a portfolio of c 150 products and dose formats available in the domestic markets and another 60 product launches planned over the next two years, management expects sustained high-teens and double-digit growth from Australia and New Zealand, respectively, over the next few years. We therefore believe these markets will make a material contribution to meeting the sales target.

Alongside domestic market growth, we expect the execution of future growth plans to be underpinned by the company’s international efforts. While we believe that Maxigesic (across all dose formats) will continue to spearhead international growth efforts (currently available in 77 countries, up from 73 at the end of FY24) we note the increasing impetus by the company to develop and market a broader portfolio of products in international markets. As mentioned previously, AFT has also been investing heavily in developing business hubs internationally to gain greater control and oversight on distribution across select geographies. In the UK, while Maxigesic/Combogesic tablets have been launched through pharmacies and online channels, the company is working on getting the IV formulation included in the formulary list, along with growing its product pipeline in the country. AFT has also received approval as an accredited NHS supplier, winning its first contract for hospital injectable medicines, with sales to commence from early 2025. The company also expects first sales in H225 from its European subsidiary (AFT Pharm Europe), which earlier this year acquired six product licences for niche IV drugs from an insolvent German firm and EU rights for another IV drug (which was discontinued by a large pharma company). AFT has also launched Combogesic tablets in Canada through a partner and is expected to launch Crystaderm in FY25 as well as Combogesic IV, alongside other OTC products. Product launches are also planned in South Africa, Singapore and Hong Kong through the dedicated subsidiaries.

While we expect growing sales traction from these markets, we maintain that the US will be the key driver for AFT’s international growth efforts, given that it accounts for c 50% of the global pharma market. Combogesic IV was launched in the US by distribution partner Hikma in February 2024 and received a reimbursement code (J-code) from the Centers for Medicare and Medicaid Services, effective October 2024, which we expect should result in increased sales momentum from FY26. Hikma also expanded its partnership with AFT in August 2024 to include the distribution of the rapid release tablets in the same hospital and ambulatory setting. The tablet formulation was approved by the FDA in March 2023 and the first distribution partnership was finalised with Alexso in June 2024. The company expects to launch the tablets before by year-end 2024, alongside several other OTC products.

Another major market opportunity for AFT will be China, which is the second-largest global pharma market after the US. As noted previously, AFT’s topical antiseptic cream, Crystaderm, is set to launch in China before end-CY24 through partner Hainan Haiyao Co. While the company already has an e-commerce presence in the country, this launch would provide it access to China’s offline retail and hospital segments, which make up the majority of the market. Management also highlighted that a further four distribution agreements have subsequently been signed with Hainan Haiyao Co for Vitamin C LipoSachets, Vitamin D LipoSachets, Ferro LipoSachets and Kiwisoothe tablets, with sales expected from FY26. In September 2024, AFT signed an exclusive license agreement for Maxigesic IV in China with Xizang Weixinkang Pharmaceutical, a listed hospitals injectables focused company. The deal terms include an upfront payment of US$300k along with development and sales-related milestones and royalty payments, to be split 65:35 between AFT and partner Hyloris.

We note that AFT now has distribution in place for Maxigesic IV in nine of the top 10 pharma markets globally (the US, China, Germany, France, Italy, the UK, Canada, Spain and Brazil). During the conference call, management communicated its plans to enter the remaining top 10 market, Japan. We understand that AFT has recently completed a pharmacokinetic study for Maxigesic IV in Japan and is in conversations with potential distribution partners to launch its products in this key market.

Exhibit 1: H125 results by region

NZ$000

Revenue

Operating profit before tax

H125

H124

% change

H125

H124

% change

Australia

50,762

42,704

18.9%

3,978

549

624.6%

New Zealand*

25,965

22,677

14.5%

(1,640)

(2,013)

18.5%

Asia

4,435

5,416

(18.1)%

496

1,621

(69.4)%

International/RoW

5,551

12,817

(56.7)%

(4,637)

3,094

(249.9)%

Source: AFT Pharmaceuticals. Note:* Operating profit (loss) attributed to New Zealand includes head office costs

R&D portfolio strengthened with recent additions

Despite a wide portfolio of marketed products, developing an R&D pipeline remains a key long-term growth driver for AFT, and the company continued to invest in new programmes in H125. Total R&D-related expenses (including capitalised expenses) during the period were NZ$8.9m, up 27.1% y-o-y from NZ$7m in H124. AFT’s pipeline currently includes eight ongoing programmes, spanning dermatology, eyecare and pain relief, among others. In April 2024, AFT announced a partnership with Massey Ventures and the Gillies McIndoe Research Institute to develop a topical treatment for keloid and hypertrophic scars, which result from abnormal wound healing. Currently available treatments are limited to wound care dressings, laser treatments, corticosteroids and surgical excision, indicative of the need for more effective, non-invasive treatments.

The latest entry to the R&D pipeline is a late-stage novel injectable drug, containing an undisclosed. new chemical entity. The profit-sharing agreement was signed with two European partners, and AFT will be responsible for conducting the final Phase III confirmatory trial, with plans to commercialise within three years under an out-licensing agreement. The cost of the trial will be shared equally between AFT and one of the European partners. While details of the drug and target indication have not been made public, management has indicated that the potential market was valued at c US$3bn in 2024. The agreement is conditional on a positive FDA and European Medicines Agency meeting (before 31 March 2025) and we expect further updates in the coming months. Exhibit 2 presents an overview of AFT’s R&D pipeline.

Exhibit 2: AFT’s R&D pipeline

Source: AFT presentation, November 2024

Estimates revision

We have adjusted our estimates (both revenue and expenses) based on AFT’s H125 performance, the revised operating profit guidance for FY25 and improved visibility on the company’s growth plans and outlook. The H124 results were below our expectations and while recovery is anticipated in H2 (due to the reversal of the international sales disruptions; H2 is also a traditionally stronger period for AFT and the H1:H2 sales split has been around 40:60 in the past few years), we forecast the full-year revenues to remain below our previous expectations, reflecting the H1 impact. We now forecast FY25 and FY26 revenues to be NZ$219.0m and NZ$261.2m, respectively (NZ$232.4m and NZ$278.3m previously). In terms of segmental forecasts, we have upgraded our FY25 estimates for New Zealand (NZ$56m from $53.6m previously) and Australia (NZ$129.9m vs NZ$126.6m previously) given the strong H1 performance and the expectation of continued momentum in the second half of the financial year. This has been offset by our lower sales assumptions for Asia (NZ$13.6m vs NZ$16.0m previously) and more so for international markets (NZ$19.5m vs NZ$36.1m previously). We expect the company to achieve its NZ$300m revenue target in FY27, in line with management’s expectation.

Given the sales mix in H125 and the lower expected licencing fee for the full year (NZ$1m for FY25, as per management guidance), we have reduced our FY25 gross margin expectations to 43.6%, from 45% previously. For FY26, we now estimate gross margin of 45% (46.9% previously). FY25 and FY26 operating expense estimates have been reduced (NZ$76.0m and NZ$82.8m, respectively, from NZ$77.9m and NZ$87.1m) to reflect the revised operating profit guidance for FY25 and lower estimated revenues. This results in our reported operating profit estimates revising to NZ$17.5m in FY25 (NZ$24.6m previously) and NZ$32.7m in FY26 (NZ$41.4m previously). This correlates to operating margin of 8% and 12.5% for FY25 and FY26, down from 10.6% and 14.9% previously.

Balance sheet position

AFT closed H125 with a net debt position of NZ$18.9m (NZ$16.2m at end-FY24), which comprised NZ$10.7m in gross cash and NZ$29.6m in debt. The debt is made up of a term loan from the Bank of New Zealand (BNZ), which was renewed in September 2022 into a three-year term loan maturing in April 2026. This loan structure is made up of a NZ$18.2m term loan, NZ$10.0m working capital facility, a NZ$3.0m overdraft facility and a NZ$5.0m business finance scheme loan (maturing in May 2026). While the term loan and working capital components have been utilised, AFT drew down another NZ$1.4m in H125, which we believe may be related to the business finance scheme loan. The company also received NZ$439k in related party financing by minority shareholder of AFT Pharma UK Limited (in which AFT owns a 70% stake) in H125.

Valuation

We use a discounted cash flow (DCF) valuation methodology to value AFT, projecting free cash flows over a 10-year explicit forecast period (FY25–34e) and thereafter ascribe a terminal growth value (assuming 2% ongoing top-line growth rate). We assume a terminal operating profit margin of 34% and use the Edison standard 10% discount rate for commercial-stage healthcare companies.

We have incorporated the recent H125 performance into our model and have made the aforementioned revisions to our forecasts, resulting in our valuation revising to NZ$697.4m or NZ$6.65/share (from NZ$725.5m or NZ$6.92/share previously). We note that AFT continues to expect a dividend payout for FY25, which we reflect in our model (we forecast a 10% dividend payout ratio, in line with previous years).

Exhibit 3: AFT DCF valuation

NZ$'000s

2025e

2026e

2027e

2028e

2029e

2030e

2031e

2032e

2033e

2034e

Revenue

218,965

261,175

300,352

322,878

339,022

355,973

373,772

392,460

412,083

432,688

Growth (%)

12.1%

19.3%

15.0%

7.5%

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

EBIT

17,498

32,679

46,156

61,831

72,333

87,612

100,826

119,388

135,749

144,729

Margin (%)

8.0%

12.5%

15.4%

19.1%

21.3%

24.6%

27.0%

30.4%

32.9%

33.4%

Tax

(4,450)

(8,589)

(12,363)

(16,752)

(19,692)

(23,971)

(27,670)

(32,868)

(37,449)

(39,963)

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

1,721

(6,035)

(6,293)

(6,765)

(6,934)

(6,934)

(6,934)

(6,934)

(6,934)

(6,934)

Capex

(7,708)

(7,733)

(8,004)

(7,744)

(7,318)

(6,915)

(6,535)

(6,175)

(5,836)

(5,515)

Free cash flow

9,074

12,335

21,509

32,583

40,402

51,805

61,699

75,424

87,543

94,329

Value (NZ$m)

Value/share

(NZ$)

DCF for forecast period (2025 to 2034)

251.1

2.39

Terminal value

464.9

4.43

Enterprise value

716.0

6.83

Net cash (debt) at end September 2024

(18.9)

(0.18)

Equity value

697.1

6.65

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%

32%

34%

36%

38%

-2.0%

4.68

4.87

5.06

5.24

5.43

-1.0%

4.94

5.14

5.35

5.55

5.76

0.0%

5.24

5.47

5.69

5.92

6.15

1.0%

5.61

5.86

6.12

6.37

6.63

2.0%

6.07

6.36

6.65

6.94

7.23

3.0%

6.66

6.99

7.33

7.66

8.00

4.0%

7.45

7.84

8.23

8.63

9.02

5.0%

8.55

9.02

9.50

9.98

10.46

Source: Edison Investment Research

Exhibit 5: Financial summary

NZ$000

2023

2024

2025e

2026e

Year end 31 March

NZGAAP

NZGAAP

NZGAAP

NZGAAP

PROFIT & LOSS

Revenue

 

 

156,641

195,411

218,965

261,175

Cost of Sales

(83,658)

(107,139)

(123,471)

(143,732)

Gross Profit

72,983

88,272

95,494

117,444

Operating Expenses

(51,590)

(62,552)

(75,984)

(82,751)

Other Operating Income

-

528

-

-

EBITDA

 

 

21,393

26,248

19,511

34,692

Depreciation

(808)

(1,003)

(1,003)

(1,003)

Operating profit (before amort. and excepts.)

 

 

20,585

25,245

18,508

33,689

Intangible Amortisation

(916)

(1,010)

(1,010)

(1,010)

Exceptionals

-

-

-

-

Other

-

-

-

-

Operating Profit

19,669

24,235

17,498

32,679

Net Interest

(3,870)

(2,216)

(1,606)

(2,003)

Profit Before Tax (norm)

 

 

16,715

23,029

16,902

31,686

Profit Before Tax (reported)

 

 

15,799

22,019

15,892

30,676

Tax

(5,145)

(6,410)

(4,450)

(8,589)

Profit After Tax (norm)

11,570

16,619

12,452

23,097

Profit After Tax (reported)

10,654

15,609

11,442

22,087

Average Number of Shares Outstanding (m)

104.8

104.9

104.9

104.9

EPS - normalised (c)

 

 

11.0

15.8

11.9

22.0

EPS - (reported) (NZ$)

 

 

0.10

0.15

0.11

0.21

Dividend per share (c)

1.10

1.60

1.19

2.20

Gross Margin (%)

46.6

45.2

43.6

45.0

EBITDA Margin (%)

13.7

13.4

8.9

13.3

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

13.1

12.9

8.5

12.9

BALANCE SHEET

Fixed Assets

 

 

53,463

59,530

65,225

70,945

Intangible Assets

45,627

53,459

59,225

64,990

Tangible Assets

3,365

3,821

3,750

3,705

Investments

4,471

2,250

2,250

2,250

Current Assets

 

 

93,142

105,727

112,363

128,931

Stocks

42,397

49,057

53,963

59,359

Debtors

46,718

44,222

43,323

51,333

Cash

3,291

12,040

14,669

17,832

Other

736

408

408

408

Current Liabilities

 

 

(38,317)

(46,068)

(51,796)

(59,167)

Creditors

(36,376)

(42,267)

(47,995)

(55,366)

Short term borrowings

(1,000)

-

-

-

Other

(941)

(3,801)

(3,801)

(3,801)

Long Term Liabilities

 

 

(35,020)

(31,394)

(28,233)

(23,233)

Long term borrowings

(32,200)

(28,200)

(25,039)

(20,039)

Other long term liabilities

(2,820)

(3,194)

(3,194)

(3,194)

Net Assets

 

 

73,268

87,795

97,559

117,477

CASH FLOW

Operating Cash Flow

10,654

15,609

11,442

22,087

Movements in working capital

(6,947)

1,502

1,721

(6,035)

Depreciation and amortisation

1,724

2,013

2,013

2,013

Net Interest

2,625

3,314

2,206

2,003

Taxes

3,742

5,188

-

-

Other adjustments

(169)

1,235

-

-

Cash flow from operating activities

 

 

11,629

28,861

17,382

20,068

Capex

(197)

(116)

(130)

(155)

Acquisitions/disposals

(8,980)

(9,411)

(7,578)

(7,578)

Cash flow from investing activities

 

 

(9,177)

(9,527)

(7,708)

(7,733)

Financing

475

-

-

-

Dividends

-

(1,154)

(1,678)

(2,169)

Net Borrowings

(4,593)

(5,859)

(3,161)

(5,000)

Other adjustments

(2,860)

(3,620)

(2,206)

(2,003)

Cash flow from financing activities

 

 

(6,978)

(10,633)

(7,045)

(9,172)

Cash and cash equivalents at the beginning of the period

7,940

3,291

12,040

14,669

Increase/(decrease) in cash and equivalents

(4,526)

8,701

2,629

3,163

Effect of FX on cash and equivalents

(123)

48

-

-

Cash and equivalents at end of period

3,291

12,040

14,669

17,832

Closing net debt/(cash)

 

 

29,909

16,160

10,370

2,207

Source: Company reports, 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 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

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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