Wrap Text
APN - Aspen - Interim Financial Results For The Six Months Ended 31 December
2008
Aspen Pharmacare Holdings Limited ("Aspen")
(Registration number 1985/002935/06)
Share code: APN & ISIN: ZAE000066692
INTERNATIONALISATION OF THE GROUP
Interim financial results for the six months ended 31 December 2008
REVENUE +91%
2008: R4 264 million
2007: R2 230 million
HEADLINE EARNINGS PER SHARE +77%
2008: 193,8 cents
2007: 109,6 cents
OPERATING PROFIT +84%
2008: R1 163 million
2007: R634 million
COMMENTARY
GROUP
Aspen increased headline earnings per share for the six months ended 31
December 2008 by 77% to 193,8 cents. The growth in earnings per share was
lower at 54% due to the inclusion of non-recurring capital profits in the
determination of earnings per share in the prior year. Revenue increased by
91% to R4 264 million whilst operating profit was up 84% at R1 163 million.
As expected, the leading growth driver was the strong contribution from
Aspen`s recently expanded international operations. For the first time,
operating profits generated by the Group`s international businesses exceeded
those from the South African business.
SOUTH AFRICAN OPERATIONS
Revenue from Aspen`s South African operations increased by R560 million to R2
331 million, a rise of 32%, thanks primarily to a strong showing from
pharmaceuticals. Margin pressures in pharmaceuticals limited growth in
earnings before interest, tax and amortisation ("EBITA") to 10% at R586
million. Significantly higher off take from the public sector shifted product
mix to lower margin products. Furthermore, raw material prices and production
inflation rose sharply whilst prices remained fixed under the Single Exit
Price ("SEP") regulations and the public health tender awards. The 13,2%
increase in SEP approved by the Department of Health ("DoH") with effect from
February 2009 and the price adjustment mechanism applicable to state tenders
should assist pharmaceutical operating profit margins in the second half of
the year.
Aspen has maintained its position as the leading supplier of medicines in both
the private market and the public health sector. Aspen increased its share of
the total private pharmaceutical market to 13% and also gained market share in
generics to reach 36%. The Group is the country`s leading provider of anti-
retrovirals for the treatment of HIV/Aids.
Revenue from pharmaceuticals grew 35% to R1 789 million, driven by a
substantial increase in volumes and complemented by positive performances from
recently launched products such as TruvadaTM, VireadTM, VectorylTM and Aspen
Effavirenz. Aspen`s leading over-the-counter ("OTC") brands, including
FlusinTM, Lenadol(R) and Sinuclear(R), delivered good results. Following the
banning by the South African Medicines Control Council ("MCC") of
d-norpseudoephedrine, the active pharmaceutical ingredient in the market`s
biggest selling weight-loss preparations, Aspen has successfully launched
replacement products under its major slimming brands, Thinz(R), LeanorTM and
Slenz(R).
Despite the downturn in the retail sector, the consumer division grew revenue
by 22%. Household products such as Lennon Dutch Medicines(R), WoodwardsTM
Gripewater and Guronsan(R) C performed well in a division which is still
rebuilding its laxative portfolio after the MCC ordered the withdrawal of
phenolphthalein-containing products. Aspen Nutritionals, the infant
nutritional business, continued to show excellent returns from its range
including Infacare(R), S26(R) and SMA(R). A new infant milk label, MelegiTM,
has been launched as an export product in selected African countries.
Aspen`s manufacturing facilities have been operating at high levels of
productivity. Unscheduled increases in demand from the public health sector
has caused significant pressure on production capacity in certain areas which
at times has compromised service levels. The building of additional packing
capacity in the Oral Solid Dosage Facility will unlock increased levels of
output. Further solid dosage manufacturing capacity is scheduled to become
available towards the end of 2009 with the completion of the new tabletting
production plant which is the first phase of the heritage facility upgrade in
Port Elizabeth.
The Sterile Facility is undergoing validation at present and the first supply
of eye-drops to the USA market, under the contract with Prestige Inc., is
expected to take place before the financial year-end.
INTERNATIONAL OPERATIONS
The international operations of the Group have been expanded substantially
over the past 12 months with acquisition of businesses in Latin America and
East Africa. In addition, with effect from 30 June 2008, the Group`s
intellectual property portfolio in international markets has been
significantly enhanced by the acquisition of four globally branded products,
EltroxinTM, LanoxinTM, ImuranTM and ZyloricTM from GlaxoSmithKline ("GSK").
Two licensing deals for emerging market territories, concluded with US-based
Iroko Pharmaceuticals("Iroko"), have also added to the global product range.
The Group now supplies product to more than 100 countries across the world.
The international operations recorded revenue of R1 934 million (prior year
R460 million) and EBITA of R630 million (prior year R101 million). Revenue
from the global brands amounted to R696 million. Distribution arrangements are
presently in place with GSK and with Iroko. Transition to Aspen`s
international distribution network is progressing well.
Aspen Australia continued its record of sustained growth. The Australian
product offering was expanded during the period. This combined with a focused
approach to promotion of the range, has resulted in an increase in revenue of
55% to R484 million. This was achieved despite a challenging legislative
environment.
The Latin American operations contributed 10% to Group revenue with sales of
R408 million. Cellofarm, the Brazilian business, accounted for R330 million of
this with the balance shared between the Mexican and Venezuelan companies. The
market focus of Cellofarm is in the process of being redirected. The recent
recruitment of 150 experienced sales representatives will provide the capacity
to promote and support the brand development strategy which has been
initiated. The construction of the manufacturing facilities at Campos has been
completed. The penem plant has been accredited by the Brazilian authorities
and commercial production has commenced. The penicillin plant is awaiting
final approval following inspection by the regulator.
Shelys, the Group`s business in East Africa, recorded revenue of R200 million
in Tanzania, Kenya and Uganda. The OTC manufacturing facility, under
construction in Nairobi, is due for completion before the end of 2009.
FUNDING
The recent expansion of the Group`s activities has raised the level of
borrowings, net of cash, to R4 937 million which represents gearing of 56%. A
five-year loan facility of USD385 million, from a consortium of banks was
entered into in October 2008. The facility comprises a five-year amortising
loan of USD255 million and a five-year non-amortising loan of USD130 million.
Under an interest rate swap, the cost of this funding has been fixed at 6,11%
per annum over 90% of its term.
Interest paid net of interest received, amounted to R198 million and was
covered 6 times by earnings before interest, tax, depreciation and
amortisation. Foreign exchange losses of R34 million were recorded (prior year
R4 million) primarily arising from exposure of the Group`s functional
currencies to the strengthening US Dollar.
PROSPECTS
Aspen has reinforced its leading market position in the South African
pharmaceutical sector over the past six months with strong revenue growth and
market share gains in all categories. The positive momentum in sales is
expected to continue in the second half of the year. The increase in SEP of
13,2% granted by the DoH, with effect from February 2009 will provide relief
from sharply higher supply costs and should allow for a return to more
reasonable profit margins in the second half of the year. The retail sector is
likely to remain a difficult trading environment, but it is hoped that, the
continued pursuit of the successful strategies implemented by the consumer
division in the first half, will continue to yield favourable results. With
the Group`s expansion, steps have been taken to strengthen South African
management structures. Noel Guliwe, formerly South African country President
of Novartis, has been recruited to head Aspen`s commercial business in South
Africa.
Over the course of the next calendar year, three major capital projects at the
Port Elizabeth site are due for completion. Consequently, investments in capex
and technology, approaching R1 billion, will be brought into production. The
additional solid dose manufacturing and packing capabilities will cater for
the expected growth in demand from the Group`s domestic and international
businesses. The Sterile Facility will provide Aspen with production
capabilities in injectables, hormonal injectables and eye-drops for all major
international markets.
It is expected that the international businesses will provide significant
impetus to the growth of the Group in forthcoming years. The international
distribution capability, which is presently being established, will create a
network capable of being leveraged by the addition of further global brands.
The launch of existing global brands into new markets is also under
investigation. The business model for the Latin American business is in the
process of being redirected towards active promotion and support of products
in the private sector. The development of product pipelines for the
international businesses is a major focus area for the Group, the benefits of
which are expected to become apparent in two to three years` time. The
oncology facility in Bangalore has received its first international
accreditation, with the Australian Therapeutic Goods Association approving the
site in October 2008. Commercialisation of the oncology product portfolio is
expected to commence in 2010. The licensing deal with GSK, in terms of which,
GSK will brand, market and promote products sourced from Aspen in emerging
markets, is progressing in accordance with a mutually agreed project plan. The
first launch by GSK of products under this arrangement is scheduled for 2010.
The remaining international businesses are all well positioned for the second
six months of the financial year, although there are potential headwinds which
could impact performance. The global products trade in numerous currencies and
are exposed to the volatility currently being experienced in world markets.
The transfer from transitional distribution arrangements, which are presently
in place, to Aspen`s distribution network is expected to add to costs.
The disposal of Aspen`s 50% shareholding in Astrix remains subject to the
fulfilment of conditions precedent. It is anticipated that this transaction
will complete before the financial year-end. Continuity of supply from Astrix
has been secured.
Aspen`s performance in the first half of this financial year has been
particularly rewarding given the very challenging global markets. Indications
for the second half remain positive with improved growth expected in the South
African pharmaceutical business. However, the Group is exposed to global
currency fluctuations and changes in the world economic climate.
Aspen has implemented strategies designated to add to the Group`s performance
in future years.
By order of the board
N J Dlamini
Chairman
S B Saad
Group Chief Executive
M G Attridge
Deputy Group Chief Executive
H A Shapiro
Company Secretary
Woodmead - 5 March 2009
DISCLAIMER
We may make statements that are not historical facts and relate to analyses
and other information based on forecasts of future results and estimates of
amounts not yet determinable. These are forward-looking statements as defined
in the U.S. Private Securities Litigation Reform Act of 1995. Words such as
"believe", "anticipate", "expect", "intend", "seek", "will", "plan",
"indicate", "could", "may", "endeavour" and "project" and similar expressions
are intended to identify such forward-looking statements, but are not the
exclusive means of identifying such statements. By their very nature, forward-
looking statements involve inherent risks and uncertainties, both general and
specific, and there are risks that predictions, forecasts, projections and
other forward-looking statements will not be achieved. If one or more of these
risks materialise, or should underlying assumptions prove incorrect, actual
results may be very different from those anticipated. The factors that could
cause our actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such forward-looking
statements are discussed in each year`s annual report. Forward-looking
statements apply only as of the date on which they are made, and we do not
undertake other than in terms of the Listings Requirements of the JSE Ltd, any
obligation to update or revise any of them, whether as a result of new
information, future events or otherwise. All profit forecasts published in
this report are unaudited.
GROUP INCOME STATEMENT
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 December 31 December 30 June
% 2008 2007 2008
Change Rm Rm Rm
Revenue 91 4 264,4 2 230,4 4 881,3
Cost of sales (2 320,5) (1 177,6) (2 658,6)
Gross profit 85 1 943,9 1 052,8 2 222,7
Other operating 5,8 62,7 90,3
income
Selling and (471,9) (298,2) (668,3)
distribution
expenses
Administrative (255,6) (122,6) (275,9)
expenses
Other operating (59,1) (60,9) (136,3)
expenses
Operating profit B# 84 1 163,1 633,8 1 232,5
Investment income C# 115,4 147,3 263,4
Net financing D# (363,1) (181,9) (287,1)
costs
915,4 599,2 1 208,8
Share of after (1,9) 0,3 (1,1)
tax
(losses)/profits
from associates
Net profit before 52 913,5 599,5 1 207,7
tax
Tax (223,8) (161,6) (343,2)
Net profit after 58 689,7 437,9 864,5
tax
Attributable to:
Equity holders of 684,0 439,3 862,9
the parent
Minority interest 5,7 (1,4) 1,6
58 689,7 437,9 864,5
Weighted average 355 617 351 397 351 792
number of shares
in issue (`000)
Earnings per 54 192,3 125,0 245,3
share - basic
(cents)
Earnings per 54 186,7 121,5 240,1
share - diluted
(cents)
#See notes on supplementary information.
HEADLINE EARNINGS
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 December 31 December 30 June
% 2008 2007 2008
Change Rm Rm Rm
Reconciliation of
headline earnings
Net profit attributable 684,0 439,3 862,9
to equity holders of the
parent
Adjusted for:
- Impairment of property, 2,4 - -
plant and equipment (net
of tax)
- Loss on disposal of 0,5 0,1 0,5
property, plant and
equipment (net of tax)
- Profit on disposal of
intangible assets
(net of tax) - (37,9) (37,0)
- Impairment of 2,2 0,3 8,2
intangible assets (net of
tax)
- Profit on sale of - (16,6) (20,9)
shares (net of tax)
Headline earnings 79 689,1 385,2 813,7
Headline earnings per 77 193,8 109,6 231,3
share (cents)
Headline earnings per 76 188,1 107,1 227,0
share - diluted (cents)
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 December 31 December 30 June
2008 2007 2008
Rm Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 2 289,7 1 070,5 1 744,6
Goodwill 677,7 536,8 589,9
Investment in associates 23,8 25,1 25,8
Intangible assets 4 635,2 848,0 3 723,1
Preference share investment - 376,8 -
Non-current financial 45,2 23,8 4,7
receivables
Deferred tax assets 1,9 15,7 1,0
Total non-current assets 7 673,5 2 896,7 6 089,1
Current assets
Inventories 1 495,0 1 073,1 1 447,0
Receivables and prepayments 2 087,2 945,1 1 789,5
Other current receivables 6,3 0,7 0,8
Cash and cash equivalents 1 560,1 1 870,0 1 522,2
Total current assets 5 148,6 3 888,9 4 759,5
Total assets 12 822,1 6 785,6 10 848,6
SHAREHOLDERS` EQUITY
Share capital and share 507,9 490,5 493,8
premium
Treasury shares (571,6) (571,6) (571,6)
Share-based compensation 75,0 60,0 62,5
reserve
Non-distributable reserves 319,0 249,0 462,0
Retained income 3 333,2 2 222,2 2 649,0
Ordinary shareholders` equity 3 663,5 2 450,1 3 095,7
Equity component of preference 162,0 162,0 162,0
shares
3 825,5 2 612,1 3 257,7
Minority interest 66,8 5,6 61,1
Total shareholders` equity 3 892,3 2 617,7 3 318,8
LIABILITIES
Non-current liabilities
Preference shares - liability 399,4 402,3 402,1
component
Borrowings 4 206,0 13,1 75,9
Deferred-payables and other
non-current financial
liabilities 162,2 5,9 2,5
Deferred tax liabilities 193,6 63,2 155,1
Retirement benefit obligations 10,2 7,2 9,4
Total non-current liabilities 4 971,4 491,7 645,0
Current liabilities
Trade and other payables 1 351,9 816,4 1 004,8
Financial liability for - - 2 653,0
products acquired
Borrowings 2 291,4 2 700,6 3 103,5
Deferred-payables and other
current financial
liabilities 174,8 15,7 12,2
Current tax liabilities 140,3 143,5 111,3
Total current liabilities 3 958,4 3 676,2 6 884,8
Total liabilities 8 929,8 4 167,9 7 529,8
Total equity and liabilities 12 822,1 6 785,6 10 848,6
Number of shares in issue (net 359 652 352 035 352 411
of treasury shares) (`000)
Net asset value per share 1 018,6 696,0 878,5
(cents)
GROUP CASH FLOW STATEMENT
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 December 31 December 30 June
2008 2007 2008
Rm Rm Rm
Cash flows from operating
activities
Cash operating profit 1 327,4 715,7 1 494,0
Changes in working capital (296,9) (183,3) (435,9)
Cash generated from operations 1 030,5 532,4 1 058,1
Net financing costs paid (416,1) (195,7) (347,5)
Investment income received 115,4 147,3 263,4
Tax paid (184,1) (136,5) (321,6)
Net cash from operating 545,7 347,5 652,4
activities
Cash flows from investing
activities
Replacement capital (41,3) (43,3) (79,3)
expenditure - property, plant
and equipment
Expansion capital expenditure (302,9) (138,3) (300,0)
- property, plant and
equipment
Proceeds on disposal of 1,3 1,1 3,2
tangible assets
Replacement capital (0,3) (0,1) (3,7)
expenditure - intangible
assets
Expansion capital expenditure (2 987,2) (25,1) (162,3)
- intangible assets
Proceeds on disposal of 1,1 1,4 55,2
intangible assets
Acquisition of businesses (22,7) (174,7) (1 490,5)
Cash and cash equivalents in 312,1 0,2 133,0
acquirees
Disposal of 51% of Co-Pharma - 10,1 10,1
Ltd, net of cash
Amounts receivable in respect - (30,6) -
of Co-Pharma Ltd disposal
(Increase)/decrease in non- (37,9) - 1,2
current financial receivables
Redemption of investment in - - 376,8
preference shares
Payment of outstanding (69,2) - -
Oncology business purchase
consideration
Net cash used in investing (3 147,0) (399,3) (1 456,3)
activities
Cash flows from financing
activities
Proceeds from borrowings 6 523,7 1 956,0 5 004,3
Repayment of borrowings (3 105,9) (1 839,3) (3 506,5)
Repayment of deferred-payables (4,0) (55,1) (64,5)
Proceeds from deferred- - - 9,5
payables
Net capital distribution paid - (245,9) (246,0)
Proceeds from issue of 13,2 12,0 15,3
ordinary shares
Dividend paid (0,8) (1,5) (1,5)
Net cash generated by/(used 3 426,2 (173,8) 1 210,6
in) financing activities
Movement in cash and cash 824,9 (225,6) 406,7
equivalents before exchange
rate changes
Effects of exchange rate (298,5) (6,4) 40,7
changes
Cash and cash equivalents
Movement in cash and cash 526,4 (232,0) 447,4
equivalents
Cash and cash equivalents at
the beginning of the
period/year 944,9 497,5 497,5
Cash and cash equivalents at 1 471,3 265,5 944,9
the end of the period/year
Reconciliation of cash and
cash equivalents
Cash and cash equivalents per 1 560,1 1 870,0 1 522,2
the balance sheet
Less: Bank overdrafts* (88,8) (1 604,5) (577,3)
Cash and cash equivalents per 1 471,3 265,5 944,9
the cash flow statement
*Bank overdrafts are included within borrowings under the current liabilities
on the balance sheet.
For the purposes of the cash flow statement, cash and cash equivalents
comprise cash-on-hand, deposits held on call with banks less bank overdrafts
which form an integral part of Aspen`s cash management.
SUPPLEMENTARY INFORMATION
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 December 31 December 30 June
2008 2007 2008
Rm Rm Rm
A. Capital expenditure
Incurred 3 331,8 206,8 545,3
- tangible assets 344,2 181,6 379,3
- intangible assets 2 987,6 25,2 166,0
Contracted
- tangible assets 90,5 36,9 62,6
- intangible assets - 9,5 -
Authorised but not contracted
for
- tangible assets 279,5 258,1 457,5
- intangible assets - - 0,8
B. Operating profit has been
arrived at after charging
Depreciation of property, 55,0 33,4 74,6
plant and equipment
Amortisation of intangible 52,7 60,6 127,7
assets
Share-based payment expenses - 14,4 23,1 32,9
employees
C. Investment income
Preference share dividends - 16,6 33,3
received
Interest received 115,4 130,7 230,1
Total investment income 115,4 147,3 263,4
D. Net financing costs
Interest paid (313,3) (158,6) (322,8)
Net foreign exchange (33,9) (3,5) 60,4
(losses)/gains
Fair value gains/(losses) on 1,5 (1,8) 3,5
financial instruments
Notional interest on financial 3,5 0,4 9,9
instruments
Preference share dividends (20,9) (18,4) (38,1)
paid
Net financing costs (363,1) (181,9) (287,1)
E. Acquisition of an
additional 1% share in
PharmaLatina Ltd
With effect from 1 July 2008,
Aspen Global acquired an
additional 1% of the shares in
PharmaLatina Ltd for US$2.8
million. In addition to the
control that the 1% additional
shares gives Aspen, in terms
of the agreement Aspen is also
entitled to 100% of the
profits and dividends of
PharmaLatina Ltd. The terms
of the put and call option
have also been revised such
that Aspen Global has the
right to acquire, and Strides
have the right to sell to
Global, Strides` remaining 49%
interest in the Latam
operations based on multiples
of the earnings before
interest, tax, depreciation
and amortisation for the year
ended 30 June 2009. Additional 50%
Cost of the acquisition 22,512
Cash paid for additional 1%
Estimated amount payable for 172,480
the remaining 49%
Deferred receivable converted 440,098
to consideration (596,084)
Fair value of assets acquired 39,006
Goodwill Fair value
recognised as
at 1 July 2008
50%
310,029
Property, plant and equipment 79,416
Intangible assets 107,228
Inventories 111,859
Trade and other receivables 312,079
Cash and cash equivalents (74,249)
Non-current borrowings (24,570)
Deferred tax liabilities (1,204)
Retirement benefit obligations (109,158)
Trade and other payments (113,922)
Current borrowings (1,424)
Current income tax liabilities 596,084
Fair value of assets acquired
The initial accounting for the
business combination has been
done a provisional basis and
will only be finalised in the
year ending 30 June 2009.
F. Other commitments
During the 2003 financial year
Aspen entered into a
12-year agreement with
GlaxoSmithKline South Africa
(Pty) Ltd to distribute and
market a range of their
products.
In terms of this agreement
Aspen is committed
to pay the following amounts
to GlaxoSmithKline South
Africa (Pty) Ltd
- payable within one year 13,9 8,1 15,1
- payable thereafter 40,5 62,6 47,5
54,4 70,7 62,6
During the 2005 financial year
Aspen Australia Pty Ltd
entered into a 10-year
agreement with Novartis
Pharmaceuticals Australia Pty
Ltd to distribute and market a
range of their products. In
terms of this agreement Aspen
is committed to spend the
following amounts on promotion
of the products
- payable within one year 7,5 8,6 10,5
- payable thereafter 30,6 40,9 46,8
38,1 49,5 57,3
G. Contingent liabilities
There are contingent
liabilities in respect of:
Additional payments in respect 9,3 6,8 7,8
of the Quit worldwide
intellectual property rights
Guarantees covering loan and
other obligations
to third parties 17,0 6,7 23,2
STATEMENT OF CHANGES IN GROUP EQUITY
Share Treasury Share-based Non-
capital shares compensation distributable
and reserve reserves
premium
Rm Rm Rm Rm
Balance as at 1 July 746,3 (598,9) 47,6 267,8
2007
Currency translation - - - 117,3
differences
Amounts retained in - - - 87,6
equity due to hedge
accounting of
acquisitions
Net profit for the - - - -
year
Dividend paid - - - -
Capital distribution (273,2) 27,3 - -
Acquisition of - - - -
subsidiary
Disposal of 51% of - - - (10,8)
shares in Co-Pharma
Ltd
Cash flow hedges - - - 0,1
realised
Share options and - - 27,6 -
appreciation rights
awarded
Transfer from share- - - (12,7) -
based compensation
reserve
Issue of ordinary 20,7 - - -
share capital
Equity portion of tax - - - -
claims in respect of
share schemes
Balance as at 30 June 493,8 (571,6) 62,5 462,0
2008
Currency translation - - - 8,9
differences
Net profit for the - - - -
year
Dividend paid - - - -
Issue of ordinary 14,1 - - -
share capital
Share options and - - 13,5 -
appreciation rights
awarded
Transfer from share- - - (1,0) -
based compensation
reserve
Interest rate swap - - - (151,9)
obligation
Balance as at 31 507,9 (571,6) 75,0 319,0
December 2008
STATEMENT OF CHANGES IN GROUP EQUITY
Retained Equity Minority Total
income component interest
of
preference
shares
Rm Rm Rm Rm
Balance as at 1 July 1 757,6 162,0 7,0 2 389,4
2007
Currency translation - - - 117,3
differences
Amounts retained in - - - 87,6
equity due to hedge
accounting of
acquisitions
Net profit for the 862,9 - 1,6 864,5
year
Dividend paid (1,5) - - (1,5)
Capital distribution - - (245,9)
Acquisition of - - 52,5 52,5
subsidiary
Disposal of 51% of 21,7 - - 10,9
shares in Co-Pharma
Ltd
Cash flow hedges - - - 0,1
realised
Share options and - - - 27,6
appreciation rights
awarded
Transfer from share- 12,7 - - -
based compensation
reserve
Issue of ordinary - - - 20,7
share capital
Equity portion of tax (4,4) - - (4,4)
claims in respect of
share schemes
Balance as at 30 June 2 649,0 162,0 61,1 3 318,8
2008
Currency translation - - - 8,9
differences
Net profit for the 684,0 - 5,7 689,7
year
Dividend paid (0,8) - - (0,8)
Issue of ordinary - - - 14,1
share capital
Share options and - - - 13,5
appreciation rights
awarded
Transfer from share- 1,0 - - -
based compensation
reserve
Interest rate swap - - - (151,9)
obligation
Balance as at 31 3 333,2 162,0 66,8 3 892,3
December 2008
SEGMENTAL ANALYSIS
Unaudited six Unaudited six Restated
months ended months ended audited year
31 December 2008 31 December ended
2007 30 June 2008
Rm % of Rm % of % Rm % of
total total change total
Revenue
South Africa 2 330,5 55 1 770,9 79 32 3 758,4 77
International 1 933,9 45 459,5 21 321 1 122,9 23
Gross sales 1 990,3 557,9 1 370,0
Less: (56,4) (98,4) (247,1)
Intersegment
sales
4 264,4 100 2 230,4 100 91 4 881,3 100
Operating
profit before
amortisation
and disposals
South Africa 585,6 48 534,7 84 10 1 059,0 82
International 630,2 52 101,3 16 522 238,8 18
1 215,8 100 636,0 100 91 1 297,8 100
* **
*Excludes profit on sale of shares of R16,6 million and profit on sale of
Formule Naturelle range of R41,8 million.
**Excludes profit on sale of shares of R21,6 million and profit on sale of
Formule Naturelle range of R40,8 million.
Unaudited six Unaudited six Restated audited
months ended months ended year ended
31 December 2008 31 December 2007 30 June 2008
Rm % of Rm % of Rm % of
total total total
Entity wide
disclosure
Geographical
analysis of
revenue
South Africa - 1 789,0 42 1 327,6 60 2 807,6 58
pharmaceutical
South Africa - 541,5 13 443,3 20 950,9 19
consumer
East Africa 200,0 5 - - 46,7 1
Asia Pacific 483,6 11 311,6 13 709,0 14
Latin America 407,9 10 - - 82,9 2
Global brands 695,7 16 - - - -
Rest of the 146,7 3 147,9 7 284,2 6
world
4 264,4 100 2 230,4 100 4 881,3 100
Product sales
analysis
Pharmaceutical 3 532,9 83 1 717,8 77 3 785,9 78
Consumer 731,5 17 512,6 23 1 095,4 22
4 264,4 100 2 230,4 100 4 881,3 100
BASIS OF ACCOUNTING
The condensed interim financial results have been prepared in accordance with
IFRS, IAS 34 - Interim Financial Reporting, the Listing Requirements of the
JSE Ltd and Schedule 4 of the South African Companies Act (Act 61 of 1973, as
amended).
The accounting policies used in the preparation of these interim results are
consistent with those used in the annual financial statements for the year
ended 30 June 2008.
IFRS 8 - Operating Segments has been early adopted with an effective date of 1
July 2008. Management has determined operating segments based on reports
reviewed by the Group Chief Executive that are used to make strategic
decisions. The Group Chief Executive reviews the business by a geographical
segment. There has been no aggregation of operating segments.
During the six months ended 31 December 2008, Aspen conducted an extensive
review of the useful lives of intangible assets and accordingly reassessed
certain intangible assets to be of an indefinite life.
As a result of this change in estimate, there was a reduction in the
amortisation charge of R7,8 million for the six months ended 31 December 2008.
It should be noted that the GSK intangible assets acquired on 3 June 2008 have
also been reclassified as being of an indefinite life, this has however no
financial effect as no amortisation charge was recorded in the prior financial
year.
The interim information has been prepared in accordance with the IFRS and
IFRIC interpretations as adopted for use in South Africa at the time of the
preparation of the information. As these standards and interpretations are
subject to ongoing review, they may be amended between the date of this report
and the finalisation of the annual financial statements for the year to June
2009.
DIRECTORS
N J Dlamini (Chairman)*, A J Aaron*, R Andersen*, M G Attridge, M R Bagus*, J
F Buchanan*, C N Mortimer*, D M Nurek*, S B Saad, S Zilwa*.
TRANSFER SECRETARY
Computershare Investor Services (Pty) Ltd (Registration number
2004/003647/07), 70 Marshall Street, Johannesburg, 2001 (PO Box 1053,
Johannesburg, 2000).
REGISTERED OFFICE
Building no 8, Healthcare Park, Woodlands Drive, Woodmead
COMPANY SECRETARY
H A Shapiro
*Non-executive director
www.aspenpharma.com
5 March 2009
Sponsor: Investec Bank Limited
Date: 05/03/2009 13:00:03 Supplied by www.sharenet.co.za
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