AFT Pharmaceuticals Limited (NZX: AFT) reaffirms guidance and progresses growth plan

Thursday 18th November 2021

FINANCIAL RESULTS

Revenue for the six months to 30 September 2021 grew 14% to $55.4 million from $48.8 million in the same period a year ago, led by International, New Zealand and Asia.

The rise also reflects strong growth in income from out-licensing Maxigesic, including income from the landmark US licensing agreement with Hikma Pharmaceuticals signed at the start of the half year period.

These gains were tempered by positive – albeit subdued growth - in Australia and slower product sales in international markets principally due to COVID-19 related disruptions, including delayed launches in international markets. Sales in the international business in the prior year were also lifted by stock pipeline fills that were not repeated in the current financial year but sales royalties have now increased consistent with increasing sell through during this period.

Operating profit more than doubled to $5.5 million from $2.4 million in the prior half year, lifted by high-margin licensing revenue and some price increases.

AFT also increased marketing investment in the company’s Australasian and Asian brands aimed at building or sustaining their leadership position in these markets and lifted research expenditure in R&D projects to drive long term growth in the business.

Net profit after tax more than tripled to $4.4 million from $1.2 million in the prior year with the increase reflecting improvements in operating profits and the benefits of lower finance charges.

The company remains well funded. Net debt at the end of the half year was $32.6 million, down from $35.2 million in March and $34.3 million at the same time a year ago. AFT reduced its overall working capital, whilst retaining Inventory at elevated levels in line with AFT’s position to protect itself from any ongoing supply chain disruptions which were foreseen 12 months ago.

A detailed discussion of the company’s financial performance for the half year period is detailed below and in an investor presentation released to the NZX and ASX this morning and available on AFT’s investor centre https://investors.aftpharm.com/Investors/

OUTLOOK

“Although there has clearly been an impact from COVID-19 on many aspects of our business especially the ability to travel and visit key partners and customers, we are nevertheless encouraged by reports showing an easing of COVID-19 restrictions in our most important markets around the world” Dr Atkinson said.

As they have opened, we have seen an improvement in sales after a slow period during the worst of the pandemic in Europe and an acceleration in the latter part of the six-month period”.

“The second half of the year is traditionally stronger for AFT Pharmaceuticals, and we expect no change to this trend in the current year, especially as there are a number of launches initially planned for the first half that have been delayed and will now take place in the second half of the year. These launches come atop additional line extensions and new product launches planned over the coming months.

“On this basis, our guidance for an operating profit for the year to 30 March 2020 remains at $18 million to $23 million.

“For these reasons, and assuming no material change to the current trading conditions, we remain confident of meeting this target.

“Finally, it remains our intention to consider a dividend policy once we have reached our net debt target of $25 million to $30 million level and our earnings guidance.

“We look forward to updating shareholders as the remainder of the year progresses.”

For and on behalf of AFT Pharmaceuticals Limited, Malcolm Tubby, CFO

Please see the links below for details

211118 AFT 1H FY22 Market Release

211118 AFT FY 22 Interim Result Investor Presentation

211118 AFT Interim Announcement FY2022 App2

211118 AFT Interim Financial Statements FY22

Source: AFT Pharmaceuticals Limited

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