Aspen interim results December 2018
Revenue for the interim period moved up by 1% to R19.7 billion (2017: R19.5 billion), gross profit grew 2% to R10.2 billion (2017: R10 billion) and operating profit was 6% lower at R4.4 billion (2017: R4.7 billion). Profit for the period attributable to equity holders of the parent declined to R2.9 billion (2017: R3.6 billion). In addition, headline earnings per share from continuing operations dropped by 14% to 676.5 cents per share (2017: 784.7 cents per share).
The pending completion of the Nutritionals disposal will allow complete focus on pharmaceuticals. Aspen has embarked on a strategic review of its European and South African Commercial Pharmaceuticals businesses. As an outcome of the first phase of the South African review it has been decided to split South African Commercial Pharmaceuticals into two distinct divisions in order to achieve heightened product and customer focus. The second phase of the review will concentrate on developing strategies specific to each division to optimise value delivery.
Any re-shaping of the Group will be aimed at driving sustainable organic growth with a strong emphasis on Emerging Markets. Achievement of the de-leveraging objectives will provide headroom for further investment in building Aspen's product portfolio of niche specialty pharma brands in Emerging Markets.
The Group's most promising pipeline opportunities in the short to medium term are with the women's health products that are being developed for launch in the USA. Aspen has reached a memorandum of understanding with a partner that is committed to building a women's health franchise in that country. The partner will distribute Aspen's pipeline products in this therapeutic area in the USA.
Normalised headline earnings from continuing operations (at CER) for the full year are expected to be in line with the percentage decline recorded in the first half. Given the diversity of currencies to which the Group is exposed, exchange rate volatility could influence reported results. Operating cash flows are cyclically stronger in the second half of the financial year and a conversion rate of operating profits to cash of between 90% and 100% is anticipated for the full financial year.