To view the PDF file, sign up for a MySharenet subscription.

ASPEN PHARMACARE HOLDINGS LIMITED - Reviewed provisional Group financial results for the year ended 30 June 2013

Release Date: 11/09/2013 12:30
Code(s): APN     PDF:  
Wrap Text
Reviewed provisional Group financial results for the year ended 30 June 2013

Aspen Pharmacare Holdings Limited (Aspen) 
(Registration number 1985/002935/06) 
Share code: APN
ISIN: ZAE000066692
Reviewed provisional Group financial results for the year ended 30 June 2013

- Revenue from continuing operations increased 27% to R19,3 billion
- Operating profit from continuing operations increased 28% to R5,0 billion
- Offshore contribution increased to 63% of Group operating profit
- Normalised diluted headline earnings per share from continuing operations increased 
  31% to 836,2 cents
- Diluted cash flow per share from continuing operations increased 37% to 874,1 cents
- Headline earnings per share increased 21% to 788,0 cents
- Earnings per share increased 20% to 773,0 cents
- Total distribution to shareholders of 157 cents per share


Commentary
Group performance
Aspen achieved revenue growth of 27% to R19,3 billion and increased operating profit by 28% to R5,0 billion in the
year ended 30 June 2013. Normalised headline earnings, being headline earnings adjusted for specific non-trading items,
advanced 32% to R3,8 billion and normalised diluted headline earnings per share was up 31% at 836,2 cents. All business
segments recorded growth in revenue and operating profit with the International business leading the way.

South African business
In the South African business, revenue improved by 20% to R7,4 billion and operating profit before amortisation,
adjusted for specific non-trading items (EBITA) increased 11% to R2,0 billion.

Revenue in the Pharmaceutical division rose 20% to R6,2 billion. Organic growth was complemented by a strong
contribution from new product launches in the private sector. In the public sector expanding demand for antiretrovirals (ARVs)
added to the growth momentum although the greater weighting of revenue from low margin ARVs was the largest factor in the
contraction of margin percentages. The weakening of the Rand and rising inflation in administered costs also put pressure on margins
although this was partially relieved by gains in production efficiency and procurement savings.

The Consumer division delivered an 18% increase in revenue with nutritionals the biggest growth driver. Innovative new
products, growing-up-milk and ready-to-feed infant milk, were launched expanding Aspens offering in the nutritional
sector.

Capital expansion projects have continued according to plan at all of the South African sites. In Port Elizabeth, land
was acquired immediately adjacent to Aspens site. Part of this land is already under construction with the
commencement of the building of the high containment suite while the remaining land remains available for future projects. The
upgrade of packing capabilities is also underway in Port Elizabeth. The expansion and enhancement of manufacturing capabilities 
is continuing at Fine Chemicals in line with the strategy to achieve greater vertical integration of this site with Group active 
pharmaceutical ingredient (API) demands. The projects underway in East London and at Clayville are nearing completion.

Asia Pacific business
The regions continuous record of growth since the business was established in this territory in 2001 continued with a
gain of 26% in revenue to R7,6 billion and with EBITA increasing by 30% to R1,9 billion. 

Rand-denominated performance was enhanced by the relative strengthening of the local currencies. The Asia Pacific region was the 
largest contributor to revenue in the Group for the first time, accounting for 37% of total gross revenue. This was achieved despite 
the mandated price cuts in Australia imposed by existing legislation. Revenue growth was supported by acquired products and
pleasing progress in the Asian territories. EBITA advances benefitted from the continuation of the project to source more
competitive product costs including the migration of production to the Port Elizabeth site in South Africa.  The newly
established subsidiary in Malaysia commenced trade in July 2013 and a further subsidiary has been established in Taiwan.
Distribution in Australia of the classic brands portfolio acquired by the Group from GlaxoSmithKline (GSK) in December
2012 and the infant milk products acquired by the Group from Nestlé in May 2013, have been successfully taken on.

International business
The International business showed strong growth with revenue increasing 48% to R3,7 billion and EBITA rising 59% to
R1,5 billion. Latin America showed the biggest advance where sales to customers in this territory climbed 53% to R1,6
billion. A combination of organic and acquisitive growth propelled the Latin American performance despite the impact of the
currency devaluation in Venezuela. The global brands portfolio was an important contributor to the growth achieved in
the International business and the margin improvement projects for these products continued to yield favourable outcomes.
Contributions from certain territories in this business have also benefitted from relative currency strength against the
Rand.

Sub-Saharan Africa business
Gross revenue in sub-Saharan Africa increased 26% to R2,1 billion driven by expanded promotional support. The negative
growth in EBITA during the first six months was reversed with an increase of 16% in EBITA in the second six months
bringing the result for the year to R252 million, an increase of 2%.

Funding
Borrowings, net of cash, increased by R4,0 billion over the year to R11,1 billion. R5,6 billion was spent on business
and product acquisitions while a further R0,7 billion was invested in capital projects. The Group continued its record
of strong cash flow generation with cash inflows of R4,0 billion from operating activities. Gearing moved up to 33% at
year end from 29% a year prior. Financing costs, net of interest received, were covered 10 times by operating profit
before amortisation.

The Group is presently engaged in a major debt raising and restructure exercise to support the impending transactions
(see below).

Impending transactions
Aspen has undertaken extensive corporate activity over the past year and the following transaction, certain of which are subject
to suspensive conditions, are being progressed by Group companies:
- The acquisition of an API manufacturing business, primarily in the Netherlands, from MSD for approximately 
  36 million plus the value of inventory, to be effective 1 October 2013. Further details appear in the SENS announcement of 
  27 June 2013.
- In a related agreement with MSD, Aspen has an option to acquire a portfolio of 11 branded finished dose form molecules
  covering a diverse range of therapeutic areas for approximately US$600 million. The most likely date for the acquisition of
  this portfolio through the exercise of the option is 31 December 2013. Further details appear in the SENS announcement of 
  27 June 2013.
- A binding, irrevocable offer submitted to GSK to acquire the Arixtra and Fraxiparine/Fraxodi brands worldwide
  (excluding China, India and Pakistan) together with the specialised sterile production site which manufactures these brands
  for approximately £700 million. In terms of the offer the date of acquisition of the brands would be 31 December 2013 and
  the date of acquisition of the site would be 30 April 2014. Further details appear in the SENS announcements of 18 June 2013 
  and 24 July 2013.
- The acquisition from Nestlé of certain licence rights to infant nutritional intellectual property, net assets including 
  a production facility in Mexico and shares in infant nutritional businesses in several countries in Latin America 
  with a proposed effective date of 28 October 2013. Further details appear in the SENS announcement of 7 August 2013. 
- The acquisition from Nestlé of certain rights to intellectual property licenses and net assets in the infant nutritionals 
  business presently conducted by Pfizer in certain southern African territories, including South Africa, remains subject to 
  the approval of the South African competition authorities. Further details appear in the SENS announcement of 18 April 2013.

Prospects
The completion of the impending MSD and GSK transactions will transform the Group, expanding the global brands
portfolio with the addition of established products which have strong market acceptance and widening the geographic reach of
Aspen. This will enable Aspen to establish its own business units in Russia, other former Soviet republics and across Europe as well 
as extending its influence in Latin America and Asia. Significant management attention is being devoted to the development and
implementation of the plans necessary to successfully execute these acquisitions. It is expected that synergies will be realised
between these two transactions in addition to the focus Aspen will place on pursuing opportunities to achieve greater
market penetration with the brands and improving production efficiencies.

The International business will be the greatest beneficiary of the completion of the impending transactions and this
will add further momentum to the impressive growth achieved by this region in the past year.

Growth in the Asia Pacific territory will be supported by the impending transactions and the development of Aspens
footprint in Asia.

As the market leader in the private and public pharmaceutical sectors in South Africa, Aspen is well positioned to
extend the solid performance achieved in the past year through organic growth. An entire new management team has been
installed in the Consumer division with further impetus pending the approval by the competition authorities of the infant
nutritional transaction with Nestlé.

In sub-Saharan Africa the focus will be on continuing the progress made in the second half of the past year. This
territory remains vulnerable to geo-political volatility.

Provided there are no material changes in the prevailing macro-economic conditions, in the forthcoming year it is expected that
the solid growth platform already established in all all regions will be strongly supplemented by contributions to the 
International and Asia Pacific territories from the take-on of the impending transactions, particularly in the second half 
of the year. Debt levels in the Group will initially be close to Aspens self-imposed limits, 
but this gearing is expected to reduce quite rapidly through strong operational cash flows.

Cash dividend and capital distribution
Taking into account the earnings and cash flow performance for the year ended 30 June 2013, existing debt service
commitments and future proposed investments, notice is hereby given that the Board has declared a total distribution of
157 cents per share (2012: capital distribution of 157 cents per share), comprising:
- a cash dividend out of income reserves of 131 cents per ordinary share. The dividend carries STC credits equivalent to
  131 cents per ordinary share and no dividends withholding tax will therefore be payable by shareholders who are not exempt from
 paying dividends withholding tax on this portion of the distribution; and 
- a capital distribution of 26 cents per ordinary share (2012: 157 cents) by way of a capital reduction payable out
  of share premium.

The total distribution is payable to shareholders recorded in the share register of the company at the close of
business on 4 October 2013. 

Shareholders should seek their own tax advice of the consequences associated with the total distribution.

The directors are of the opinion that the company will satisfy the solvency and liquidity requirements of sections 4
and 46 of the Companies Act, 2008. Future distributions will be decided on a year-to-year basis. 

The income tax reference number of Aspen is 9325178714. 

The Share Capital in issue at present is 455 738 785 shares.

In compliance with IAS 10: Events After Balance Sheet Date, the total distribution will only be accounted for in the
financial statements in the year ending 30 June 2014.

Last day to trade cum total distribution                 Friday, 4 October 2013
Shares commence trading ex total distribution            Monday, 7 October 2013
Record date                                             Friday, 11 October 2013
Payment date                                            Monday, 14 October 2013

Share certificates may not be dematerialised or rematerialised between Monday, 7 October 2013 and Friday, 11 October 2013.

By order of the Board

NJ Dlamini                 SB Saad
(Chairman)                 (Group Chief Executive)

Woodmead
11 September 2013


Group statement of financial position
                                                                                2013           2012   
at 30 June 2013                                                 Notes      Rmillion      Rmillion                                                                                                     
ASSETS                                                                                                
Non-current assets                                                                                    
Property, plant and equipment                                                4 342,6        3 807,0   
Goodwill                                                           G#        5 973,2        5 343,9   
Intangible assets                                                  H#       18 933,0       11 869,8   
Other non-current assets                                                        26,7           31,5   
Deferred tax assets                                                            369,2          234,4   
Total non-current assets                                                    29 644,7       21 286,6   
Current assets                                                                                        
Inventories                                                                  4 100,9        3 292,0   
Receivables, prepayments and other current assets                            5 657,5        3 826,4   
Cash and cash equivalents                                                    6 018,6        3 313,5   
Total current assets                                                        15 777,0       10 431,9   
Total assets                                                                45 421,7       31 718,5   
SHAREHOLDERS' EQUITY                                                                                  
Share capital and share premium (including treasury shares)                  3 989,2        4 703,1   
Reserves                                                                    18 804,6       12 686,3   
Ordinary shareholders' equity                                               22 793,8       17 389,4   
Non-controlling interests                                                        5,1            8,7   
Total shareholders equity                                                  22 798,9       17 398,1   
LIABILITIES                                                                                           
Non-current liabilities                                                                               
Borrowings                                                                   8 923,5        6 254,1   
Deferred revenue                                                               139,5          143,6   
Deferred tax liabilities                                                       600,5          536,0   
Retirement benefit obligations                                                  94,0           66,4   
Total non-current liabilities                                                9 757,5        7 000,1   
Current liabilities                                                                                   
Trade and other payables                                                     4 174,6        2 929,2   
Borrowings*                                                                  8 152,7        4 127,1      
Other current liabilities                                                      533,8          241,9   
Derivative financial instruments                                                 4,2           22,1   
Total current liabilities                                                   12 865,3        7 320,3   
Total liabilities                                                           22 622,8       14 320,4   
Total equity and liabilities                                                45 421,7       31 718,5   
Number of shares in issue (net of treasury shares) (000)                    455 208        454 186   
Net asset value per share (cents)                                            5 007,3        3 828,7   
#See notes on Supplementary information.                                                             
*Bank overdrafts are included within borrowings under current liabilities.                                        


Group statement of cash flows
                                                                                2013          2012   
For the year ended 30 June 2013                                  Notes     Rmillion     Rmillion                                                                                                                            
CASH FLOWS FROM OPERATING ACTIVITES                                                                  
Cash operating profit                                                        5 960,1       4 746,0   
Changes in working capital                                                    (590,1)       (869,6)   
Cash generated from operations                                               5 370,0       3 876,4   
Net financing costs paid                                                      (584,6)       (513,9)   
Tax paid                                                                      (799,3)       (454,1)   
Cash generated from operating activities                                     3 986,1       2 908,4   
CASH FLOWS FROM INVESTING ACTIVITIES                                                                 
Capital expenditure - property, plant and equipment                           (667,1)       (469,6)   
Replacement                                                                   (161,7)       (102,9)   
Expansion                                                                     (505,4)       (366,7)   
Proceeds on the sale of property, plant and equipment                           10,7          36,5   
Capital expenditure - intangible assets                                     (3 654,9)     (2 148,8)   
Proceeds on the sale of intangible assets                                        3,5           2,8   
Acquisition of subsidiaries and businesses                          L#      (1 578,6)       (315,6)   
Increase in other non-current financial receivables                                -         (19,7)   
Proceeds on the sale of assets held-for-sale                        M#             -         250,4   
Prepayment in anticipation of acquisition                           N#        (394,7)            -   
Stamp duty on acquisitions                                                      (2,1)            -   
Net investment hedge profit in Aspen Asia Pacific                                  -           6,8   
Capital funding from non-controlling interests                                     -           0,9   
Cash used in investing activities                                           (6 283,2)     (2 656,3)   
CASH FLOWS FROM FINANCING ACTIVITIES                                                                 
Net proceeds from borrowings                                                 4 336,0         138,3   
Dividends paid                                                                  (0,2)         (2,0)   
Proceeds from issue of ordinary share capital                                    9,6          25,1   
Treasury shares purchased                                                      (21,1)        (19,3)   
Capital distribution                                                          (714,9)       (457,6)   
Decrease in cash restricted for use as security for 
borrowings                                                                       1,3          27,2   
Cash generated from/(used in) financing activities                           3 610,7        (288,3)   
MOVEMENT IN CASH AND CASH EQUIVALENTS BEFORE TRANSLATION 
EFFECTS OF FOREIGN OPERATIONS                                                1 313,6         (36,2)   
Translation effects on cash and cash equivalents of foreign 
operations                                                                     112,8         273,2   
CASH AND CASH EQUIVALENTS                                                                    
Movement in cash and cash equivalents                                        1 426,4         237,0   
Cash and cash equivalents at the beginning of the year                       1 989,8       1 752,8   
Cash and cash equivalents at the end of the year                             3 416,2       1 989,8   
                                                                Change                                        
Diluted operating cash flow per share (cents)                                                        
From continuing operations                                         37%         874,1         638,6   
From discontinued operations                                                       -           0,4   
                                                                   37%         874,1         639,0   
THE ABOVE INCLUDES DISCONTINUED OPERATIONS OF:                                                       
Cash generated from operating activities                                           -           1,7   
Cash and cash equivalents per the statement of cash flows                          -           1,7   
RECONCILIATION OF CASH AND CASH EQUIVALENTS                                                           
Cash and cash equivalents per the statement of financial 
position                                                                     6 018,6       3 313,5   
Less: bank overdrafts                                                       (2 602,4)     (1 323,7)   
                                                                             3 416,2       1 989,8   
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash-on-hand, 
deposits held on call with banks less bank overdrafts.                                        
#See notes on Supplementary information.                                                                                      


Group statement of comprehensive income
                                                                                            2013          2012   
For the year end 30 June 2013                                     Notes    Change      Rmillion     Rmillion                                                                                                              
CONTINUING OPERATIONS                                                                                            
Revenue                                                                       27%       19 308,0      15 255,8   
Cost of sales                                                                          (10 077,3)     (7 979,5)   
Gross profit                                                                  27%        9 230,7       7 276,3   
Selling and distribution expenses                                                       (2 343,5)     (1 967,4)   
Administrative expenses                                                                 (1 366,0)     (1 101,8)   
Other operating income                                                                     104,2         218,9   
Other operating expenses                                                                  (582,1)       (485,4)   
Operating profit                                                     B#       28%        5 043,3       3 940,6   
Investment income                                                    C#                    298,8         275,4   
Financing costs                                                      D#                   (852,7)       (776,0)   
Profit before tax                                                             31%        4 489,4       3 440,0   
Tax                                                                                       (975,3)       (772,3)   
Profit after tax from continuing operations                                              3 514,1       2 667,7   
DISCONTINUED OPERATIONS                                                                                          
Profit after tax for the year from discontinued operations           E#                        -         159,2   
Profit for the year                                                           24%        3 514,1       2 826,9   
OTHER COMPREHENSIVE INCOME, NET OF TAX*                                                                          
Currency losses on net investment in Aspen Asia Pacific                                   (133,3)        (53,3)   
Net investment hedge profit in Aspen Asia Pacific                                              -           6,8   
Currency translation gains                                                               2 675,7       1 494,4   
Cash flow hedges recognised                                                                 20,3          32,6   
Remeasurement of retirement benefit obligations                                             (4,7)            -   
Total comprehensive income                                                               6 072,1       4 307,4   
Profit for the year attributable to                                                                              
Equity holders of the parent                                                             3 520,1       2 817,8   
Non-controlling interests                                                                   (6,0)          9,1   
                                                                                         3 514,1       2 826,9   
Total comprehensive income attributable to                                                                       
Equity holders of the parent                                                             6 078,2       4 295,4   
Non-controlling interests                                                                   (6,1)         12,0   
                                                                                         6 072,1       4 307,4   
Weighted average number of shares in issue ('000)                                        455 397       436 303   
Diluted weighted average number of shares in issue ('000)                                456 027       455 161   
EARNINGS PER SHARE                                                                                               
Basic earnings per share (cents)                                                                                 
 From continuing operations                                                   27%          773,0         609,3   
 From discontinued operations                                                                  -          36,5   
                                                                              20%          773,0         645,8   
Diluted earnings per share (cents)                                                                               
 From continuing operations                                                   31%          771,9         588,2   
 From discontinued operations                                                                  -          35,0   
                                                                              24%          771,9         623,2   
CAPITAL DISTRIBUTION                                                                                             
Capital distribution per share (cents)                                                     157,0         105,0   
The capital distribution of 157,0 cents relates to the distribution declared on 12 September 2012 and paid on 
15 October 2012. (The capital distribution of 105,0 cents relates to the distribution declared on 
13 September 2011 and paid on 17 October 2011).                                                   
* Remeasurement of retirement benefit obligations will not be reclassified to profit and loss. All other items 
  in other comprehensive income may be reclassified to profit and loss.                                                   


Group statement of headline earnings
                                                                                            2013          2012   
For the year ended 30 June 2013                                            Change      Rmillion     Rmillion                                                                                                              
HEADLINE EARNINGS                                                                                                
Reconciliation of headline earnings                                                                              
Profit attributable to equity holders of the parent                           25%        3 520,1       2 817,8   
Adjusted for:                                                                                                    
Continuing operations                                                                                            
- Impairment of goodwill (net of tax)                                                          -          43,6   
- Net impairment of property, plant and equipment (net of tax)                               9,5          25,2   
- Net impairment of intangible assets (net of tax)                                          60,4         107,9   
- Profit on the sale of tangible and intangible assets (net of tax)                         (1,6)         (0,7)   
Discontinued operations                                                                                          
- Profit on the sale of the personal care products in                                              
  South Africa (net of tax)                                                                    -         (35,6)   
- Profit on the sale of the Campos facility and                                                    
  related products in Brazil (net of tax)                                                      -        (121,9)   
                                                                              27%        3 588,4       2 836,3   
Headline earnings                                                                                                
From continuing operations                                                    27%        3 588,4       2 834,6   
From discontinued operations                                                                   -           1,7   
                                                                              27%        3 588,4       2 836,3   
Headline earnings per share (cents)                                                                              
From continuing operations                                                    21%          788,0         649,7   
From discontinued operations                                                                   -           0,4   
                                                                              21%          788,0         650,1   
Diluted headline earnings per share (cents)                                                                      
From continuing operations                                                    26%          786,9         626,9   
From discontinued operations                                                                   -           0,4   
                                                                              25%          786,9         627,3   
NORMALISED HEADLINE EARNINGS                                                                                     
Reconciliation of normalised headline earnings                                                                   
Headline earnings                                                             27%        3 588,4       2 836,3   
Adjusted for:                                                                                                    
Continuing operations                                                                                            
- Restructuring costs (net of tax)                                                         106,2          52,0   
- Transaction costs (net of tax)                                                            82,0          24,8   
- Settlement of product litigation (net of tax)                                             36,6             -   
- Foreign exchange gain on transaction funding (net of tax)                                    -         (34,5)   
                                                                              32%        3 813,2       2 878,6   
Normalised headline earnings                                                                                     
From continuing operations                                                    33%        3 813,2       2 876,9   
From discontinued operations                                                                   -           1,7   
                                                                              32%        3 813,2       2 878,6   
Normalised headline earnings per share (cents)                                                                   
From continuing operations                                                    27%          837,3         659,4   
From discontinued operations                                                                   -           0,4   
                                                                              27%          837,3         659,8   
Normalised diluted headline earnings per share (cents)                                                           
From continuing operations                                                    31%          836,2         636,2   
From discontinued operations                                                                   -           0,4   
                                                                              31%          836,2         636,6   


Group statement of changes in equity
                                                      Share capital and                                                       
                                                          share premium                                   Total attributable 
                                                             (including              Preference shares -   to equity holders   Non-controlling               
                                                        treasury shares)   Reserves     equity component       of the parent         interests       Total   
For the year ended 30 June 2013                               Rmillion   Rmillion            Rmillion           Rmillion         Rmillion   Rmillion                                                                                                                                                                                                        
BALANCE AT 1 JULY 2011                                          4 776,2     8 288,0                162,0            13 226,2              61,1    13 287,3   
Total comprehensive income                                            -     4 295,4                    -             4 295,4              12,0     4 307,4   
Profit for the year                                                   -     2 817,8                    -             2 817,8               9,1     2 826,9   
Other comprehensive income                                            -     1 477,6                    -             1 477,6               2,9     1 480,5   
Capital distribution                                             (457,6)          -                    -              (457,6)                -      (457,6)  
Subsidiary capital reduction                                          -         1,0                    -                 1,0                 -         1,0   
Acquisition of non-controlling 
interests in subsidiaries                                             -      (117,3)                   -              (117,3)            (64,3)     (181,6)  
Capital funding from non-controlling interests                        -           -                    -                   -               0,9         0,9   
Dividends paid                                                        -           -                    -                   -              (2,0)       (2,0)  
Issue of ordinary share capital                                   401,9           -                    -               401,9                 -       401,9   
Issue of ordinary share capital - share schemes                    25,1           -                    -                25,1                 -        25,1   
Issue of ordinary share capital - preference shares               376,8           -                    -               376,8                 -       376,8   
Treasury shares purchased                                         (19,3)          -                    -               (19,3)                -       (19,3)  
Deferred incentive bonus shares exercised                          1,9        (1,9)                   -                   -                 -           -   
Share options and appreciation rights expensed 
(including deferred incentive bonus)                                  -        24,5                    -                24,5                 -        24,5   
Equity portion of tax claims in respect 
of share schemes                                                      -        30,6                    -                30,6                 -        30,6   
Conversion of preference shares                                       -       162,0               (162,0)                  -                 -           -   
Hyperinflationary adjustment - Venezuela                              -         4,0                    -                 4,0               1,0         5,0   
BALANCE AT 30 JUNE 2012                                         4 703,1    12 686,3                    -            17 389,4               8,7    17 398,1   
Total comprehensive income                                            -     6 078,2                    -             6 078,2              (6,1)    6 072,1   
Profit for the year                                                   -     3 520,1                    -             3 520,1              (6,0)    3 514,1   
Other comprehensive income                                            -     2 558,1                    -             2 558,1              (0,1)    2 558,0   
Capital distribution                                             (714,9)          -                    -              (714,9)                -      (714,9)  
Stamp duty on acquisitions                                            -        (2,1)                   -                (2,1)                -        (2,1)  
Dividends paid                                                        -           -                    -                   -              (0,2)       (0,2)  
Issue of ordinary share capital - share schemes                     9,6           -                    -                 9,6                 -         9,6   
Treasury shares purchased                                         (21,1)          -                    -               (21,1)                -       (21,1)  
Deferred incentive bonus shares exercised                         12,5       (12,5)                   -                   -                 -           -   
Share options and appreciation rights expensed 
(including deferred incentive bonus)                                  -        20,0                    -                20,0                 -        20,0   
Equity portion of tax claims in respect 
of share schemes                                                      -        23,8                    -                23,8                 -        23,8   
Hyperinflationary adjustment - Venezuela                              -        10,9                    -                10,9               2,7        13,6   
BALANCE AT 30 JUNE 2013                                         3 989,2    18 804,6                    -            22 793,8               5,1    22 798,9  
                                                                                             
   
Group segmental analysis
                                                                               2013                        2012                              
For the year ended 30 June 2013                                       Rmillion    % of total     Rmillion    % of total    Change                                                                                                                                     
REVENUE FROM CONTINUING OPERATIONS                                                                                                    
South Africa^                                                           7 376,8            35       6 159,9            38       20%   
Asia Pacific                                                            7 590,5            37       6 021,0            37       26%   
International@                                                          3 726,1            18       2 522,9            15       48%   
Sub-Saharan Africa                                                      2 081,5            10       1 651,7            10       26%   
Total gross revenue                                                    20 774,9           100      16 355,5           100       27%   
 Adjustment*                                                           (1 466,9)                   (1 099,7)                           
Total revenue                                                          19 308,0                    15 255,8                     27%   
OPERATING PROFIT BEFORE AMORTISATION FROM CONTINUING OPERATIONS                                                                       
Adjusted for specific non-trading items ("EBITA")                                                                                     
South Africa                                                            1 965,3            35       1 768,4            40       11%   
 Operating profit#                                                      1 867,5                     1 616,2                     16%   
 Amortisation of intangible assets                                         60,5                        66,8                           
 Transaction costs                                                         31,3                           -                           
 Restructuring costs                                                          -                         3,4                           
 Impairment of assets                                                       6,0                        82,0                           
Asia Pacific                                                            1 894,0            34       1 460,2            33       30%   
 Operating profit#                                                      1 608,2                     1 291,6                     25%   
 Amortisation of intangible assets                                        128,0                       100,2                           
 Transaction costs                                                          6,0                           -                           
 Restructuring costs                                                      151,8                        68,4                           
International                                                           1 488,7            27         938,5            21       59%   
 Operating profit#                                                      1 321,7                       790,9                     67%   
 Amortisation of intangible assets                                         60,8                        41,1                           
 Settlement of product litigation                                          43,0                           -                           
 Impairment of assets                                                      63,2                       106,5                           
Sub-Saharan Africa                                                        252,3             4         247,9             6        2%   
 Operating profit#                                                        245,9                       241,9                      2%   
 Amortisation of intangible assets                                          6,4                         4,2                           
 Restructuring costs                                                          -                         1,7                           
 Impairment of assets                                                         -                         0,1                                                                                                                                                                 
Total EBITA                                                             5 600,3           100       4 415,0           100       27%   
ENTITY WIDE DISCLOSURE - REVENUE FROM CONTINUING OPERATIONS                                                                           
Analysis of revenue in accordance with customer geography                                                                             
South Africa - pharmaceutical                                           6 201,9            30       5 161,7            32       20%   
South Africa - consumer                                                 1 175,0             6         998,2             6       18%   
Asia Pacific                                                            7 697,6            37       6 088,8            37       26%   
Sub-Saharan Africa                                                      2 123,7            10       1 651,7            10       29%   
Latin America                                                           1 567,3             7       1 023,7             6       53%   
Rest of the world                                                       2 009,4            10       1 431,4             9       40%   
Total gross revenue                                                    20 774,9           100      16 355,5           100       27%   
Adjustment*                                                            (1 466,9)                   (1 099,7)                           
Total revenue                                                          19 308,0                    15 255,8                     27%   
^ Excludes intersegment revenue of R43,0 million (2012: R29,6 million).                                                                     
@ Excludes intersegment revenue of R1 201,5 million (2012: R432,3 million).                                                                    
* The profit share from the Aspen GSK Healthcare for Africa collaboration has been disclosed as revenue in the statement of 
  comprehensive income. For segmental purposes the total revenue for the Aspen GSK Healthcare for Africa collaboration has 
  been included to provide enhanced revenue visibility in this territory.                                                                                      
# The aggregate segmental operating profit total of R5 043,3 million (2012: R3 940,6 million) agrees to the statement of 
  comprehensive income.                                                                     


Group supplementary information
                                                                              2013           2012   
For the year ended 30 June 2013                                          Rmillion      Rmillion  
A. CAPITAL EXPENDITURE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Incurred                                                                   4 322,0        2 618,4   
- Tangible assets                                                            667,1          469,6   
- Intangible assets                                                        3 654,9        2 148,8   
Contracted                                                                   651,8          171,5   
- Tangible assets                                                            525,5          158,8   
- Intangible assets                                                          126,3           12,7   
Authorised but not contracted for                                          1 242,2        3 713,6   
- Tangible assets                                                          1 052,0          456,4   
- Intangible assets                                                          190,2        3 257,2   

B. OPERATING PROFIT HAS BEEN ARRIVED AT AFTER                                                       
CHARGING/(CREDITING):                                                                               
Depreciation of property, plant and equipment                                294,5          252,7   
Amortisation of intangible assets                                            255,7          212,3   
Net impairment of property, plant and equipment                                9,6           32,3   
Net impairment of intangible assets                                           59,6          112,7   
Impairment of goodwill                                                           -           43,6   
Share-based payment expenses - employees                                      31,2           31,5   
Transaction costs                                                             37,3              -   
Restructuring costs                                                          151,8           73,5   
Insurance compensation                                                           -          (63,0)   
Settlement of product litigation                                              43,0              -   

C. INVESTMENT INCOME                                                                                
Interest received                                                            298,8          275,4   

D. FINANCING COSTS                                                                                  
Interest paid                                                               (842,3)        (754,7)   
Capital raising fees                                                         (51,9)         (26,8)   
- Transactions                                                               (49,5)         (26,8)   
- Trading                                                                     (2,4)             -   
Net foreign exchange (losses)/gains                                          (34,3)           2,5   
Fair value gains on financial instruments                                     77,5           24,0   
Notional interest on financial instruments                                    (1,7)           2,1   
Preference share dividends paid                                                  -          (23,1)   
                                                                            (852,7)        (776,0)   
                                                                                                    
E. PROFIT AFTER TAX FOR THE YEAR FROM DISCONTINUED OPERATIONS                                       
Profit after tax for the year from discontinued operations                       -            1,7   
Profit on the sale of the Campos facility and related products in Brazil         -          121,9   
Profit on the sale of the personal care products in South Africa                 -           35,6   
                                                                                 -          159,2  
																				 
F. CURRENCY TRANSLATION MOVEMENTS                                                                                 
Currency translation movements on the translation of the offshore 
businesses is as a result of the difference between the weighted average 
exchange rate used for trading results and the closing exchange rate 
applied in the statement of financial position. For the year the weaker 
closing Rand translation rate significantly increased the Group net 
asset value.

G. GOODWILL MOVEMENT                                                                                
Opening balance                                                            5 343,9        4 626,6   
Acquisition of subsidiaries                                                  176,5          104,3   
Impairment of goodwill                                                           -          (43,6)   
Translation of foreign operations                                            452,8          656,6   
                                                                           5 973,2        5 343,9
																		   
H. INTANGIBLE ASSETS MOVEMENT                                                                       
Opening balance                                                           11 869,8        8 916,7   
Additions                                                                  3 654,9        2 148,8   
GSK pharmaceutical products*                                               2 196,6              -   
Novartis pharmaceutical products#                                            459,5              -   
GSK OTC products^                                                            586,1        1 589,2   
Other                                                                        412,7          559,6   
Disposals                                                                     (0,5)          (2,8)   
Amortisation                                                                (255,7)        (212,3)   
Acquisition of subsidiaries                                                1 246,1            4,2   
Software projects implemented                                                 14,0           22,2   
Impairment                                                                   (94,5)        (112,7)   
Impairment losses reversed                                                    34,9              -   
Hyperinflationary adjustment - Venezuela                                       0,8            0,4   
Translation of foreign operations                                          2 463,2        1 105,3   
                                                                          18 933,0       11 869,8  																		  
* The transaction relating to the acquisition of a portfolio of 25 established pharmaceutical 
  products from GSK for the Australian market became effective on 1 December 2012.                                                                                                                                                                                                                                                                                                                                                                                                 
# A selected territory agreement with Novartis Pharma AG for the acquisition of two pharmaceutical
  products, Enablex and Tofranil, became effective on 1 August 2012.                                                                                                                                                                                                                                                                                                                                                                                                           
^ A multi-territory agreement was concluded with GSK in April 2012 for the acquisition of a 
  portfolio of established OTC products in selected territories including South Africa, 
  Australia and Brazil. The leading products include recognised household brands such as 
  Phillips Milk of Magnesia, Dequadin, Solpadeine, Cartia, Zantac and Borstol. The deal was 
  effective 1 May 2012 except for certain markets which required competition authority approval: 
  South Africa, Swaziland, Namibia, Kenya, Tanzania and the product, Zantac, in Australia. 
  Competition authority approval was granted in Australia, South Africa and Swaziland during July
  and August 2012. Namibia, Kenya and Tanzania received competition authority approval in 
  September 2012, October 2012 and February 2013 respectively.

                                                                              2013           2012 
                                                                         Rmillion      Rmillion 
I. CONTINGENT LIABILITIES                                                                                                                                      
There are contingent liabilities in respect of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
Additional payments in respect of the Quit worldwide 
intellectual property rights                                                     -            8,1   
Contingency relating to product litigation                                    25,9           21,3   
Contingencies arising from labour cases                                        4,3            4,2   
Import duty contingency                                                       10,4           10,8   
Other contingent liabilities                                                   2,0            3,3   

J. TAX CONTINGENCY                                                                                                                                             
Following an audit, the South African Revenue Services (SARS) has issued
tax assessments on various South African companies relating to prior 
years. Aspen has objected to these assessments and has filed a review 
application to have the assessments set aside. Aspen is confident that 
it will succeed in this dispute based on the outcome of recent court 
cases dealing with similar matters. Due to the uncertainties inherent in
the process, the timing of the resolution of the dispute and the outcome
thereof cannot be determined.

K. GUARANTEES TO FINANCIAL INSTITUTIONS                                                                                                                        
Material guarantees given by Group companies for indebtedness of 
subsidiaries to financial institutions                                     5 600,6        5 003,0

L. ACQUISITION OF SUBSIDIARIES AND BUSINESSES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
2013                                                                                                                                                           
Aspen Global Incorporated and Aspen Asia Pacific (Pty) Ltd concluded agreements 
with Nestlé on 29 April 2013 in respect of the acquisition of certain rights to 
intellectual property licenses and 100% of the shares in the infant 
nutritionals business previously conducted by Pfizer which distributes a 
portfolio of infant nutritional products in Australia.                 
                                                                             Total   
                                                                         Rmillion                                                                                      
Fair value of assets and liabilities acquired in subsidiary                          
Property, plant and equipment                                                  1,7   
Intangible assets                                                          1 246,1   
Deferred tax                                                                   9,9   
Inventories                                                                   74,2   
Trade and other receivables                                                  294,5   
Trade and other payables                                                    (274,3)   
Fair value of net assets acquired                                          1 352,1   
Goodwill acquired                                                            176,5   
Purchase consideration                                                     1 528,6   
Deferred receivable                                                           50,0   
Cash outflow on acquisition                                                1 578,6   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
The initial accounting for this business combination has been reported on a 
provisional basis and will only be finalised in the year ending 30 June 2014. 
                                                                                                                                                                                                                                                                                                                                                                                                                     
Post-acquisition revenue included in the statement of comprehensive income was R137.3 million. 
The estimation of post-acquisition operating profits  is impracticable and not reasonably determinable 
as the operations of the infant nutritionals business have not yet fully transitioned to Aspen. 
The determination and disclosure of historical audited revenue and operating profits for the 12 months 
preceding the effective date is not possible as the information for the full period is not available.                                                                                  

Goodwill                                                                                                                                                       
The goodwill arising on acquisition of the infant nutritionals business recognises:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
- the future benefits of rebranding rights on the existing and future infant milk 
  product range; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
- the synergies from the consolidation of the infant milk business with Aspens 
  existing Australian consumer business including cost savings and increased 
  sales force coverage benefits.                                                                                                                                                                                                                                                                                                                                                                                     
The total amount of goodwill recognised is not tax deductible.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

2012                                                                                                                                                           
Aspen Pharmacare Holdings Ltd acquired the remaining 40% minority shareholding in 
Shelys Africa Ltd effective from 14 April 2012. This increased the ownership in 
Shelys Africa Ltd to 100%.                                                                                                                                                                                                                                                                                                                                                                                   
Aspen Pharmacare Holdings Ltd acquired a further 42,5% shareholding in Brimpharm 
SA (Pty) Ltd effective from 31 May 2012. This increased the ownership in Brimpharm 
SA (Pty) Ltd to 92,5%.    
                                    
                                                                                   Total   
                                                                               Rmillion                                                                                           
Shelys Africa Ltd purchase consideration                                           141,8   
Brimpharm SA (Pty) Ltd purchase consideration                                       39,8   
AHN Pharma (Pty) Ltd purchase consideration                                         45,4   
Final payment for the Sigma business                                                88,6   
As per the statement of cash flows                                                 315,6   
                                                                                           
                                                                     2013           2012   
                                                                Rmillion      Rmillion                                                                                         
M. PROCEEDS FROM SALE OF ASSETS HELD FOR SALE                                              
Campos facility and related products in Brazil                          -          175,0   
Personal care products in South Africa                                  -           75,4   
                                                                        -          250,4  
																		
N. PREPAYMENT IN ANTICIPATION OF ACQUISITION                                                                                                                   
Aspen Pharmacare Holdings Ltd concluded agreements with Nestlé S.A. in respect of the acquisition of certain rights to 
intellectual property licenses, net assets and shares in the infant nutritionals businesses previously conducted by Pfizer 
which distribute a portfolio of infant nutritional products in Australia and certain southern African territories 
(South Africa, Botswana, Namibia, Lesotho, Swaziland and Zambia). The consideration for all territories was paid following 
approval by the Australian competition authorities on 29 April 2013. The approval from the South African competition authority 
remains pending and consequently the purchase consideration payment relating to the southern African territories has been classified 
as a prepayment.                                                                                           

Basis of accounting
The reviewed provisional Group financial results have been prepared in accordance with International Financial Reporting Standards, 
IFRIC interpretations, the Listings Requirements of the JSE Ltd, South African Companies Act, 2008 and the presentation and disclosure 
requirements of IAS 34: Interim Reporting.

The accounting policies used in the preparation of these reviewed provisional Group financial results are consistent with those used 
in the annual financial statements for the year ended 30 June 2012.


* These reviewed provisional Group financial results have been prepared under the supervision of the Deputy Group Chief Executive, 
MG Attridge, CA (SA) and approved by the Board of Directors.

Audit review
These results have been reviewed by Aspens auditors, PricewaterhouseCoopers Inc.  Their unqualified review report is
available for inspection at the companys registered office. Any reference to future financial performance included in this 
announcement, has not been reviewed or reported on by the companys auditor.

Directors: N J Dlamini (Chairman)*, R C Andersen*#, M G Attridge, M R Bagus*#, J F Buchanan*#, D K Dlamini*#, 
S A Hussain*, C N Mortimer*, S B Saad, S V Zilwa*#  /  *Non-executive director  /  # Independent

Company Secretary: R Verster    
There have been no changes in the directorate and company secretary of Aspen during the reporting period

Registered office: Building number 8, Healthcare Park, Woodlands Drive, Woodmead
PO Box 1587, Gallo Manor, 2052
Telephone 011 239 6100
Telefax 011 239 6144 
  
Transfer secretary: Computershare Investor Services (Pty) Ltd  /  (Registration number 2004/003647/07)
70 Marshall Street, Johannesburg, 2001. (PO Box 1053, Johannesburg, 2001).

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 "prospects", 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 years 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.

www.aspenpharma.com
Date: 11/09/2013 12:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story