Sharenet Sites 
Sharenet Sites
ASPEN HEALTHCARE HOLDINGS LIMITED ("ASPEN")
(REGISTRATION NUMBER 85/02935/06)
INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 1999
HIGHLIGHTS
- HEADLINE EARNINGS PER SHARE UP BY 87%
- CASH FLOW GENERATED FROM OPERATIONS: R171 MILLION
GROUP INCOME STATEMENT
AUDITED UNAUDITED UNAUDITED
YEAR SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
30 JUNE 31 DECEMBER 31 DECEMBER %
1999 1999 1998 CHANGE
R'000 R'000 R'000
522 406 TURNOVER 625 151 64 623 867
83 853 OPERATING INCOME 125 375 17 191 629
(17 343) NET INTEREST (PAID)/RECEIVED (56 169) 1 880
66 510 NET INCOME BEFORE TAXATION 69 206 19 071 263
(11 514) TAXATION (15 514) (205)
EARNINGS ATTRIBUTABLE
54 996 TO ORDINARY SHAREHOLDERS 53 692 18 866 185
WEIGHTED AVERAGE NUMBER OF
285 778 SHARES IN ISSUE (000'S) 367 312 244 343
19,2 EARNINGS PER SHARE (CENTS) 14,6 7,7 89
19,1 HEADLINE EARNINGS PER SHARE
(CENTS) 14,4 7,7 87
RECONCILIATION OF HEADLINE
EARNINGS
EARNINGS ATTRIBUTABLE TO
54 996 ORDINARY SHAREHOLDERS 53 692 18 866
(396) PROFIT ON SALE OF FIXED
ASSETS (797) -
54 600 HEADLINE EARNINGS 52 895 18 866
GROUP BALANCE SHEET
AUDITED UNAUDITED UNAUDITED
30 JUNE 31 DECEMBER 31 DECEMBER
1999 1999 1998
R'000 R'000 R'000
CAPITAL EMPLOYED
164 908 ORDINARY SHAREHOLDERS' INTEREST 209 500 45 282
370 081 LONG-TERM INTEREST-BEARING DEBT 509 714 20 000
(212 587) DEFERRED TAXATION (213 900) -
322 402 505 314 65 282
EMPLOYMENT OF CAPITAL
265 440 TANGIBLE FIXED ASSETS 244 504 1 632
397 181 GOODWILL 136 783 -
20 000 LONG-TERM INTEREST-BEARING LOAN 20 000 20 000
640 241 CURRENT ASSETS 534 324 74 203
238 089 INVENTORIES 192 036 21 677
286 149 ACCOUNTS RECEIVABLE 224 720 36 948
116 003 BANK BALANCES AND CASH 117 568 15 578
1 322 862 TOTAL ASSETS 935 611 95 835
1 000 460 CURRENT LIABILITIES 430 297 30 553
484 512 ACCOUNTS PAYABLE AND PROVISIONS 325 012 20 031
515 948 SHORT-TERM INTEREST-BEARING DEBT 105 285 10 522
322 402 505 314 65 282
367 312 NUMBER OF SHARES IN ISSUE (000'S) 367 312 244 343
44,9 NET ASSET VALUE PER SHARE (CENTS) 57,0 18,5
STATEMENT OF CHANGES IN GROUP EQUITY
AUDITED UNAUDITED UNAUDITED
YEAR SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
30 JUNE 31 DECEMBER 31 DECEMBER
1999 1999 1998
R'000 R'000 R'000
20 836 BALANCE AT START OF PERIOD 164 908 20 836
705 211 ISSUE OF SHARE CAPITAL - 96 131
(850 526) INTANGIBLE ASSETS WRITTEN OFF (4 560) (90 551)
(6 609) CURRENCY TRANSLATION DIFFERENCES (4 540) -
54 996 ATTRIBUTABLE EARNINGS 53 692 18 866
241 000 DEFERRED TAX ASSET RECOGNISED - -
164 908 BALANCE AT END OF PERIOD 209 500 45 282
GROUP CASH FLOW STATEMENT
AUDITED UNAUDITED UNAUDITED
YEAR SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
30 JUNE 31 DECEMBER 31 DECEMBER
1999 1999 1998
R'000 R'000 R'000
96 435 CASH OPERATING PROFIT 137 503 17 433
56 356 MOVEMENT IN WORKING CAPITAL 33 645 (8 811)
152 791 CASH GENERATED FROM OPERATIONS 171 148 8 622
(17 343) NET INTEREST (PAID)/RECEIVED (56 169) 1 880
(10 808) TAXATION PAID (13 484) -
124 640 CASH AVAILABLE FROM OPERATIONS 101 495 10 502
(14 500) DIVIDENDS PAID - -
NET CASH INFLOW FROM OPERATING
110 140 ACTIVITIES 101 495 10 502
BALANCE OF ACQUISITION
- CONSIDERATION PAID (122 588) -
NET CASH INFLOW/(OUTFLOW) FROM
(1 729 670)INVESTING ACTIVITIES 300 262 (119 186)
NET CASH (OUTFLOW)/INFLOW FROM
1 569 324 FINANCING ACTIVITIES (271 030) 101 809
(50 206) MOVEMENT IN NET CASH RESOURCES 8 139 (6 875)
NET CASH RESOURCES AT
3 852 BEGINNING OF THE YEAR 116 003 3 853
NET CASH RESOURCES OF SUBSIDIARIES
AND BUSINESSES ACQUIRED
162 357 AND DISPOSED (6 574) 18 600
116 003 NET CASH RESOURCES AT END OF THE YEAR 117 568 15 578
SUPPLEMENTARY INFORMATION
AUDITED UNAUDITED UNAUDITED
YEAR SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
30 JUNE 31 DECEMBER 31 DECEMBER
1999 1999 1998
R'000 R'000 R'000
CAPITAL EXPENDITURE:
41 344 INCURRED 17 738 399
8 700 CONTRACTED 3 905 -
15 412 AUTHORISED NOT CONTRACTED 2 798 -
13 147 DEPRECIATION 19 136 242
INTEREST
15 244 INTEREST RECEIVED 8 173 3 519
(32 587) INTEREST PAID (64 342) (1 639)
(17 343) NET INTEREST (PAID)/RECEIVED (56 169) 1 880
OPERATING LEASE COMMITMENTS: PROPERTY
8 613 - PAYABLE IN ONE YEAR 8 142 1 130
42 965 - PAYABLE THEREAFTER 49 377 1 407
INTEREST-BEARING LIABILITIES
370 081 LONG-TERM 509 714 20 000
515 948 SHORT-TERM 105 285 10 522
886 029 614 999 30 522
COMMENTARY
FINANCIAL
THE NATURE AND SIZE OF THE ASPEN GROUP HAS CHANGED SIGNIFICANTLY OVER THE
TWELVE MONTHS SINCE THE PREVIOUS INTERIM RESULTS WERE REPORTED, LARGELY AS A
CONSEQUENCE OF THE ACQUISITION OF THE SA DRUGGISTS PHARMACEUTICAL BUSINESSES
WITH EFFECT FROM 1 MARCH 1999. STRONG ORGANIC GROWTH ACROSS THE DOMESTIC
BUSINESS AND THE IMPACT OF THE SA DRUGGISTS TRANSACTION HAVE RESULTED IN THE
FOLLOWING SUBSTANTIAL GAINS IN KEY PERFORMANCE MEASURES OVER THE FIRST SIX
MONTHS OF THE TRADING YEAR:
- TURNOVER UP 867% TO R625,2 MILLION
- OPERATING INCOME UP 629% TO R125,4 MILLION
- ATTRIBUTABLE EARNINGS UP 185% TO R53,7 MILLION
- HEADLINE EARNINGS PER SHARE UP 87% TO 14,4 CENTS
THE RESULTS ACHIEVED ARE SLIGHTLY IN ADVANCE OF MANAGEMENT TARGETS FOR THE
FIRST HALF OF THE FINANCIAL YEAR AND REFLECT THE SUCCESSFUL IMPLEMENTATION OF
NEW STRATEGIES FOR THE ENLARGED GROUP.
DOMESTIC OPERATIONS
MANAGEMENT IS SATISFIED WITH THE PROGRESS THAT HAS BEEN ACHIEVED OVER THE LAST
SIX MONTHS IN THE INTEGRATION OF THE ACQUIRED BUSINESSES INTO THE ASPEN GROUP.
SIGNIFICANT MILESTONES OVER THE PERIOD INCLUDE THE FOLLOWING:
- IMPLEMENTATION OF CONSISTENT GROUP-WIDE TRADING POLICIES WITH EFFECT FROM
AUGUST 1999.
- STANDARDISATION AND INTEGRATION OF IT SYSTEMS WITH EFFECT FROM NOVEMBER 1999.
- RATIONALISATION AND REFOCUSING OF SALES FORCES WITH EFFECT FROM DECEMBER 1999
IN ADDITION, THE RE-ENGINEERING OF GROUP MANUFACTURING FACILITIES WITH THE
OBJECTIVE OF ADDRESSING OVER-CAPACITY IS PROGRESSING WELL. SUBSEQUENT TO 31
DECEMBER 1999, THE PHASED CLOSURE OF THE CLAYVILLE MANUFACTURING FACILITY
COMMENCED AND IS EXPECTED TO BE COMPLETED DURING THE SECOND PART OF CALENDAR
2000. PRODUCTION FROM THE CLAYVILLE FACILITY WILL BE ABSORBED INTO THE PORT
ELIZABETH AND EAST LONDON PRODUCTION SITES, ENHANCING THE COST EFFECTIVENESS OF
THOSE LOCATIONS. THIS IS IN LINE WITH THE GROUP'S OBJECTIVE OF ESTABLISHING
ITSELF AS A GLOBALLY COMPETITIVE LOW COST PHARMACEUTICAL MANUFACTURER. ONGOING
BENEFIT FROM THIS RE-ENGINEERING PROCESS IS EXPECTED TO FLOW THROUGH OVER THE
NEXT EIGHTEEN MONTHS.
INTERNATIONAL OPERATIONS
LAGAP, THE UK GENERICS OPERATOR, WAS DISPOSED OF IN OCTOBER 1999 FOR A CASH
CONSIDERATION OF R310 MILLION. INTEREST AMONGST POTENTIAL INVESTORS IN THE
PHARMATEC-CAPRICORN SPECIALIST TECHNOLOGY BUSINESSES REMAINS STRONG. POSITIVE
STEPS TAKEN IN REDIRECTING PHARMATEC HAVE SEEN THIS BUSINESS TURN TO PROFIT IN
THE SIX MONTHS TO DECEMBER 1999.
GEARING
THE BOARD IS SATISFIED WITH THE PROGRESS MADE IN REDUCING INTEREST-BEARING
DEBT. THE PERIOD HAS SEEN NET REDUCTIONS IN INTEREST-BEARING DEBT BY R271
MILLION AND IN OTHER CURRENT LIABILITIES BY R160 MILLION. FURTHER SUBSTANTIAL
REDUCTIONS IN INTEREST-BEARING DEBT ARE ANTICIPATED BY 30 JUNE 2000. THE
REALISATION OF VALUE FROM NON-CORE ASSETS REMAINS A KEY ASPECT OF THE DEBT
REDUCTION PROGRAMME. DISCUSSIONS HAVE REACHED AN ADVANCED STAGE ON THE DISPOSAL
OF THE INFANT NUTRITIONAL ASSETS, COMPRISING THE MANUFACTURING FACILITY AND THE
INFACARE TRADEMARK. IT IS ANTICIPATED THAT THE POSITIVE CASH FLOWS FROM THE
RECENTLY ANNOUNCED AMERICAN HOME PRODUCTS TRANSACTION WILL AMOUNT TO R75
MILLION IN THE SECOND HALF OF THE FINANCIAL YEAR. FURTHERMORE, OPERATIONAL CASH
FLOWS ARE STRONG AND HAVE GENERATED R171 MILLION IN CASH OVER THE FIRST SIX
MONTHS. AT CURRENT RATES, INTEREST IS COVERED APPROXIMATELY FOUR TIMES BY
OPERATING INCOME. THE PRINCIPAL DEBT FACILITY HAS BEEN RENEGOTIATED AND IS NOW
REPAYABLE OVER A THREE-YEAR PERIOD.
PROSPECTS
MANAGEMENT IS CONFIDENT THAT TARGETS FOR THE YEAR WILL BE ACHIEVED. ASPEN'S
MARKET LEADERSHIP POSITION IN GENERICS MEANS THAT THE BUSINESS IS WELL
POSITIONED TO TAKE ADVANTAGE OF CHANGING CIRCUMSTANCES IN THE SOUTH AFRICAN
HEALTHCARE SECTOR. THE GROUP IS ALSO WELL POSITIONED TO BROADEN ITS INFLUENCE
IN OTHER AREAS OF THE PHARMACEUTICAL MARKET. RECENT AGREEMENTS WITH
MULTI-NATIONAL COMPANIES ASTRAZENECA AND ELI LILLY WILL PROVIDE ASPEN WITH AN
INCREASED PRESENCE IN THE ETHICAL SECTOR. THE ACQUISITION OF THE PHYTO-MEDICINE
MODUCARE REPRESENTS A FURTHER STRENGTHENING OF ASPEN'S POSITION IN THE OTC
MARKET. PROSPECTS FOR THE FINANCIAL YEAR ENDING 30 JUNE 2000 ARE POSITIVE,
GIVEN INDICATORS FOR STRONG ORGANIC GROWTH AND FURTHER BENEFITS TO FLOW FROM
THE INTEGRATION PROCESSES WITHIN THE GROUP.
CHANGE OF NAME
THE CHANGE OF NAME OF THE GROUP HOLDING COMPANY TO ASPEN PHARMACARE HOLDINGS
LIMITED WAS APPROVED AT A MEETING OF SHAREHOLDERS ON 16 FEBRUARY 2000. THE NAME
HAS BEEN CHANGED IN ORDER TO BRING THE NAME OF THE EXISTING ASPEN GROUP INTO
LINE WITH THE NATURE OF THE INTEGRATED BUSINESS OPERATIONS OF THE ASPEN GROUP.
DIRECTORS' STATEMENT
THE ACCOUNTING POLICIES IN RESPECT OF THE FINANCIAL YEAR ENDED 30 JUNE 1999,
HAVE BEEN CONSISTENTLY APPLIED TO THE RESULTS FOR THE SIX MONTHS ENDED 31
DECEMBER 1999.
DIVIDENDS
IN LINE WITH THE GROUP'S DEBT REDUCTION PROGRAMME, NO INTERIM ORDINARY DIVIDEND
HAS BEEN DECLARED.
BY ORDER OF THE BOARD
A J AARON S BSAAD
(CHAIRMAN) (JOINT CHIEF EXECUTIVE)
HSHAPIRO
(COMPANY SECRETARY)
JOHANNESBURG
16 FEBRUARY 2000
TRANSFER SECRETARIES:
MERCANTILE REGISTRARS LIMITED
(REGISTRATION NUMBER 87/03382/06)
10TH FLOOR, 11 DIAGONAL STREET, JOHANNESBURG, 2000
(PO BOX 1053, JOHANNESBURG, 2000)
