| Wed 18 Aug 2004, 13:23 | | Financial Results For The Year Ended 30 June 04 |
|
Aspen - Reviewed Preliminary Group Financial Results For The Year Ended 30 June 2004 And Renewal Of Cautionary Announcement Aspen Pharmacare Holdings Limited (`Aspen`) (Registration number 1985/002935/06) Share code: APN ISIN: ZAE000023586 REVIEWED PRELIMINARY GROUP FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2004 ANDRENEWAL OF CAUTIONARY ANNOUNCEMENT - Headline earnings per share: 103,7 cents, up by 31% - Operating cash flow per share: 140,4 cents, up by 26% - Dividend per share: 30,0 cents, up by 50% - Delivering quality healthcare Group Income Statement Reviewed Audited Year ended Year ended % 30 June 2004 30 June 2003 change R`000 R`000 Revenue 2 201 721 1 900 805 Continuing operations 16 2 201 721 1 890 244 Discontinued operations - 10 561 Cost of sales (1 143 614) (1 039 967) Gross profit 1 058 107 860 838 Net operating expenses (504 357) (415 038) Other operating income 4 218 7 586 Selling and distribution costs (285 886) (246 839) Administration expenses (149 672) (118 753) Other operating expenses (73 017) (55 979) Loss on disposal of discontinued operations - (1 053) Operating profit 553 750 445 800 Continuing operations 24 553 750 446 176 Discontinued operations - (376) Net financing costs (25 286) (56 889) Net profit before taxation 36 528 464 388 911 Taxation (172 886) (115 501) Net profit after taxation 30 355 578 273 410 Minority interest - (2 765) Net profit attributable to ordinary shareholders 31 355 578 270 645 Weighted average number of shares in issue (000`s) 356 223 353 079 Earnings per share - basic (cents) 30 99,8 76,7 Earnings per share - diluted (cents) 30 97,2 74,8 Headline earnings per share (cents) 31 103,7 79,1 Headline earnings per share - diluted (cents) 31 101,0 77,1 Dividend per share (cents)* 50 30,0 20,0 Reconciliation of headline earnings Net profit attributable to ordinary shareholders 355 578 270 645 Adjusted for: - Amortisation of goodwill 13 774 8 074 - Loss on disposal of discontinued operations (net of taxation) - 1 053 - Profit on disposal of property, plant and equipment (net of taxation) (84) (570) Headline earnings 369 268 279 202 *Relates to dividend declared after year end. The policy of Aspen is to declare a final dividend when the preliminary results for each financial year are released. Group Balance Sheet Reviewed Audited 30 June 2004 30 June 2003 R`000 R`000 ASSETS Non-current assets 972 906 853 727 Property, plant and equipment 313 002 183 188 Investment property 4 572 4 022 Goodwill 86 204 67 478 Intangible assets 437 157 429 931 Receivables 7 466 19 422 Deferred taxation asset 124 505 149 686 Current assets 1 136 741 827 978 Inventories 245 676 213 527 Receivables and prepayments 425 569 414 105 Cash and cash equivalents 465 496 200 346 Total assets 2 109 647 1 681 705 EQUITY AND LIABILITIES Capital and reserves Share capital 81 509 67 571 Non-distributable reserves 104 838 153 731 Retained income 948 989 642 116 Treasury shares (75 807) (75 807) Ordinary shareholders` equity 1 059 529 787 611 Minority interest - 7 364 Non-current liabilities Interest-bearing borrowings 156 234 144 711 Interest-bearing deferred payables 39 718 81 199 Deferred taxation liability 61 607 42 289 Retirement benefit obligation 10 820 11 155 1 327 908 1 074 329 Current liabilities 781 739 607 376 Trade and other payables 360 379 336 380 Interest-bearing borrowings 289 991 151 498 Interest-bearing deferred payables 55 178 66 120 Taxation 76 191 51 148 Current provisions - 2 230 Total equity and liabilities 2 109 647 1 681 705 Number of shares in issue (net of 18,8 million treasury shares) (000`s) 358 208 354 646 Net asset value per share (cents) 295,8 222,1 Group Cash Flow Statement Reviewed Audited Year ended Year ended 30 June 2004 30 June 2003 R`000 R`000 Cash operating profit 656 358 530 973 Working capital requirements (28 101) (26 542) Cash generated from operations 628 257 504 431 Net financing costs (25 286) (56 889) Taxation paid (102 653) (54 127) Net cash inflow from operating activities 500 318 393 415 Net cash outflow from investing activities (282 858) (351 316) Replacement capital expenditure (27 664) (31 019) Expansion capital expenditure - intangible assets (90 632) (196 330) Expansion capital expenditure - oral solid dosage facility (130 942) (34 229) Acquisition of minority interest in subsidiary company (50 293) (31 669) Acquisition of subsidiary companies and businesses, net of cash - (48 321) Adjustment in respect of subsidiary company acquired 5 000 - Disposal of subsidiary companies and businesses, net of cash - 4 048 Proceeds on disposal of property, plant and equipment 451 1 374 Realisation of/(investment in) receivables 11 222 (15 170) Net cash inflow from financing activities 49 509 21 010 Proceeds from share issues 13 938 10 026 Increase in long-term interest-bearing borrowings 15 842 92 186 Increase/(decrease) in short-term interest-bearing borrowings 140 667 (8 070) Decrease in long-term interest-bearing deferred payables (40 238) (38 347) (Decrease)/increase in short-term interest-bearing deferred payables (8 813) 6 122 Dividends paid (71 887) (40 907) Effects of exchange rate changes (1 819) (46 827) Movement in cash and cash equivalents 265 150 16 282 Cash and cash equivalents at the beginning of the year 200 346 184 064 Cash and cash equivalents at the end of the year 465 496 200 346 Statement of Changes in Group Equity Share Non- capital distri- and butable Retained Treasury premium reserves income shares Total R`000 R`000 R`000 R`000 R`000 Balance at 1 July 2002 57 545 228 113 389 569 (75 807) 599 420 Currency translation differences - (43 190) - - (43 190) Net profit for the year - - 270 645 - 270 645 Dividend declared - - (40 907) - (40 907) Proportional release of deferred taxation asset - (23 156) 23 156 - - Deferred taxation asset adjustment - (565) (347) - (912) Cash flow hedges realised - (519) - - (519) Cash flow hedges recognised - (6 952) - - (6 952) Issue of share capital (share options exercised) 10 026 - - - 10 026 Balance as at 30 June 2003 67 571 153 731 642 116 (75 807) 787 611 Currency translation differences - (30 231) - - (30 231) Foreign currency reserve realised - (26) 26 - - Net profit for the year - - 355 578 - 355 578 Dividend declared - - (71 887) - (71 887) Proportional release of deferred taxation asset - (23 156) 23 156 - - Cash flow hedges realised - 6 952 - - 6 952 Cash flow hedges recognised - (2 432) - - (2 432) Issue of share capital (share options exercised) 13 938 - - - 13 938 Balance as at 30 June 2004 81 509 104 838 948 989 (75 807) 1 059 529 Segmental analysis as at June 2004 South Africa % of % of 2004 total 2003 total Primary segments: Geographical (R`000) Revenue - continuing operations 1 763 563 80,1 1 486 079 78,6 Revenue - discontinued operations - 10 561 100,0 1 763 563 80,1 1 496 640 78,7 Operating profit before amortisation - continuing operations 548 861 87,6 457 327 91,2 Operating profit before amortisation - discontinued operations - (376) 100,0 548 861 87,6 456 951 91,2 Amortisation - Goodwill (1 973) 14,3 (1 551) 19,2 Amortisation - Intangible assets (35 315) 59,7 (33 833) 73,6 Loss on disposal of discontinued operations - (1 053) 100,0 Operating profit - continuing operations 511 573 92,4 420 890 94,3 Operating profit - discontinued operations - (376) 100,0 511 573 92,4 420 514 94,3 Segmental analysis (continued) as at June 2004 Australia % of % of 2004 total 2003 total Primary segments: Geographical (R`000) Revenue - continuing operations 234 689 10,7 108 953 5,8 Revenue - discontinued operations - - 234 689 10,7 108 953 5,7 Operating profit before amortisation - continuing operations 37 726 6,0 21 070 4,2 Operating profit before amortisation - discontinued operations - - 37 726 6,0 21 070 4,2 Amortisation - Goodwill (406) 2,9 (434) 5,4 Amortisation - Intangible assets (8 938) 15,1 (6 093) 13,3 Loss on disposal of discontinued operations - - Operating profit - continuing operations 28 382 5,1 14 543 3,3 Operating profit - discontinued operations - - 28 382 5,1 14 543 3,3 Segmental analysis (continued) as at June 2004 United Kingdom % of % of 2004 total 2003 total Primary segments: Geographical (R`000) Revenue - continuing operations 203 469 9,2 295 212 15,6 Revenue - discontinued operations - - 203 469 9,2 295 212 15,5 Operating profit before amortisation - continuing operations 40 058 6,4 22 863 4,6 Operating profit before amortisation - discontinued operations - - 40 058 6,4 22 863 4,6 Amortisation - Goodwill (11 395) 82,7 (6 089) 75,4 Amortisation - Intangible assets (14 868) 25,1 (6 031) 13,1 Loss on disposal of discontinued operations - - Operating profit - continuing operations 13 795 2,5 10 743 2,4 Operating profit - discontinued operations - - 13 795 2,5 10 743 2,4 Segmental analysis (continued) as at June 2004 Total 2004 % 2003 % Primary segments: Geographical (R`000) Revenue - continuing operations 2 201 721 100,0 1 890 244 100,0 Revenue - discontinued operations - 10 561 100,0 2 201 721 100,0 1 900 805 100,0 Operating profit before amortisation - continuing operations 626 645 100,0 501 260 100,0 Operating profit before amortisation - discontinued operations - (376) 100,0 626 645 100,0 500 884 100,0 Amortisation - Goodwill (13 774) 100,0 (8 074) 100,0 Amortisation - Intangible assets (59 121) 100,0 (45 957) 100,0 Loss on disposal of discontinued operations - (1 053) 100,0 Operating profit - continuing operations 553 750 100,0 446 176 100,0 Operating profit - discontinued operations - (376) 100,0 553 750 100,0 445 800 100,0 Segmental analysis (continued) as at June 2004 Pharmaceutical % of % of 2004 total 2003 total Secondary segments: Business (R`000) Revenue-continuing operations 1 623 612 73,7 1 413 944 74,8 Revenue-discontinued operations - - 1 623 612 73,7 1 413 944 74,4 Operating profit before amortisation-continuing operations 512 255 81,7 388 768 77,6 Operating profit before amortisation-discontinued operations - - 512 255 81,7 388 768 77,6 Amortisation-Goodwill (12 215) 88,7 (6 523) 80,8 Amortisation-Intangible assets (52 850) 89,4 (41 162) 89,6 Loss on disposal of discontinued operations - - Operating profit - continuing operations 447 190 80,8 341 083 76,4 Operating profit - discontinued operations - - 447 190 80,8 341 083 76,4 Segmental analysis (continued) as at June 2004 Consumer % of % of 2004 total 2003 total Secondary segments: Business (R`000) Revenue-continuing operations 578 109 26,3 476 300 25,2 Revenue-discontinued operations - 10 561 100,0 578 109 26,3 486 861 25,6 Operating profit before amortisation-continuing operations 114 390 18,3 112 492 22,4 Operating profit before amortisation-discontinued operations - (376) 100,0 114 390 18,3 112 116 22,4 Amortisation-Goodwill (1 559) 11,3 (1 551) 19,2 Amortisation-Intangible assets (6 270) 10,6 (4 795) 10,4 Loss on disposal of discontinued operations - (1 053) 100,0 Operating profit - continuing operations 106 560 19,2 105 093 23,6 Operating profit - discontinued operations - (376) 100,0 106 560 19,2 104 717 23,6 Segmental analysis (continued) as at June 2004 Total 2004 % 2003 % Secondary segments: Business (R`000) Revenue-continuing operations 2 201 721 100,0 1 890 244 100,0 Revenue-discontinued operations - 10 561 100,0 2 201 721 100,0 1 900 805 100,0 Operating profit before amortisation-continuing operations 626 645 100,0 501 260 100,0 Operating profit before amortisation-discontinued operations - (376) 100,0 626 645 100,0 500 884 100,0 Amortisation-Goodwill (13 774) 100,0 (8 074) 100,0 Amortisation-Intangible assets (59 120) 100,0 (45 957) 100,0 Loss on disposal of discontinued operations - (1 053) 100,0 Operating profit - continuing operations 553 750 100,0 446 176 100,0 Operating profit - discontinued operations - (376) 100,0 553 750 100,0 445 800 100,0 Supplementary Information Reviewed Audited Year ended Year ended 30 June 2004 30 June 2003 R`000 R`000 Capital expenditure: Incurred - oral solid dosage facility 130 942 34 229 - other tangible assets 27 664 31 019 - intangible assets 90 632 196 330 Contracted - increase in Co-pharma shareholding* - 50 263 - oral solid dosage facility 4 117 96 348 - other 5 980 6 946 Authorised not contracted - oral solid dosage facility 11 184 20 049 - other 7 461 421 Proceeds on disposal of tangible assets 451 1 374 *The group acquired an additional 20% in the shareholding of Co-pharma Limited for GBP 4,1 million with effect from 1 July 2003, bringing its total shareholding in this company to 100%. This amount was funded out of existing cash resources held offshore with South African Reserve Bank approval. Operating profit has been arrived at after charging: Depreciation of tangible assets 27 491 27 580 Reversal of other provisions - (17 518) Amortisation of goodwill - accelerated 2 158 17 518 Amortisation of goodwill - recurring 11 616 8 074 Amortisation of intangible assets 59 120 45 957 Net financing costs: Interest received 27 123 37 774 Net foreign exchange loss (10 233) (10 494) Fair value gains on financial instruments 6 641 217 Interest paid (36 816) (66 727) Net finance costs on interest-bearing deferred payables and financial assets (12 001) (17 659) Net financing costs (25 286) (56 889) Operating lease commitments: - payable within one year 8 284 7 879 - payable thereafter 27 191 20 600 35 475 28 479 Finance lease commitments: - payable within one year 1 215 2 940 - payable thereafter 663 1 514 1 878 4 454 Other commitments: During the 2003 financial year Aspen entered into a 12-year agreement with GlaxoSmithKline (`GSK`) to distribute and market a range of their products. In terms of this agreement Aspen is committed to pay the following amounts to GSK over the remaining period: - payable within one year 39 547 52 727 - payable thereafter 128 964 161 267 168 511 213 994 Contingent liabilities There are contingent liabilities in respect of: Additional payments in respect of the Quit worldwide intellectual property rights 5 679 6 768 Guarantee covering potential rental default relating to sale of discontinued operations 5 048 7 520 Guarantee covering loan and other obligations to third parties 1 750 1 662 In June 2000, a number of pharmaceutical wholesalers lodged a complaint with theCompetition Commission against a number of pharmaceutical manufacturers, including Pharmacare Limited. In the complaint they alleged that the manufacturers had engaged in a number of prohibited practices. The pharmaceutical wholesalers also instigated interim proceedings before the Competition Tribunal in respect of the matters set out in the complaint. On 18 June 2003, the Competition Tribunal dismissed with costs this application for interim relief and ruled in favour of the manufacturers. The pharmaceutical wholesalers have subsequently appealed against this decision. No further developments have taken place since this appeal. Aspen continues to hold the view that this action is unlikely to have a material adverse impact on Aspen`s business in the future. Tibbett and Britten Africa (Proprietary) Limited have instituted an action against Pharmacare Limited for a claim of approximately R39 million for additional distribution fees. This claim has been disputed and is being defendedon the basis of the distribution agreement with Tibbett and Britten. This actionnow replaces the claim referred for independent adjudication, which was reportedto shareholders in Aspen`s Annual Financial Statements for the year ended 30 June 2003. Aspen`s advisors continue to hold the view that this claim is unlikely to have a material adverse impact on Aspen`s business in the future. Post-balance sheet events Acquisition by Aspen of Fine Chemicals Corporation (Pty) Limited (`FCC`) and Nutricia (Pty) Limited (`Nutricia`). All conditions precedent relating to the acquisitions of FCC and Nutricia, including Competition Commission and Exchange Control approvals, have been fulfilled subsequent to 30 June 2004. Accordingly, the Aspen Group has acquired with effect from July 2004: - 100% of the shares of and shareholder claims against FCC for approximately R275 million of which R250 million has been paid out of existing cash resources.The balance is due in July 2007. - 100% of the shares of and shareholder claims against Nutricia for R21,7 million, which has been paid from existing cash resources. Specific share repurchase. With effect from 30 July 2004, 21,3 million Aspen shares were acquired by Aspen from Peu Health (Pty) Limited in terms of a specific share repurchase for a purchase consideration of R234,3 million (1 100 cents per Aspen share). 2 677 450 ordinary shares have been cancelled and will revert to authorised but unissued share capital, while 18 622 550 shares have been repurchased by Pharmacare Limited, a wholly owned subsidiary of Aspen, and will be held as treasury shares. All conditions necessary for the completion of the specific share repurchase, including the passing of the requisite resolutions by shareholders in a general meeting and the granting of all regulatory approvals have been fulfilled. The purchase consideration has been paid from existing cash resources. Basis of Accounting The consolidated preliminary results have been prepared in accordance with SouthAfrican Statements of Generally Accepted Accounting Practice, the listing requirements of the JSE Securities Exchange South Africa and Schedule 4 of the South African Companies Act. These results have been reviewed by Aspen`s auditors, PricewaterhouseCoopers Inc. Their unqualified review report is available for inspection at the company`s registered office. The accounting policies used in the preparation of the financial statements are consistent with those used in the annual financial statements for the year ended30 June 2003. Disclosure of comparatives Comparative figures have been adjusted to conform with changes in presentation in the current year, where necessary. Commentary GROUP Aspen has built on the strong showing of the first six months to record excellent full year results reflected in a 31% growth in headline earnings per share to 103,7 cents. This performance was based on revenue growth of 16% to R2 202 million and an improvement in operating margins resulting in an increase in operating profit of 24% to R554 million. Earnings also benefited from a R32 million reduction in financing costs over the prior year due to the Group`s strong cash generation and good working capital management. SOUTH AFRICAN OPERATIONS The past year was marked by deflationary conditions and continuous uncertainty caused by a changing legislative environment. The strong rand has made South Africa an attractive destination for importers, raising competition further in an already competitive market. The strength of the local currency has had some benefits to Aspen. Approximately half of finished product content is imported. The resultant lower rand cost of imported raw materials as well as more effective procurement has reduced the effect of falling selling prices. Revenue growth of 19% by the South African business in this environment was an exceptional result. The Pharmaceutical Division achieved growth of 22% in revenue notwithstanding that the average selling price of pharmaceutical products marketed in the private sector fell by 6%. This growth was achieved through increased volumes. The strong performance was underpinned by the increased contribution of productslaunched in the latter part of the previous year. The outstanding performer was the anti-depressant CiLift, the generic of Cipramal. Strong performances under co-marketing and distribution agreements with multi-national companies supportedthe good showing of this division. Revenue growth in the Consumer Division was 11%. This included the contribution of infant nutritionals in the final quarter of the year. Over-the-counter (`OTC`) products performed well as last year`s Triomed acquisition achieved its potential. The capabilities of Aspen`s OTC team were recognised when they were placed first in the nationwide Campbell Belman Confidence Standing survey. This survey of retail pharmacies and buying groups assessed the 36 leading OTC companies in South Africa. Market share of leading brands was improved in a verycompetitive fast moving consumer goods market. However, there were reversals in contribution from the natural products range. The infant nutritional range licensed from Wyeth which commenced trade in the final quarter did not contribute to profits due to the high cost of initial imported inventory. Production volumes during the year were at a record high. The construction of the oral solid dosage (`OSD`) production facility has been completed and is operational. The inspection of the OSD facility by the South African Medicines Control Council (`MCC`) has taken place. The inspections by the regulatory authorities of the UK, the USA, Australia and the World Health Organisation are expected to take place over the next six months. The OSD facility provides much needed additional capacity for the South African market and the capability to export to other regulated markets. The prospect of further extension to the Group`s production capabilities is under consideration. INTERNATIONAL OPERATIONS The international operations contributed 20% to Group revenue even though there was a contraction in revenue from Co-pharma. Earnings before interest, tax and amortisation (`EBITA`) increased by 77% to R78 million despite the stronger rand. Aspen Australia has doubled revenue in both its Pharmaceutical and Consumer Divisions. This has been achieved by a capable management team optimising opportunities. EBITA of R38 million is up 79% on the prior year. During April 2004, UK based Aspen Resources acquired two cephalosporin moleculesfrom multinational Eli Lilly (`Lilly`) for R57 million to increase its portfolioof intellectual property. The products are distributed by Aspen Australia. The EBITA recorded by Aspen Resources of R32 million represents an encouraging startto this initiative. Co-pharma`s performance was significantly weaker than the prior year as an ultracompetitive market, supply problems and the absence of new products combined to restrict revenue to R203 million (prior year R295 million) and EBITA to R8 million (prior year R22 million). Once the Group has begun manufacturing productfor Co-pharma in the OSD facility, an improvement in Co-pharma`s performance is expected. CASH FLOWS AND FINANCE COSTS Strong cash flows were again evident during the year. Operating cash flow per share of 140,5 cents substantially exceeded the benchmark headline earnings per share. Increased investment in working capital was limited to only R28 million despite the growth in trading operations. Growth in stock, and particularly debtors was restricted below the level of business expansion. Negotiated extension of certain creditor`s terms added to the benefit. The strong cash flows and the lowering of interest rates led to a net interest charge of R9,7 million (prior year R28,9 million). A net foreign exchange loss of R10,2 million (prior year R10,5 million) was incurred as a result of the costof forward exchange contracts closing at above the spot rate. Fair value gains of R6,6 million (prior year R0,2 million) were made on the revaluation of financial instruments in terms of accounting standard AC 133. Total net financing costs reduced from R57 million last year to R25 million. SOCIAL RESPONSIBILITY DISEASES Aspen recently received the registration by the MCC of the balance of its anti retroviral (`ARV`) product dossiers. Aspen now has registrations for Stavudine, Didanosine, Nevirapine, Lamivudine, Zidovudine and the Lamivudine-Zidovudine combination. These generic ARVs will be manufactured at the Group`s Port Elizabeth production facility. The tablets and capsules will be manufactured in the OSD facility. Aspen`s generic ARVs allow for the supply of a full triple combination therapy. The South African government`s first tender for the supply of ARVs closed on 6 August 2004. Aspen anticipates the results of its submissionshortly. Aspen expects to extend its supply of generic ARVs further afield underinitiatives such as President Bush`s US$15 billion Emergency Plan for AIDS relief and the Clinton Foundation. Lilly recognised Aspen`s manufacturing capabilities and its status as a leader in the fight against infectious diseases in Africa in an agreement announced on 5 February 2004, which provides for the transfer to Aspen by Lilly of global technology, intellectual property and funding that will enable Aspen to manufacture essential antibiotics (capreomycin and cycloserine) needed to treat patients with multi-drug resistant tuberculosis. BLACK ECONOMIC EMPOWERMENT (`BEE`) Aspen repurchased 21,3 million shares from BEE shareholders, Peu Health (Pty) Limited (`Peu`), on 30 July 2004, at a price of 1 100 cents per share. The sharebuy back was necessitated by Peu`s funding structure being unwound. Aspen has announced that the shares bought back from Peu may be used to facilitate furtherBEE transactions (refer to the renewal of Cautionary Announcement below). PROSPECTS The implementation of the single exit pricing legislation has brought greater certainty to the South African healthcare environment. Legal challenges to legislation and the future benchmarking of international pharmaceutical prices may yet bring further change. However, the drive for lower medicine prices will continue. Aspen is the generic market leader, boasts an exceptional generic pipeline and has manufacturing facilities capable of producing quality product at internationally competitive prices. These fundamentals have allowed Aspen to adapt to the challenges of this changing environment and to emerge well placed to continue growing in the South African market. The acquisitions of Fine Chemicals Corporation (Pty) Limited (`FCC`) and Nutricia (Pty) Limited (`Nutricia`) were completed after the financial year end.FCC, the only manufacturer of active pharmaceutical ingredients (`APIs`) in South Africa, presents a unique opportunity to develop the capability to manufacture the essential APIs for ARVs in South Africa. Aspen has commenced discussions with prospective technology partners. The acquisition of Nutricia, renamed Aspen Nutritionals (Pty) Ltd, provides access to an infant milk formula (`IMF`) manufacturing facility. The combined volumes of the Infacare brands acquired from Nutricia and the licensed Wyeth IMF brands will provide the necessary critical mass to allow for the manufacture of IMFs at competitive prices. Further growth in the international operations is anticipated. This is likely tobe led by the realisation of additional opportunities in Australia and the commencement of exports from the OSD facility in the second half of the year. DIVIDEND DECLARATION Taking into account the earnings performance and strong cash flows the directorshave declared a dividend of 30 cents per share for the year ended 30 June 2004, payable to those shareholders recorded in the register on Friday, 29 October 2004. This represents an increase of 50% over the previous year and is covered 3,33 times (prior year 3,84 times) by earnings per share. In compliance with AC 107 (events after balance sheet date), this dividend will only be accounted for in the financial statements in the year ending 30 June 2005. It remains the policy of Aspen to declare a final dividend when the preliminary results for each financial year are released. The last day to trade `cum` the dividend in order to participate in the dividendwill be Friday, 22 October 2004. The shares of Aspen will commence trading `ex` the dividend from the commencement of business on Monday, 25 October 2004 and the record date will be Friday, 29 October 2004. The dividend will be paid on Monday, 1 November 2004. Share certificates may not be dematerialised or rematerialised between Monday, 25 October 2004 and Friday, 29 October 2004, bothdays inclusive. RENEWAL OF CAUTIONARY ANNOUNCEMENT Further to the cautionary announcements dated 6 May 2004 and 24 June 2004, shareholders are advised that discussions in respect of the proposed BEE transaction are still in progress which, if successfully concluded, may have a material effect on the price of Aspen shares. Accordingly, shareholders should continue exercising caution when dealing in Aspen shares until a further announcement is made. By order of the board SB Saad (Group Chief Executive) MG Attridge (Deputy Group Chief Executive) HA Shapiro (Company Secretary) Woodmead 17 August 2004 www.aspenpharma.com Date: 18/08/2004 12:29:22 PM Produced by the JSE SENS Department
