Wrap Text
Aspen - Reviewed Preliminary Group Financial Results For The Year Ended 30 June
2004 And Renewal Of Cautionary Announcement
Aspen Pharmacare Holdings Limited
("Aspen")
(Registration number 1985/002935/06)
Share code: APN
ISIN: ZAE000023586
REVIEWED PRELIMINARY GROUP FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2004 AND
RENEWAL OF CAUTIONARY ANNOUNCEMENT
- Headline earnings per share: 103,7 cents, up by 31%
- Operating cash flow per share: 140,4 cents, up by 26%
- Dividend per share: 30,0 cents, up by 50%
- Delivering quality healthcare
Group Income Statement
Reviewed Audited
Year ended Year ended
% 30 June 2004 30 June 2003
change R"000 R"000
Revenue 2 201 721 1 900 805
Continuing operations 16 2 201 721 1 890 244
Discontinued operations - 10 561
Cost of sales (1 143 614) (1 039 967)
Gross profit 1 058 107 860 838
Net operating expenses (504 357) (415 038)
Other operating income 4 218 7 586
Selling and distribution
costs (285 886) (246 839)
Administration expenses (149 672) (118 753)
Other operating expenses (73 017) (55 979)
Loss on disposal of
discontinued operations - (1 053)
Operating profit 553 750 445 800
Continuing operations 24 553 750 446 176
Discontinued operations - (376)
Net financing costs (25 286) (56 889)
Net profit before taxation 36 528 464 388 911
Taxation (172 886) (115 501)
Net profit after taxation 30 355 578 273 410
Minority interest - (2 765)
Net profit attributable to
ordinary shareholders 31 355 578 270 645
Weighted average number of
shares in issue (000"s) 356 223 353 079
Earnings per share -
basic (cents) 30 99,8 76,7
Earnings per share -
diluted (cents) 30 97,2 74,8
Headline earnings
per share (cents) 31 103,7 79,1
Headline earnings per share -
diluted (cents) 31 101,0 77,1
Dividend per share (cents)* 50 30,0 20,0
Reconciliation of headline
earnings
Net profit attributable to
ordinary shareholders 355 578 270 645
Adjusted for:
- Amortisation of goodwill 13 774 8 074
- Loss on disposal of
discontinued operations
(net of taxation) - 1 053
- Profit on disposal of
property, plant and equipment
(net of taxation) (84) (570)
Headline earnings 369 268 279 202
*Relates to dividend declared after year end. The policy of Aspen is to declare
a final dividend when the preliminary results for each financial year are
released.
Group Balance Sheet
Reviewed Audited
30 June 2004 30 June 2003
R"000 R"000
ASSETS
Non-current assets 972 906 853 727
Property, plant and equipment 313 002 183 188
Investment property 4 572 4 022
Goodwill 86 204 67 478
Intangible assets 437 157 429 931
Receivables 7 466 19 422
Deferred taxation asset 124 505 149 686
Current assets 1 136 741 827 978
Inventories 245 676 213 527
Receivables and prepayments 425 569 414 105
Cash and cash equivalents 465 496 200 346
Total assets 2 109 647 1 681 705
EQUITY AND LIABILITIES
Capital and reserves
Share capital 81 509 67 571
Non-distributable reserves 104 838 153 731
Retained income 948 989 642 116
Treasury shares (75 807) (75 807)
Ordinary shareholders" equity 1 059 529 787 611
Minority interest - 7 364
Non-current liabilities
Interest-bearing borrowings 156 234 144 711
Interest-bearing deferred payables 39 718 81 199
Deferred taxation liability 61 607 42 289
Retirement benefit obligation 10 820 11 155
1 327 908 1 074 329
Current liabilities 781 739 607 376
Trade and other payables 360 379 336 380
Interest-bearing borrowings 289 991 151 498
Interest-bearing deferred payables 55 178 66 120
Taxation 76 191 51 148
Current provisions - 2 230
Total equity and liabilities 2 109 647 1 681 705
Number of shares in issue (net of 18,8 million treasury
shares) (000"s) 358 208 354 646
Net asset value per share (cents) 295,8 222,1
Group Cash Flow Statement
Reviewed Audited
Year ended Year ended
30 June 2004 30 June 2003
R"000 R"000
Cash operating profit 656 358 530 973
Working capital requirements (28 101) (26 542)
Cash generated from operations 628 257 504 431
Net financing costs (25 286) (56 889)
Taxation paid (102 653) (54 127)
Net cash inflow from operating
activities 500 318 393 415
Net cash outflow from investing
activities (282 858) (351 316)
Replacement capital expenditure (27 664) (31 019)
Expansion capital expenditure -
intangible assets (90 632) (196 330)
Expansion capital expenditure -
oral solid dosage facility (130 942) (34 229)
Acquisition of minority interest in
subsidiary company (50 293) (31 669)
Acquisition of subsidiary companies
and businesses, net of cash - (48 321)
Adjustment in respect of subsidiary
company acquired 5 000 -
Disposal of subsidiary companies
and businesses, net of cash - 4 048
Proceeds on disposal of property,
plant and equipment 451 1 374
Realisation of/(investment in)
receivables 11 222 (15 170)
Net cash inflow from financing
activities 49 509 21 010
Proceeds from share issues 13 938 10 026
Increase in long-term interest-bearing
borrowings 15 842 92 186
Increase/(decrease) in short-term
interest-bearing borrowings 140 667 (8 070)
Decrease in long-term interest-bearing
deferred payables (40 238) (38 347)
(Decrease)/increase in short-term
interest-bearing deferred payables (8 813) 6 122
Dividends paid (71 887) (40 907)
Effects of exchange rate changes (1 819) (46 827)
Movement in cash and cash
equivalents 265 150 16 282
Cash and cash equivalents at the
beginning of the year 200 346 184 064
Cash and cash equivalents at the
end of the year 465 496 200 346
Statement of Changes in Group Equity
Share Non-
capital distri-
and butable Retained Treasury
premium reserves income shares Total
R"000 R"000 R"000 R"000 R"000
Balance at
1 July 2002 57 545 228 113 389 569 (75 807) 599 420
Currency
translation
differences - (43 190) - - (43 190)
Net profit for
the year - - 270 645 - 270 645
Dividend declared - - (40 907) - (40 907)
Proportional
release of deferred
taxation asset - (23 156) 23 156 - -
Deferred taxation
asset adjustment - (565) (347) - (912)
Cash flow hedges
realised - (519) - - (519)
Cash flow hedges
recognised - (6 952) - - (6 952)
Issue of share
capital (share
options exercised) 10 026 - - - 10 026
Balance as at
30 June 2003 67 571 153 731 642 116 (75 807) 787 611
Currency
translation
differences - (30 231) - - (30 231)
Foreign currency
reserve realised - (26) 26 - -
Net profit for
the year - - 355 578 - 355 578
Dividend declared - - (71 887) - (71 887)
Proportional
release of
deferred taxation
asset - (23 156) 23 156 - -
Cash flow hedges
realised - 6 952 - - 6 952
Cash flow hedges
recognised - (2 432) - - (2 432)
Issue of share
capital (share
options exercised) 13 938 - - - 13 938
Balance as at
30 June 2004 81 509 104 838 948 989 (75 807) 1 059 529
Segmental analysis
as at June 2004
South Africa
% of % of
2004 total 2003 total
Primary segments:
Geographical (R"000)
Revenue - continuing
operations 1 763 563 80,1 1 486 079 78,6
Revenue - discontinued
operations - 10 561 100,0
1 763 563 80,1 1 496 640 78,7
Operating profit before
amortisation - continuing
operations 548 861 87,6 457 327 91,2
Operating profit before
amortisation - discontinued
operations - (376) 100,0
548 861 87,6 456 951 91,2
Amortisation - Goodwill (1 973) 14,3 (1 551) 19,2
Amortisation - Intangible
assets (35 315) 59,7 (33 833) 73,6
Loss on disposal of
discontinued operations - (1 053) 100,0
Operating profit -
continuing operations 511 573 92,4 420 890 94,3
Operating profit -
discontinued operations - (376) 100,0
511 573 92,4 420 514 94,3
Segmental analysis (continued)
as at June 2004
Australia
% of % of
2004 total 2003 total
Primary segments:
Geographical (R"000)
Revenue - continuing
operations 234 689 10,7 108 953 5,8
Revenue - discontinued
operations - -
234 689 10,7 108 953 5,7
Operating profit before
amortisation - continuing
operations 37 726 6,0 21 070 4,2
Operating profit before
amortisation - discontinued
operations - -
37 726 6,0 21 070 4,2
Amortisation - Goodwill (406) 2,9 (434) 5,4
Amortisation - Intangible
assets (8 938) 15,1 (6 093) 13,3
Loss on disposal of
discontinued operations - -
Operating profit -
continuing operations 28 382 5,1 14 543 3,3
Operating profit -
discontinued operations - -
28 382 5,1 14 543 3,3
Segmental analysis (continued)
as at June 2004
United Kingdom
% of % of
2004 total 2003 total
Primary segments:
Geographical (R"000)
Revenue - continuing
operations 203 469 9,2 295 212 15,6
Revenue - discontinued
operations - -
203 469 9,2 295 212 15,5
Operating profit before
amortisation - continuing
operations 40 058 6,4 22 863 4,6
Operating profit before
amortisation - discontinued
operations - -
40 058 6,4 22 863 4,6
Amortisation - Goodwill (11 395) 82,7 (6 089) 75,4
Amortisation - Intangible
assets (14 868) 25,1 (6 031) 13,1
Loss on disposal of
discontinued operations - -
Operating profit -
continuing operations 13 795 2,5 10 743 2,4
Operating profit -
discontinued operations - -
13 795 2,5 10 743 2,4
Segmental analysis (continued)
as at June 2004
Total
2004 % 2003 %
Primary segments:
Geographical (R"000)
Revenue - continuing
operations 2 201 721 100,0 1 890 244 100,0
Revenue - discontinued
operations - 10 561 100,0
2 201 721 100,0 1 900 805 100,0
Operating profit before
amortisation - continuing
operations 626 645 100,0 501 260 100,0
Operating profit before
amortisation - discontinued
operations - (376) 100,0
626 645 100,0 500 884 100,0
Amortisation - Goodwill (13 774) 100,0 (8 074) 100,0
Amortisation - Intangible
assets (59 121) 100,0 (45 957) 100,0
Loss on disposal of
discontinued operations - (1 053) 100,0
Operating profit -
continuing operations 553 750 100,0 446 176 100,0
Operating profit -
discontinued operations - (376) 100,0
553 750 100,0 445 800 100,0
Segmental analysis (continued)
as at June 2004
Pharmaceutical
% of % of
2004 total 2003 total
Secondary segments:
Business (R"000)
Revenue-continuing
operations 1 623 612 73,7 1 413 944 74,8
Revenue-discontinued
operations - -
1 623 612 73,7 1 413 944 74,4
Operating profit before
amortisation-continuing
operations 512 255 81,7 388 768 77,6
Operating profit before
amortisation-discontinued
operations - -
512 255 81,7 388 768 77,6
Amortisation-Goodwill (12 215) 88,7 (6 523) 80,8
Amortisation-Intangible
assets (52 850) 89,4 (41 162) 89,6
Loss on disposal of
discontinued operations - -
Operating profit -
continuing operations 447 190 80,8 341 083 76,4
Operating profit -
discontinued operations - -
447 190 80,8 341 083 76,4
Segmental analysis (continued)
as at June 2004
Consumer
% of % of
2004 total 2003 total
Secondary segments:
Business (R"000)
Revenue-continuing
operations 578 109 26,3 476 300 25,2
Revenue-discontinued
operations - 10 561 100,0
578 109 26,3 486 861 25,6
Operating profit before
amortisation-continuing
operations 114 390 18,3 112 492 22,4
Operating profit before
amortisation-discontinued
operations - (376) 100,0
114 390 18,3 112 116 22,4
Amortisation-Goodwill (1 559) 11,3 (1 551) 19,2
Amortisation-Intangible
assets (6 270) 10,6 (4 795) 10,4
Loss on disposal of
discontinued operations - (1 053) 100,0
Operating profit -
continuing operations 106 560 19,2 105 093 23,6
Operating profit -
discontinued operations - (376) 100,0
106 560 19,2 104 717 23,6
Segmental analysis (continued)
as at June 2004
Total
2004 % 2003 %
Secondary segments:
Business (R"000)
Revenue-continuing
operations 2 201 721 100,0 1 890 244 100,0
Revenue-discontinued
operations - 10 561 100,0
2 201 721 100,0 1 900 805 100,0
Operating profit before
amortisation-continuing
operations 626 645 100,0 501 260 100,0
Operating profit before
amortisation-discontinued
operations - (376) 100,0
626 645 100,0 500 884 100,0
Amortisation-Goodwill (13 774) 100,0 (8 074) 100,0
Amortisation-Intangible
assets (59 120) 100,0 (45 957) 100,0
Loss on disposal of
discontinued operations - (1 053) 100,0
Operating profit -
continuing operations 553 750 100,0 446 176 100,0
Operating profit -
discontinued operations - (376) 100,0
553 750 100,0 445 800 100,0
Supplementary Information
Reviewed Audited
Year ended Year ended
30 June 2004 30 June 2003
R"000 R"000
Capital expenditure:
Incurred
- oral solid dosage facility 130 942 34 229
- other tangible assets 27 664 31 019
- intangible assets 90 632 196 330
Contracted
- increase in Co-pharma shareholding* - 50 263
- oral solid dosage facility 4 117 96 348
- other 5 980 6 946
Authorised not contracted
- oral solid dosage facility 11 184 20 049
- other 7 461 421
Proceeds on disposal of tangible
assets 451 1 374
*The group acquired an additional 20%
in the shareholding of Co-pharma Limited
for GBP 4,1 million with effect from
1 July 2003, bringing its total
shareholding in this company to 100%.
This amount was funded out of existing
cash resources held offshore with South
African Reserve Bank approval.
Operating profit has been arrived at
after charging:
Depreciation of tangible assets 27 491 27 580
Reversal of other provisions - (17 518)
Amortisation of goodwill - accelerated 2 158 17 518
Amortisation of goodwill - recurring 11 616 8 074
Amortisation of intangible assets 59 120 45 957
Net financing costs:
Interest received 27 123 37 774
Net foreign exchange loss (10 233) (10 494)
Fair value gains on financial
instruments 6 641 217
Interest paid (36 816) (66 727)
Net finance costs on interest-bearing
deferred payables and financial assets (12 001) (17 659)
Net financing costs (25 286) (56 889)
Operating lease commitments:
- payable within one year 8 284 7 879
- payable thereafter 27 191 20 600
35 475 28 479
Finance lease commitments:
- payable within one year 1 215 2 940
- payable thereafter 663 1 514
1 878 4 454
Other commitments:
During the 2003 financial year Aspen
entered into a 12-year agreement with
GlaxoSmithKline ("GSK") to distribute
and market a range of their products.
In terms of this agreement Aspen is
committed to pay the following amounts
to GSK over the remaining period:
- payable within one year 39 547 52 727
- payable thereafter 128 964 161 267
168 511 213 994
Contingent liabilities
There are contingent liabilities in
respect of:
Additional payments in respect of the
Quit worldwide intellectual property
rights 5 679 6 768
Guarantee covering potential rental
default relating to sale of
discontinued operations 5 048 7 520
Guarantee covering loan and other
obligations to third parties 1 750 1 662
In June 2000, a number of pharmaceutical wholesalers lodged a complaint with the
Competition Commission against a number of pharmaceutical manufacturers,
including Pharmacare Limited. In the complaint they alleged that the
manufacturers had engaged in a number of prohibited practices. The
pharmaceutical wholesalers also instigated interim proceedings before the
Competition Tribunal in respect of the matters set out in the complaint. On 18
June 2003, the Competition Tribunal dismissed with costs this application for
interim relief and ruled in favour of the manufacturers. The pharmaceutical
wholesalers have subsequently appealed against this decision. No further
developments have taken place since this appeal. Aspen continues to hold the
view that this action is unlikely to have a material adverse impact on Aspen"s
business in the future.
Tibbett and Britten Africa (Proprietary) Limited have instituted an action
against Pharmacare Limited for a claim of approximately R39 million for
additional distribution fees. This claim has been disputed and is being defended
on the basis of the distribution agreement with Tibbett and Britten. This action
now replaces the claim referred for independent adjudication, which was reported
to shareholders in Aspen"s Annual Financial Statements for the year ended 30
June 2003. Aspen"s advisors continue to hold the view that this claim is
unlikely to have a material adverse impact on Aspen"s business in the future.
Post-balance sheet events
Acquisition by Aspen of Fine Chemicals Corporation (Pty) Limited ("FCC") and
Nutricia (Pty) Limited ("Nutricia").
All conditions precedent relating to the acquisitions of FCC and Nutricia,
including Competition Commission and Exchange Control approvals, have been
fulfilled subsequent to 30 June 2004.
Accordingly, the Aspen Group has acquired with effect from July 2004:
- 100% of the shares of and shareholder claims against FCC for approximately
R275 million of which R250 million has been paid out of existing cash resources.
The balance is due in July 2007.
- 100% of the shares of and shareholder claims against Nutricia for R21,7
million, which has been paid from existing cash resources.
Specific share repurchase.
With effect from 30 July 2004, 21,3 million Aspen shares were acquired by Aspen
from Peu Health (Pty) Limited in terms of a specific share repurchase for a
purchase consideration of R234,3 million (1 100 cents per Aspen share).
2 677 450 ordinary shares have been cancelled and will revert to authorised but
unissued share capital, while 18 622 550 shares have been repurchased by
Pharmacare Limited, a wholly owned subsidiary of Aspen, and will be held as
treasury shares.
All conditions necessary for the completion of the specific share repurchase,
including the passing of the requisite resolutions by shareholders in a general
meeting and the granting of all regulatory approvals have been fulfilled.
The purchase consideration has been paid from existing cash resources.
Basis of Accounting
The consolidated preliminary results have been prepared in accordance with South
African Statements of Generally Accepted Accounting Practice, the listing
requirements of the JSE Securities Exchange South Africa and Schedule 4 of the
South African Companies Act.
These results have been reviewed by Aspen"s auditors, PricewaterhouseCoopers
Inc. Their unqualified review report is available for inspection at the
company"s registered office.
The accounting policies used in the preparation of the financial statements are
consistent with those used in the annual financial statements for the year ended
30 June 2003.
Disclosure of comparatives
Comparative figures have been adjusted to conform with changes in presentation
in the current year, where necessary.
Commentary
GROUP
Aspen has built on the strong showing of the first six months to record
excellent full year results reflected in a 31% growth in headline earnings per
share to 103,7 cents. This performance was based on revenue growth of 16% to R2
202 million and an improvement in operating margins resulting in an increase in
operating profit of 24% to R554 million. Earnings also benefited from a R32
million reduction in financing costs over the prior year due to the Group"s
strong cash generation and good working capital management.
SOUTH AFRICAN OPERATIONS
The past year was marked by deflationary conditions and continuous uncertainty
caused by a changing legislative environment. The strong rand has made South
Africa an attractive destination for importers, raising competition further in
an already competitive market. The strength of the local currency has had some
benefits to Aspen. Approximately half of finished product content is imported.
The resultant lower rand cost of imported raw materials as well as more
effective procurement has reduced the effect of falling selling prices. Revenue
growth of 19% by the South African business in this environment was an
exceptional result.
The Pharmaceutical Division achieved growth of 22% in revenue notwithstanding
that the average selling price of pharmaceutical products marketed in the
private sector fell by 6%. This growth was achieved through increased volumes.
The strong performance was underpinned by the increased contribution of products
launched in the latter part of the previous year. The outstanding performer was
the anti-depressant CiLift, the generic of Cipramal. Strong performances under
co-marketing and distribution agreements with multi-national companies supported
the good showing of this division.
Revenue growth in the Consumer Division was 11%. This included the contribution
of infant nutritionals in the final quarter of the year. Over-the-counter
("OTC") products performed well as last year"s Triomed acquisition achieved its
potential. The capabilities of Aspen"s OTC team were recognised when they were
placed first in the nationwide Campbell Belman Confidence Standing survey. This
survey of retail pharmacies and buying groups assessed the 36 leading OTC
companies in South Africa. Market share of leading brands was improved in a very
competitive fast moving consumer goods market. However, there were reversals in
contribution from the natural products range. The infant nutritional range
licensed from Wyeth which commenced trade in the final quarter did not
contribute to profits due to the high cost of initial imported inventory.
Production volumes during the year were at a record high. The construction of
the oral solid dosage ("OSD") production facility has been completed and is
operational. The inspection of the OSD facility by the South African Medicines
Control Council ("MCC") has taken place. The inspections by the regulatory
authorities of the UK, the USA, Australia and the World Health Organisation are
expected to take place over the next six months. The OSD facility provides much
needed additional capacity for the South African market and the capability to
export to other regulated markets. The prospect of further extension to the
Group"s production capabilities is under consideration.
INTERNATIONAL OPERATIONS
The international operations contributed 20% to Group revenue even though there
was a contraction in revenue from Co-pharma. Earnings before interest, tax and
amortisation ("EBITA") increased by 77% to R78 million despite the stronger
rand.
Aspen Australia has doubled revenue in both its Pharmaceutical and Consumer
Divisions. This has been achieved by a capable management team optimising
opportunities. EBITA of R38 million is up 79% on the prior year.
During April 2004, UK based Aspen Resources acquired two cephalosporin molecules
from multinational Eli Lilly ("Lilly") for R57 million to increase its portfolio
of intellectual property. The products are distributed by Aspen Australia. The
EBITA recorded by Aspen Resources of R32 million represents an encouraging start
to this initiative.
Co-pharma"s performance was significantly weaker than the prior year as an ultra
competitive market, supply problems and the absence of new products combined to
restrict revenue to R203 million (prior year R295 million) and EBITA to R8
million (prior year R22 million). Once the Group has begun manufacturing product
for Co-pharma in the OSD facility, an improvement in Co-pharma"s performance is
expected.
CASH FLOWS AND FINANCE COSTS
Strong cash flows were again evident during the year. Operating cash flow per
share of 140,5 cents substantially exceeded the benchmark headline earnings per
share.
Increased investment in working capital was limited to only R28 million despite
the growth in trading operations. Growth in stock, and particularly debtors was
restricted below the level of business expansion. Negotiated extension of
certain creditor"s terms added to the benefit.
The strong cash flows and the lowering of interest rates led to a net interest
charge of R9,7 million (prior year R28,9 million). A net foreign exchange loss
of R10,2 million (prior year R10,5 million) was incurred as a result of the cost
of forward exchange contracts closing at above the spot rate. Fair value gains
of R6,6 million (prior year R0,2 million) were made on the revaluation of
financial instruments in terms of accounting standard AC 133. Total net
financing costs reduced from R57 million last year to R25 million.
SOCIAL RESPONSIBILITY DISEASES
Aspen recently received the registration by the MCC of the balance of its anti
retroviral ("ARV") product dossiers. Aspen now has registrations for Stavudine,
Didanosine, Nevirapine, Lamivudine, Zidovudine and the Lamivudine-Zidovudine
combination. These generic ARVs will be manufactured at the Group"s Port
Elizabeth production facility. The tablets and capsules will be manufactured in
the OSD facility. Aspen"s generic ARVs allow for the supply of a full triple
combination therapy. The South African government"s first tender for the supply
of ARVs closed on 6 August 2004. Aspen anticipates the results of its submission
shortly. Aspen expects to extend its supply of generic ARVs further afield under
initiatives such as President Bush"s US$15 billion Emergency Plan for AIDS
relief and the Clinton Foundation.
Lilly recognised Aspen"s manufacturing capabilities and its status as a leader
in the fight against infectious diseases in Africa in an agreement announced on
5 February 2004, which provides for the transfer to Aspen by Lilly of global
technology, intellectual property and funding that will enable Aspen to
manufacture essential antibiotics (capreomycin and cycloserine) needed to treat
patients with multi-drug resistant tuberculosis.
BLACK ECONOMIC EMPOWERMENT ("BEE")
Aspen repurchased 21,3 million shares from BEE shareholders, Peu Health (Pty)
Limited ("Peu"), on 30 July 2004, at a price of 1 100 cents per share. The share
buy back was necessitated by Peu"s funding structure being unwound. Aspen has
announced that the shares bought back from Peu may be used to facilitate further
BEE transactions (refer to the renewal of Cautionary Announcement below).
PROSPECTS
The implementation of the single exit pricing legislation has brought greater
certainty to the South African healthcare environment. Legal challenges to
legislation and the future benchmarking of international pharmaceutical prices
may yet bring further change. However, the drive for lower medicine prices will
continue. Aspen is the generic market leader, boasts an exceptional generic
pipeline and has manufacturing facilities capable of producing quality product
at internationally competitive prices. These fundamentals have allowed Aspen to
adapt to the challenges of this changing environment and to emerge well placed
to continue growing in the South African market.
The acquisitions of Fine Chemicals Corporation (Pty) Limited ("FCC") and
Nutricia (Pty) Limited ("Nutricia") were completed after the financial year end.
FCC, the only manufacturer of active pharmaceutical ingredients ("APIs") in
South Africa, presents a unique opportunity to develop the capability to
manufacture the essential APIs for ARVs in South Africa. Aspen has commenced
discussions with prospective technology partners. The acquisition of Nutricia,
renamed Aspen Nutritionals (Pty) Ltd, provides access to an infant milk formula
("IMF") manufacturing facility. The combined volumes of the Infacare brands
acquired from Nutricia and the licensed Wyeth IMF brands will provide the
necessary critical mass to allow for the manufacture of IMFs at competitive
prices.
Further growth in the international operations is anticipated. This is likely to
be led by the realisation of additional opportunities in Australia and the
commencement of exports from the OSD facility in the second half of the year.
DIVIDEND DECLARATION
Taking into account the earnings performance and strong cash flows the directors
have declared a dividend of 30 cents per share for the year ended 30 June 2004,
payable to those shareholders recorded in the register on Friday, 29 October
2004. This represents an increase of 50% over the previous year and is covered
3,33 times (prior year 3,84 times) by earnings per share. In compliance with AC
107 (events after balance sheet date), this dividend will only be accounted for
in the financial statements in the year ending 30 June 2005. It remains the
policy of Aspen to declare a final dividend when the preliminary results for
each financial year are released.
The last day to trade "cum" the dividend in order to participate in the dividend
will be Friday, 22 October 2004. The shares of Aspen will commence trading "ex"
the dividend from the commencement of business on Monday, 25 October 2004 and
the record date will be Friday, 29 October 2004. The dividend will be paid on
Monday, 1 November 2004. Share certificates may not be dematerialised or
rematerialised between Monday, 25 October 2004 and Friday, 29 October 2004, both
days inclusive.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcements dated 6 May 2004 and 24 June 2004,
shareholders are advised that discussions in respect of the proposed BEE
transaction are still in progress which, if successfully concluded, may have a
material effect on the price of Aspen shares. Accordingly, shareholders should
continue exercising caution when dealing in Aspen shares until a further
announcement is made.
By order of the board
SB Saad
(Group Chief Executive)
MG Attridge
(Deputy Group Chief Executive)
HA Shapiro
(Company Secretary)
Woodmead
17 August 2004
www.aspenpharma.com
Date: 18/08/2004 12:29:22 PM Supplied by www.sharenet.co.za
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