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APN
APN
APN - Aspen Pharmacare Holdings Limited - Unaudited interim financial results
for the six months ended 31 December 2010
Aspen Pharmacare Holdings Limited ("Aspen")
(Registration number 1985/002935/06)
Share code: APN ISIN: ZAE000066692
Unaudited interim financial results for the six months ended
31 December 2010
- Revenue up 33% from continuing operations
- Headline earnings up 35% from continuing operations
- Headline earnings per share up 15% from continuing operations
- Sigma transaction completed
Commentary
GROUP PERFORMANCE
Aspen increased headline earnings from continuing operations by 35% to R1,147
billion in the six months ended 31 December 2010. Revenue from continuing
operations was up 33% to R5,990 billion and operating profit from continuing
operations grew 28% to R1,614 billion. Headline earnings per share from
continuing operations improved 15% to 265,3 cents. The rise in headline
earnings per share was diluted by an increase in the weighted average number of
shares in issue as a consequence of the issue of shares on 1 December 2009 in
settlement of the transaction with GlaxoSmithKline ("GSK") concluded on that
date.
SOUTH AFRICAN BUSINESS
The South African business increased revenue by 29% to R3,300 billion and
improved operating profit by 23% to R0,996 billion. The pharmaceutical division
led the growth in revenue raising sales by 36% to R2,682 billion. Consumer
division sales were up 8% to R0,618 billion. Profit margins benefited from
production efficiencies, procurement savings and the strength of the Rand. The
higher insurance compensation received in the prior period inflated the
comparative profit margin for that period.
The pharmaceutical business grew ahead of the market in the private sector,
increasing Aspen`s share as measured by IMS to 16,7%. Aspen remains the leader
in generic pharmaceutical supply and has also taken the top position in the
branded product segment with the successful integration of the GSK business.
Sales of the GSK products for the six months to 31 December 2010 were R463
million against R53 million from one month of sales in the prior period. In the
recently adjudicated anti-retroviral ("ARV") tender, Aspen was awarded 41% by
value of the anticipated ARV requirements of the South African government over a
two year period. This validates the cost competitiveness of the Group`s
production capabilities.
There has been ongoing investment in the manufacturing capabilities of the Group
in South Africa. Most capital projects are well advanced. The focus of these
projects has been adding capacity, enhancing technical standards and improving
efficiency.
SUB-SAHARAN AFRICA BUSINESS
Revenue in the sub-Saharan Africa business more than doubled from R279 million
to R666 million due to the full period contribution from the GSK Aspen
Healthcare for Africa collaboration. Operating profit followed a similar trend,
growing from R41 million to R119 million. Performance at Shelys, Aspen`s 60%
owned subsidiary in East Africa, improved on the unsatisfactory showing in the
second half of the 2010 financial year.
INTERNATIONAL BUSINESS
The international business increased revenue by 39% to R2,423 billion. Revenue
benefited by R600 million (2009: R108 million) from the inclusion of the brands
and the Bad Oldesloe production facility acquired from GSK in December 2009 for
the full period. All territories contributed to the growth. Asia Pacific
revenue was up 28% to R957 million, Latin America revenue was up 20% to R599
million and revenue in the Rest of the World region was up 76% to R867 million.
Operating profit before amortisation and once-off items rose 27% to R551
million. Margins in the International business narrowed, primarily as a
consequence of the cost of transitioning products recently acquired from GSK to
Aspen`s global distribution network which incorporates independent distributors.
The AUD 900 million (approximately R6,3 billion) acquisition of the
pharmaceutical business of Sigma, Australia`s largest listed pharmaceutical
company, completed on 31 January 2011. Integration of this business with Aspen
Australia is well underway and is progressing to plan.
FUNDING
Borrowings net of cash were reduced by almost R900 million to R2,147 billion due
in part to capital receipts and favourable foreign exchange movements. Gearing
at the period end was down to 18%. Following the January settlement of the
purchase consideration of AUD 900 million paid to Sigma, gearing has increased
to around 40%.
Interest paid, net of interest received of R138 million, was covered 12 times by
operating profit before amortisation.
PROSPECTS
The South African pharmaceutical business has strengthened its position as the
market leader over the past period. The fundamental demand for medicines in the
country also remains strong. Performance in the second half of the year will
however be affected by the reduced value of the recent ARV tender award. The
Minister of Health has announced that no consideration will be given to an
increase in the Single Exit Price before the end of 2011.
The South African consumer business will be adversely affected by the ending in
April 2011 of the Pfizer infant milk license agreement which generated annual
sales of approximately R250 million. Pfizer has taken the decision to enter the
South African market itself following the acquisition of the infant milk
franchise as part of its take-over of Wyeth. Aspen has expanded its own infant
milk offering with the introduction of the Infacare Gold range in order to
replace the Pfizer brands.
The sub-Saharan African business is on a firm footing and the positive
performance of the first half of the year should be maintained in the second
half.
The Asia Pacific region of the International business is set for strong growth
as the Sigma pharmaceutical business is integrated into Aspen Australia. The
earnings per share impact for this financial year is likely to be close to
neutral due to the expensing of transaction fees, stamp duties and restructuring
costs expected to exceed R100 million. In years thereafter the transaction is
anticipated to be earnings accretive as synergistic benefits are realised.
The International business will continue to transition products acquired from
GSK to the Aspen global distribution network. Once complete, the Group will be
well positioned to realise procurement and marketing opportunities with these
brands.
At a time where there are heightened tensions in currency markets results could
be influenced by exchange rate movements.
The Group remains well placed for growth in the medium term. The launch of new
products from the extensive product pipeline will provide organic growth across
all major markets. The expanded business in the Asia Pacific region is expected
to provide further growth momentum. Latin America remains a core focus area for
the Group as a region with great potential. Opportunities to add to the
portfolio of global brands will be actively pursued.
By order of the Board
N J Dlamini S B Saad
Chairman Group Chief Executive
Woodmead - 3 March 2011
Group statement of comprehensive income
Unaudited
Unaudited restated Audited
six months six months year
ended ended ended
31 December 31 December 30 June
% 2010 2009 2010
change Rm Rm Rm
Continuing operations
Revenue 33 5 989,8 4 519,3 10 146,6
Cost of sales (3 380,9) (2 441,0) (5 542,3)
Gross profit 26 2 608,9 2 078,3 4 604,3
Selling and distribution (663,7) (538,3) (1 189,4)
expenses
Administrative expenses (359,9) (368,4) (736,0)
Other operating income 108,4 150,4 179,9
Other operating expenses (79,8) (61,9) (243,9)
Operating profit B# 28 1 613,9 1 260,1 2 614,9
Investment income C# 127,8 90,6 187,9
Financing costs D# (251,4) (264,0) (558,3)
1 490,3 1 086,7 2 244,5
Share of after-tax net - (1,4) (1,7)
losses of associates
Profit before tax 37 1 490,3 1 085,3 2 242,8
Tax (323,3) (238,9) (467,5)
Profit after tax from 38 1 167,0 846,4 1 775,3
continuing operations
Discontinued operations
Profit for the - 42,2 203,2
period/year from
discontinued operations
Profit for the 31 1 167,0 888,6 1 978,5
period/year
Other comprehensive
income
Amounts recognised in 95,7 - -
equity due to hedge
accounting of
acquisitions
Onco Therapies Ltd - - 0,8
transaction
Currency translation E# (631,7) (37,1) (25,1)
differences
Cash flow hedges 51,8 (5,1) (4,8)
realised
Total comprehensive 682,8 846,4 1 949,4
income
Profit for the
period/year attributable
to:
Equity holders of the 1 154,8 883,0 1 989,6
parent
Non-controlling 12,2 5,6 (11,1)
interests
31 1 167,0 888,6 1 978,5
Total comprehensive
income for the
period/year attributable
to:
Equity holders of the 672,5 840,8 1 969,3
parent
Non-controlling 10,3 5,6 (19,9)
interests
682,8 846,4 1 949,4
Weighted average number 432 354 367 037 401 987
of shares in issue
(`000)
Basic earnings per share
(cents)
From continuing 17 267,1 229,1 444,4
operations
From discontinued - 11,5 50,5
operations
11 267,1 240,6 494,9
Diluted earnings per
share (cents)
From continuing 17 256,0 218,8 427,0
operations
From discontinued - 10,8 47,7
operations
11 256,0 229,6 474,7
#See notes on
Supplementary
information.
Headline earnings
Reconciliation of headline
earnings
Profit attributable to 1 154,8 883,0 1 989,6
equity holders of the parent
Adjusted for:
Continuing operations
- (Profit) / loss on (18,1) 1,6 2,5
disposal of tangible and
intangible assets (net of
tax)
- Net impairment of 21,5 11,1 68,4
intangible assets (net of
tax)
- Impairment of property, - 0,7 25,3
plant and equipment (net of
tax)
- Impairment of deferred - - 17,1
receivable (net of tax)
- Insurance compensation - (3,6) (27,7) (27,7)
capital component
- Capital gains tax on - 20,7 20,7
transfer of intellectual
property rights
- Profit on the sale of Co- (7,5) - -
Pharma Ltd (net of tax)
Discontinued operations
- Profit on the sale of Onco
Therapies Ltd
(net of tax) - - (154,7)
Headline earnings 2 1 147,1 889,4 1 941,2
9
Headline earnings
From continuing operations 3 1 147,1 847,2 1 892,7
5
From discontinued operations - 42,2 48,5
2 1 147,1 889,4 1 941,2
9
Headline earnings per share
(cents)
From continuing operations 1 265,3 230,8 470,8
5
From discontinued operations - 11,5 12,1
9 265,3 242,3 482,9
Headline earnings per share
- diluted (cents)
From continuing operations 1 254,3 220,5 452,0
5
From discontinued operations - 10,7 11,4
1 254,3 231,2 463,4
0
Capital distribution
Capital distribution per 70,0 - -
share (cents)
The capital distribution
relates to the distribution
declared on
15 September 2010 and paid
on 11 October 2010.
Group statement of cash flows
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
Rm Rm Rm
Cash flows from operating
activities
Cash operating profit 1 808,4 1 482,0 3 269,5
Changes in working capital (875,0) (316,5) (344,4)
Cash generated from 933,4 1 165,5 2 925,1
operations
Net financing costs paid (119,3) (189,5) (427,1)
Tax paid (126,7) (185,2) (465,0)
Cash generated from 687,4 790,8 2 033,0
operating activities#
Cash flows from investing
activities
Capital expenditure - (309,5) (243,9) (632,0)
property, plant and
equipment
Proceeds on disposal of 11,0 1,0 9,8
tangible assets
Capital expenditure - (78,1) (155,4) (660,5)
intangible assets
Proceeds on disposal of 32,9 - 0,3
intangible assets
Acquisition and disposal of
subsidiary
and joint ventures (2,6) 32,4 307,5
Increase in non-current (6,6) (0,1) (27,1)
financial receivables
Net hedging inflow from the 69,1 - -
Sigma transaction
Advance payments received on 616,1 - -
held for sale assets
Payment of outstanding - (9,2) (18,7)
Oncology business purchase
consideration
Cash generated from/(used 332,3 (375,2) (1 020,7)
in) investing activities
Cash flows from financing
activities
Net proceeds from/(repayment 430,7 (65,6) (478,0)
of) borrowings
Repayment of deferred- - (0,7) (0,7)
payables
Capital distribution (302,9) - -
Dividend paid (1,7) (0,8) (0,8)
Proceeds from issue of 7,4 12,0 16,1
ordinary shares
Acquisition of treasury (20,1) - (13,5)
shares
Increase in cash restricted (21,8) - (21,8)
for use as security for
borrowings
Cash generated from/(used 91,8 (55,1) (498,7)
in) financing activities
Movement in cash and cash
equivalents before
translation effects of 1 111,5 360,5 513,6
foreign operations
Translation effects on cash (174,3) (42,6) (23,8)
and cash equivalents of
foreign operations
Cash and cash equivalents
Movement in cash and cash 937,2 317,9 489,8
equivalents
Cash and cash equivalents at
the beginning of the
period/year 1 812,7 1 322,9 1 322,9
Cash and cash equivalents at
the end of the
period/year 2 749,9 1 640,8 1 812,7
%
change
# Operating cash flow per
share (cents)
From continuing operations (20) 159,0 198,7 490,3
From discontinued operations - 16,8 15,4
(26) 159,0 215,5 505,7
The above includes
discontinued operations of:
Cash generated from - 61,8 61,8
operating activities
Cash used in investing - (62,3) (62,3)
activities
Translation effects on cash - 0,2 0,2
and cash equivalents of
foreign operations
Movement in cash and cash - (0,3) (0,3)
equivalents
Cash and cash equivalents at
the beginning of the
period/year - 0,3 0,3
Cash and cash equivalents
per the statement of
cash flows - - -
Reconciliation of cash and
cash equivalents
Cash and cash equivalents 3 809,5 1 959,5 2 939,8
per the statement of
financial position
Less: bank overdrafts (1 059,6) (318,7) (1 127,1)
Cash and cash equivalents
per the statement of
cash flows 2 749,9 1 640,8 1 812,7
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.
Group statement of financial position
Unaudited Unaudited Audited
31 December 31 December 30 June
2010 2009 2010
Rm Rm Rm
Assets
Non-current assets
Property, plant and equipment 2 833,0 2 952,3 3 012,4
Goodwill 456,4 688,2 456,1
Intangible assets F# 7 918,9 7 849,8 8 609,9
Non-current financial receivables 38,8 26,6 34,4
Deferred tax assets 69,5 46,8 65,5
Total non-current assets 11 316,6 11 563,7 12 178,3
Current assets
Inventories 2 140,2 2 169,2 2 041,4
Receivables, prepayments and 2 774,9 2 424,1 2 359,5
other current assets
Assets classified as held for 558,2 - 260,1
sale
Cash restricted for use 43,6 - 21,8
Cash and cash equivalents 3 809,5 1 959,5 2 939,8
Total current assets 9 326,4 6 552,8 7 622,6
Total assets 20 643,0 18 116,5 19 800,9
Shareholders` equity
Share capital and premium 4 773,4 5 097,4 5 089,0
(including treasury shares)
Reserves 6 263,0 4 367,3 5 580,0
Ordinary shareholders` equity 11 036,4 9 464,7 10 669,0
Equity component of preference 162,0 162,0 162,0
shares
Non-controlling interests 63,8 85,9 55,2
Total shareholders` equity 11 262,2 9 712,6 10 886,2
Liabilities
Non-current liabilities
Preference shares - liability 383,9 389,6 386,6
component
Borrowings 2 446,4 3 051,5 2 260,2
Retirement benefit obligations 15,4 12,5 15,4
Deferred revenue and other non- 152,6 171,4 159,4
current liabilities
Deferred tax liabilities 262,8 195,7 263,2
Total non-current liabilities 3 261,1 3 820,7 3 084,8
Current liabilities
Trade and other payables 2 314,9 1 814,5 1 913,9
Borrowings 3 510,5 2 427,6 3 720,8*
Derivative financial instruments 91,9 170,6 143,2
Other current liabilities 202,4 170,5 52,0
Total current liabilities 6 119,7 4 583,2 5 829,9
Total liabilities 9 380,8 8 403,9 8 914,7
Total equity and liabilities 20 643,0 18 116,5 19 800,9
Number of shares in issue (net of 433 300 431 591 431 407
treasury shares) (`000)
Net asset value per share (cents) 2 547,1 2 193,0 2 473,1
*Bank overdrafts are included within borrowings under current liabilities.
#See notes on Supplementary information.
Group statement of changes in equity
Share capital Reserves Equity
and premium component
(including of
treasury shares) preference
shares
Rm Rm Rm
Balance at 30 June 2009 509,8 3 515,3 162,0
Total comprehensive income - 1 969,3 -
Profit for the year - 1 989,6 -
Other comprehensive income - (20,3) -
Dividend paid - - -
Issue of ordinary share capital 4 592,8 - -
Shares issued - share schemes 17,0 - -
Shares issued - GSK 4 575,8 - -
Treasury shares purchased (13,5) - -
Treasury shares cancelled (0,1) 0,1 -
Share options and appreciation - 25,4 -
rights expensed (including
deferred incentive bonus)
Equity portion of tax claims in - 56,2 -
respect of share schemes
Hyperinflationary adjustment - - 13,7 -
Venezuela
Balance at 30 June 2010 5 089,0 5 580,0 162,0
Total comprehensive income - 672,5 -
Profit for the period - 1 154,8 -
Other comprehensive income - (482,3) -
Capital distribution (302,9) - -
Dividend paid - - -
Issue of ordinary share capital - 7,4 - -
share schemes
Treasury shares purchased (20,1) - -
Share options and appreciation - 10,5 -
rights expensed (including
deferred incentive bonus)
Balance at 31 December 2010 4 773,4 6 263,0 162,0
Group statement of changes in equity (continued)
Total
attributable to Non-
equity holders controlling
of the parent interests Total
Rm Rm Rm
Balance at 30 June 2009 4 187,1 75,9 4 263,0
Total comprehensive income 1 969,3 (19,9) 1 949,4
Profit for the year 1 989,6 (11,1) 1 978,5
Other comprehensive income (20,3) (8,8) (29,1)
Dividend paid - (0,8) (0,8)
Issue of ordinary share capital 4 592,8 - 4 592,8
Shares issued - share schemes 17,0 - 17,0
Shares issued - GSK 4 575,8 - 4 575,8
Treasury shares purchased (13,5) - (13,5)
Treasury shares cancelled - - -
Share options and appreciation 25,4 - 25,4
rights expensed (including deferred
incentive bonus)
Equity portion of tax claims in 56,2 - 56,2
respect of share schemes
Hyperinflationary adjustment - 13,7 - 13,7
Venezuela
Balance at 30 June 2010 10 831,0 55,2 10 886,2
Total comprehensive income 672,5 10,3 682,8
Profit for the period 1 154,8 12,2 1 167,0
Other comprehensive income (482,3) (1,9) (484,2)
Capital distribution (302,9) - (302,9)
Dividend paid - (1,7) (1,7)
Issue of ordinary share capital - 7,4 - 7,4
share schemes
Treasury shares purchased (20,1) - (20,1)
Share options and appreciation 10,5 - 10,5
rights expensed (including deferred
incentive bonus)
Balance at 31 December 2010 11 198,4 63,8 11 262,2
Segmental analysis
Unaudited
six months
ended
31 December 2010 %
Rm of total
Revenue from continuing operations
South Africa 3 300,1 52
Sub-Saharan Africa 666,1 10
International 2 422,5 38
Total gross revenue 6 388,7 100
Adjustment* (398,9)
Total revenue 5 989,8
Operating profit before amortisation
from continuing operations and other
specified adjustments
South Africa 1 013,7 61
Operating profit 996,2
Amortisation of intangible assets 25,1
Insurance compensation - capital (4,6)
component
Profit on sale of non-current assets (15,9)
Impairment of assets 12,9
Sub-Saharan Africa 110,8 7
Operating profit 118,6
Amortisation of intangible assets 1,4
Profit on sale of non-current assets (9,2)
Impairment of assets -
International 550,8 32
Operating profit 499,1
Amortisation of intangible assets 25,9
Transaction costs for acquisitions 18,8
Profit on sale of non-current assets (7,5)
Impairment of assets 14,5
1 675,3 100
Entity wide disclosure - revenue
Analysis of revenue in accordance with
customer geography
South Africa - pharmaceuticals 2 681,7 42
South Africa - consumer 618,4 10
Sub-Saharan Africa 666,1 10
Asia Pacific 956,8 15
Latin America 599,2 9
Rest of the world 866,5 14
Total gross revenue 6 388,7 100
Adjustment* (398,9)
Total revenue 5 989,8 100
*The profit share from the GSK Aspen Healthcare for Africa collaboration has
been disclosed as revenue in the statement of comprehensive income. For
segmental purposes the total revenue for the collaboration has been included to
provide enhanced revenue visibility in this territory.
Segmental analysis (continued)
Unaudited
restated
six
months
ended
31 % %
December
2009
Rm of total change
Revenue from continuing operations
South Africa 2 549,9 56 29
Sub-Saharan Africa 279,2 6 139
International 1 740,5 38 39
Total gross revenue 4 569,6 100 40
Adjustment* (50,3)
Total revenue 4 519,3 33
Operating profit before amortisation
from continuing operations and other
specified adjustments
South Africa 802,7 62 26
Operating profit 809,9 23
Amortisation of intangible assets 17,0
Insurance compensation - capital (38,5)
component
Profit on sale of non-current assets -
Impairment of assets 14,3
Sub-Saharan Africa 45,4 4 144
Operating profit 41,2 188
Amortisation of intangible assets 4,2
Profit on sale of non-current assets -
Impairment of assets -
International 434,6 34 27
Operating profit 409,0 22
Amortisation of intangible assets 25,6
Transaction costs for acquisitions -
Profit on sale of non-current assets -
Impairment of assets -
1 282,7 100 31
Entity wide disclosure - revenue
Analysis of revenue in accordance
with customer geography
South Africa - pharmaceuticals 1 975,4 43 36
South Africa - consumer 574,5 13 8
Sub-Saharan Africa 279,2 6 139
Asia Pacific 748,1 16 28
Latin America 499,7 11 20
Rest of the world 492,7 11 76
Total gross revenue 4 569,6 100 40
Adjustment* (50,3)
Total revenue 4 519,3 100 33
*The profit share from the GSK Aspen Healthcare for Africa collaboration has
been disclosed as revenue in the statement of comprehensive income. For
segmental purposes the total revenue for the collaboration has been included to
provide enhanced revenue visibility in this territory.
Segmental analysis (continued)
Audited
restated
year
ended
30 June 2010 %
Rm of total
Revenue from continuing operations
South Africa 5 652,1 53
Sub-Saharan Africa 910,0 9
International 4 053,3 38
Total gross revenue 10 615,4 100
Adjustment* (468,8)
Total revenue 10 146,6
Operating profit before amortisation
from continuing operations and other
specified adjustments
South Africa 1 632,2 58
Operating profit 1 587,9
Amortisation of intangible assets 45,3
Insurance compensation - capital (38,5)
component
Profit on sale of non-current assets -
Impairment of assets 37,5
Sub-Saharan Africa 72,3 3
Operating profit 66,4
Amortisation of intangible assets 4,2
Profit on sale of non-current assets -
Impairment of assets 1,7
International 1 114,0 39
Operating profit 960,6
Amortisation of intangible assets 52,4
Transaction costs for acquisitions -
Profit on sale of non-current assets -
Impairment of assets 101,0
2 818,5 100
Entity wide disclosure - revenue
Analysis of revenue in accordance with
customer geography
South Africa - pharmaceuticals 4 491,3 42
South Africa - consumer 1 160,8 11
Sub-Saharan Africa 910,0 9
Asia Pacific 1 468,2 14
Latin America 1 150,0 11
Rest of the world 1 435,1 13
Total gross revenue 10 615,4 100
Adjustment* (468,8)
Total revenue 10 146,6 100
*The profit share from the GSK Aspen Healthcare for Africa collaboration has
been disclosed as revenue in the statement of comprehensive income. For
segmental purposes the total revenue for the collaboration has been included to
provide enhanced revenue visibility in this territory.
Supplementary information
Unaudited
Unaudited restated Audited
six months six months year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
Rm Rm Rm
A. Capital expenditure
Incurred 387,6 4 857,1 5 750,3
- tangible assets 309,5 243,9 632,0
- GSK (tangible and intangible - 4 457,8 4 457,8
assets)
- intangible assets 78,1 155,4 660,5
Contracted
- tangible assets 52,1 172,2 61,4
- intangible assets 25,1 100,0 20,9
Authorised but not contracted
for
- tangible assets 164,4 301,8 502,8
- intangible assets - 421,2 33,6
B. Operating profit has been
arrived at after
charging/(crediting)
Depreciation of property, 96,1 72,6 167,8
plant and equipment
Amortisation of intangible 52,4 46,8 101,9
assets
Impairment of property, plant - - 37,6
and equipment
Impairment of intangible 27,4 14,3 85,5
assets
Share-based payment expenses - 12,1 16,4 29,8
employees (including deferred
incentive bonus)
Transaction costs for 18,8 - -
acquisitions
Insurance compensation (65,1) (144,7) (162,4)
C. Investment income
Interest received 127,8 90,6 187,9
D. Financing costs
Interest paid (266,2) (280,9) (553,0)
Net foreign exchange 39,7 25,1 (19,1)
gains/(losses)
Fair value (losses)/gains on (13,4) 7,0 37,9
financial instruments
Notional interest on financial 1,4 (0,9) 3,8
instruments
Preference share dividends (12,9) (14,3) (27,9)
paid
Financing costs (251,4) (264,0) (558,3)
E. Currency translation
differences
Currency translation differences arising on the translation of the
international 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. The average USD/Rand exchange rate for the six month
period was R7,08 (2009: R7,63) and closing rate was R6,65 (2009:
R7,39)
F. Intangible assets movement
Opening balance 8 609,9 4 103,6 4 103,6
Acquisition of subsidiary 22,4 - -
Additions - GSK - 3 808,4 4 054,9
Additions - other 78,1 155,4 660,5
Disposals (17,1) - (0,1)
Amortisation (52,4) (46,8) (101,9)
Effects of exchange rate (717,1) (161,7) 14,6
changes
Transferred to assets held for - - (51,8)
sale
Impairment of intangible (27,4) (14,3) (85,5)
assets
Other movements 22,5 5,2 15,6
Closing balance 7 918,9 7 849,8 8 609,9
G. Contingent liabilities
There are contingent
liabilities in respect of:
Additional payments in respect
of the Quit worldwide
intellectual property rights 6,6 7,4 7,6
Guarantees covering loan and 15,0 5,7 3,4
other obligations to third
parties
Tax duty contingencies 8,3 11,3 8,3
H. Guarantees to financial
institutions
Material guarantees given by 2 201,8 2 941,2 2 874,9
Group companies for
indebtedness of subsidiaries
to financial institutions
Subsequent events
Acquisition
On 14 January 2011 Aspen announced that all conditions precedent had been met
for the acquisition of the pharmaceutical business of Sigma on a debt-free basis
for a cash consideration of AUD 900 million (approximately R6,3 billion). The
transaction was completed on 31 January 2011.
Disposal
Onco Laboratories Ltd continued to be classified as held for sale as the
conditions precedent relating to the sale had not been fulfilled on 31 December
2010. These conditions were met in February 2011 and this transaction is now
complete.
Basis of accounting
The condensed interim financial results have been prepared in accordance with
IFRS, IAS 34 - Interim Financial Reporting, the Listings 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 2010.
The statement of comprehensive income and the segmental analysis for the six
months ended 31 December 2009 were restated to reclassify the Oncology business
as a discontinued operation ensuring consistently in line with the audited
financial statements at 30 June 2010, after agreement was reached to dispose of
the Oncology business in January 2009.
The segmental analysis for the year ended 30 June 2010 was restated to combine
the domestic and global brands as a result of the transition of a significant
portion of the global brands to Aspen`s global distribution network.
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
2011.
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 forwardlooking statements as defined in the U.S.
Private Securities Litigation Reform Act of 1995. Words such as "believe",
"anticipate", "expect", "intend", "seek", "will", "plan", "could", "may",
"endeavour" and "project" and similar expressions are intended to identify such
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 forwardlooking 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 Limited 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.
Directors: N J Dlamini (Chairman)*, R Andersen*, M G Attridge,
M R Bagus*, J F Buchanan*, S A Hussain*, C N Mortimer*,
D M Nurek*, S B Saad, S Zilwa*,
*Non-executive director
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
www.aspenpharma.com
Date: 03/03/2011 12:00:09 Produced by the JSE SENS Department.
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employees and agents accept no liability for (or in respect of) any direct,
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