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Aspen - Reviewed Preliminary Group Financial Results For The Year Ended 30 June
2005
Aspen Pharmacare Holdings Limited
(`Aspen`)
(Registration number 1985/002935/06)
Share code: APN ISIN: ZAE000066692
Reviewed Preliminary Group Financial Results for the year ended 30 June 2005
Headline earnings per share 144,7 cents up by 40%
Distribution per share 48,0 cents up by 60%
Operating cash flow per share 187,4 cents up by 34%
Group Income Statement
Reviewed Audited
Year ended Year ended
% 30 June 2005 30 June 2004
change Rm Rm
Revenue 30 2 869,0 2 201,7
Cost of sales (1 477,2) (1 143,6)
Gross profit 32 1 391,8 1 058,1
Other operating income 5,4 4,2
Selling and distribution costs (347,6) (285,9)
Administrative expenses (208,5) (149,6)
Other operating expenses (83,4) (73,0)
Operating profit 37 757,7 553,8
Net financing costs (54,8) (25,3)
Net profit before taxation 33 702,9 528,5
Taxation (208,9) (172,9)
Net profit attributable to shareholders 39 494,0 355,6
Net financing costs (55,9) (25,3)
Net profit before taxation 33 702,9 528,5
Taxation (208,9) (172,9)
Net profit attributable
to shareholders 39 494,0 355,6
Weighted average number of
shares in issue (`000) 340 606 356 223
Earnings per share -
basic (cents) 45 145,0 99,8
Earnings per share -
diluted (cents) 45 140,5 97,2
Headline earnings per
share (cents) 40 144,7 103,7
Headline earnings per share -
diluted (cents) 39 140,1 101,0
Capital distribution/dividend
per share (cents)* 60 48,0 30,0
Reconciliation of headline earnings
Net profit attributable to
ordinary shareholders 494,0 355,6
Adjusted for:
- Amortisation of goodwill - 13,8
- Deferred taxation asset in
respect of Nutricia (Pty) Ltd
assessed loss raised (7,0) -
- Goodwill in respect of
acquisition of Nutricia (Pty) Ltd
written down 7,0 -
- Profit on disposal of property,
plant and equipment
(net of taxation) (0,1) (0,1)
- Fair value adjustment of
investment property
(net of taxation)** (0,5) -
- Profit on disposal of intangible
assets (net of taxation) (1,7) -
- Impairment of intangible assets
(net of taxation)** 1,2 -
Headline earnings 492,9 369,3
*Relates to capital distribution (prior year - dividend) declared after year-
end. The policy of Aspen is to recommend a final distribution to shareholders
when the preliminary results for each financial year are released.
**Adjustment was not considered material in prior years.
Group Balance Sheet
Reviewed Audited
30 June 30 June
2005 2004
Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 449,7 308,3*
Investment property 4,0 4,6
Goodwill 271,8 86,2
Intangible assets 532,8 441,8*
Preference share investment 376,8 -
Non-current receivables - 7,5
Deferred taxation assets 107,5 124,5
Total non-current assets 1 742,6 972,9
Current assets
Inventories 425,9 245,7
Receivables and prepayments 528,2 425,6
Cash and cash equivalents 439,6 465,5
Total current assets 1 393,7 1 136,8
Total assets 3 136,3 2 109,7
SHAREHOLDERS` EQUITY
Share capital and share premium 319,1 81,5
Treasury shares (641,7) (75,8)
Non-distributable reserves 140,7 111,8
Retained income 1 268,8 949,0
Ordinary shareholders` equity 1 086,9 1 066,5
Preference shares - equity component 19,9 -
Total shareholders` equity 1 106,8 1 066,5
LIABILITIES
Non-current liabilities
Preference shares - liability component 349,0 -
Interest-bearing borrowings 62,7 156,3
Interest-bearing deferred-payables 23,2 39,7
Deferred taxation liabilities 92,8 61,6
Retirement benefit obligations 10,6 10,8
Total non-current liabilities 538,3 268,4
Current liabilities
Trade and other payables 595,4 353,4
Interest-bearing borrowings 761,7 290,0
Interest-bearing deferred-payables 48,6 55,2
Current taxation liabilities 85,5 76,2
Total current liabilities 1 491,2 774,8
Total liabilities 2 029,5 1 043,2
Total equity and liabilities 3 136,3 2 109,7
Number of shares in issue (net of
treasury shares) (`000) 339 441 358 208
Net asset value per share (cents) 320,2 297,7
*Software has been reclassified to intangible assets.
Group Cash Flow Statement
Reviewed Audited
Year ended Year ended
30 June 30 June
2005 2004
Rm Rm
Cash flows from operating activities
Cash operating profit 887,6 670,6
Changes in working capital (excluding
the effects of acquisition and disposal
of subsidiaries) (18,0) (44,3)
Cash generated from operations 869,6 626,3
Net financing costs (54,8) (25,3)
Taxation paid (176,6) (102,3)
Net cash from operating activities 638,2 498,7
Cash flows from investing activities
Replacement capital expenditure
- property, plant and equipment (23,1) (16,2)
Expansion capital expenditure
- property, plant and equipment (57,9) (139,7)
Proceeds on disposal of property,
plant and equipment 0,4 0,5
Expansion capital expenditure
- intangible assets (86,2) (92,8)
Proceeds on disposal of
intangible assets 4,0 -
Investment in preference shares (376,8) -
Acquisition of subsidiaries and
businesses, net of cash acquired (262,1) (45,3)
Decrease in long-term receivables 7,8 10,8
Net cash used in investing activities (793,9) (282,7)
Cash flows from financing activities
Proceeds from interest-bearing
borrowings 583,4 234,1
Repayment of interest-bearing borrowings (282,7) (73,6)
Repayment of interest-bearing
deferred-payables (52,2) (58,2)
Proceeds from interest-bearing
deferred-payables 4,3 10,1
Dividends paid (101,2) (71,9)
Proceeds from issue of ordinary shares
(share options) 13,1 13,9
Proceeds from issue of ordinary
shares (BEE) 256,6 -
Share repurchase-cancellation of shares (32,1) -
Share repurchase-acquisition of
treasury shares (641,7) -
Proceeds from issue of preference shares 377,0 -
Net cash from financing activities 124,5 54,4
Effects of exchange rate changes 5,3 (5,2)
Cash and cash equivalents
Movement in cash and cash equivalents (25,9) 265,2
Cash and cash equivalents at the
beginning of the year 465,5 200,3
Cash and cash equivalents at the end
of the year 439,6 465,5
Operating cash flow per share (cents) 187,4 140,0
Statement of Changes in Group Equity
Share Non-distri-
capital and butable Retained
premium reserves income
Rm Rm Rm
Balance as at
1 July 2003 67,6 153,7 642,1
Currency translation
differences - (23,3) -
Net profit for
the year - - 355,6
Dividend paid - - (71,9)
Proportional release
of deferred
taxation asset - (23,2) 23,2
Cash flow hedges
realised - 7,0 -
Cash flow hedges
recognised - (2,4) -
Issue of share
capital (options
exercised) 13,9 - -
Balance as at
30 June 2004 81,5 111,8 949,0
Negative goodwill
adjustment in terms
of IFRS 3 - - 4,4
Restated opening
balance 81,5 111,8 953,4
Currency translation
differences - 25,8 -
Net profit for
the year - - 494,0
Dividend paid - - (101,2)
Proportional release
of deferred taxation
asset - (22,4) 22,4
Deferred taxation
adjustment
- change of tax
rate - (3,4) -
Cash flow hedges
realised - 2,4 -
Issue of ordinary
share capital
(options exercised) 13,1 - -
Issue of ordinary
share capital (BEE) 256,6 - -
Issue of preference
share capital - - -
Cancellation of
shares (32,1) - (73,3)
Share repurchase-
acquisition of
treasury shares - - -
Non-distributable
portion of earnings - 26,5 (26,5)
Balance as at
30 June 2005 319,1 140,7 1 268,8
Statement of Changes in Group Equity (continued)
Treasury Preference
shares shares Total
Rm Rm Rm
Balance as at 1 July 2003 (75,8) - 787,6
Currency translation
differences - - (23,3)
Net profit for the year - - 355,6
Dividend declared - - (71,9)
Proportional release of
deferred taxation asset - - -
Cash flow hedges realised - - 7,0
Cash flow hedges
recognised - - (2,4)
Issue of share capital
(options exercised) - - 13,9
Balance as at
30 June 2004 (75,8) - 1 066,5
Negative goodwill
adjustment in terms
of IFRS 3 - - 4,4
Restated opening balance (75,8) - 1 070,9
Currency translation
differences - - 25,8
Net profit for the year - - 494,0
Dividend declared ) - - (101,2)
Proportional release of
deferred taxation asset - - -
Deferred taxation
adjustment - change of
tax rate - - (3,4)
Cash flow hedges realised - - 2,4
Issue of ordinary share
capital (options
exercised) - - 13,1
Issue of ordinary share
capital (BEE) - - 256,6
Issue of preference
share capital - 19,9 19,9
Cancellation of shares (32,1) - (29,6)
Share repurchase-
acquisition of
treasury shares (641,7) - (641,7)
Non-distributable
portion of earnings - - -
Balance as at 30 June 2005 (641,7) 19,9 1 106,8
Segmental Analysis
Primary Segments: Geographical (Rm)
South Africa
Reviewed Audited
Year Year
ended ended
30 June 30 June
2005 % of 2004 % of
Rm total Rm total
Revenue 2 334,5 81,3 1 763,5 80,1
Operating profit before
amortisation 740,3 89,1 554,0 87,7
Amortisation
- Goodwill - (2,0) 14,3
Amortisation
- Intangible assets (45,6) 62,2 (40,4) 62,9
Operating profit 694,7 91,7 511,6 92,4
Australia
Revenue 325,8 11,4 234,7 10,7
Operating profit before
amortisation 44,7 5,4 37,7 6,0
Amortisation
- Goodwill - (0,4) 2,9
Amortisation
- Intangible assets (9,0) 12,3 (8,9) 13,9
Operating profit 35,7 4,7 28,4 5,1
United Kingdom
Revenue 208,7* 7,3 203,5* 9,2
Operating profit
before amortisation 46,0 5,5 40,1 6,3
Amortisation - Goodwill - (11,4) 82,8
Amortisation
- Intangible assets (18,7) 25,5 (14,9) 23,2
Operating profit 27,3 3,6 13,8 2,5
Total
Revenue 2 869,0 100,0 2 201,7 100,0
Operating profit before
amortisation 831,0 100,0 631,8 100,0
Amortisation
- Goodwill - (13,8) 100,0
Amortisation
- Intangible assets (73,3) 100,0 (64,2) 100,0
Operating profit 757,7 100,0 553,8 100,0
Secondary Segments: Business (Rm)
Pharmaceutical
Revenue 2 134,7 74,4 1 702,7 77,3
Operating profit
before amortisation 702,3 84,5 549,4 87,0
Amortisation - Goodwill - (12,2) 88,7
Amortisation
- Intangible assets (67,3) 91,8 (57,4) 89,4
Operating profit 635,0 83,8 479,8 86,6
Consumer
Revenue 734,3 25,6 499,0 22,7
Operating profit
before amortisation 128,7 15,5 82,4 13,0
Amortisation
- Goodwill - (1,6) 11,3
Amortisation
- Intangible assets (6,0) 8,2 (6,8) 10,6
Operating profit 122,7 16,2 74,0 13,4
Total
Revenue 2 869,0 100,0 2 201,7 100,0
Operating profit
before amortisation 831,0 100,0 631,8 100,0
Amortisation
- Goodwill - (13,8) 100,0
Amortisation
- Intangible assets (73,3) 100,0 (64,2) 100,0
Operating profit 757,7 100,0 553,8 100,0
The secondary segment reporting for the June 2004 period has been restated after
a re-evaluation of the composition of the Pharmaceutical and Consumer segments,
in terms of which Schedule 2 medicines have been transferred from the Consumer
segment to the Pharmaceutical segment. This re-categorisation has taken place as
a consequence of the introduction of legislation restricting the advertising of
Schedule 2 medicines.
*Net of inter-segment sales to Aspen Australia of R80,1 million (2004: R54,1
million).
Supplementary Information
Reviewed Audited
Year ended Year ended
30 June 2005 30 June 2004
Rm Rm
Capital expenditure:
Incurred 167,2 248,7
- tangible assets 81,0 158,1
- intangible assets 86,2 90,6
Contracted 35,1 10,1
Authorised but not contracted for 219,3 18,6
Operating profit has been arrived
at after charging:
Depreciation of property,
plant and equipment 41,3 22,4*
Amortisation of goodwill - 13,8
Amortisation of intangible assets 73,3 64,2*
Net financing costs:
Interest received 36,3 27,3
Net foreign exchange loss (6,7) (10,2)
Fair value (losses)/gains on
financial instruments (0,3) 6,6
Interest paid (76,1) (37,0)
Net finance costs on interest-bearing
deferred-payables and financial
assets (7,5) (12,0)
Preference share dividends (1,6) -
Investment income 1,1 -
Net financing costs (54,8) (25,3)
Operating lease commitments:
- payable in one year 10,2 8,3
- payable thereafter 31,6 27,2
41,8 35,5
Finance lease commitments:
- payable in one year 0,6 1,2
- payable thereafter 0,1 0,7
0,7 1,9
Other commitments:
During the 2003 financial year Aspen entered into a 12-year agreement with
GlaxoSmithKline (`GSK`) South Africa to distribute and market a range of their
products.In terms of this agreement Aspen is committed to pay the following
amounts to GSK South Africa:
- payable within one year 30,6 39,5
- payable thereafter 101,3 129,0
131,9 168,5
During the financial year Aspen Australia entered into a 10-year agreement with
Novartis Pharmaceuticals Australia Pty Ltd to distribute and market a range of
their products. In terms of this agreement Aspen is committed to spend the
following amounts on promotion of the products:
- payable within one year 8,7 -
- payable thereafter 54,5 -
63,2 -
Contingent liabilities:
There are contingent liabilities in respect of:
- Additional payments in respect of the Quit worldwide intellectual property
rights 6,0 5,7
- Guarantee covering potential rental default relating to sale of discontinued
operations 4,0 5,0
- Guarantees covering loan and other obligations to third parties
1,6 1,8
*Depreciation of software was reallocated to amortisation.
Tibbett and Britten Africa (Proprietary) Limited have instituted a claim of
approximately R39 million for additional distribution fees. This claim has been
disputed and is being defended. Discussions regarding the resolution of the
dispute are currently in process. 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.
Acquisition by Aspen of Fine Chemicals Corporation (Pty) Limited (`FCC`) and
Nutricia (Pty) Limited (`Nutricia`)
The Aspen Group has acquired with effect from 9 July 2004:
- 100% of the shares and shareholder claims against FCC for approximately R276
million of which R253 million has been paid out of existing cash resources. The
balance is due after the results for the year ending 30 June 2007 are finalised.
- 100% of the shares and shareholder claims against Nutricia for R17,3 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 R235,3 million (R11,00 per Aspen share).
2 677 450 ordinary shares have been cancelled and reverted to authorised but
unissued share capital, while 18 622 550 shares have been repurchased by
Pharmacare Limited, a wholly owned subsidiary of Aspen, and are held as treasury
shares.
The purchase consideration has been paid from existing cash resources.
Black Economic Empowerment (`BEE transaction`)
The following transactions were concluded in terms of the BEE deal and the
scheme of arrangement recently completed:
- 13 400 000 ordinary shares were issued to Imithi Investments (Proprietary)
Limited at R11,00 per share, for a total consideration of R141,0 million (net of
transaction costs).
- 6 100 000 ordinary shares were issued to the Industrial Development
Corporation of South Africa Limited at R19,80 per share, for a total
consideration of R115,6 million (net of transaction costs).
- 17 600 000 convertible, redeemable, cumulative preference shares were issued
to Imithi Investments (Proprietary) Limited at R21,41 per share, for a total
consideration of R377,0 million.
- 20 308 949 ordinary shares were acquired from shareholders at R21,41 per
share, for a total consideration of R435,9 million (including transaction
costs), and are held as treasury shares.
Basis of Accounting
The consolidated preliminary results have been prepared in accordance with South
African Statements of Generally Accepted Accounting Practice, the Listings
Requirements of the JSE Limited 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 preliminary financial
statements conform with South African Statements of Generally Accepted
Accounting Practice, and are consistent with those used in the annual financial
statements for the year ended 30 June 2004, except for the adoption of the
following revised South African Statements of GAAP: IAS 36 (AC 128) Impairment
of Assets and IAS 38 (AC 129) Intangible Assets as well as IFRS 3 (AC 140)
Business Combinations, which replaced AC 131.
The above statements are applicable to all business combinations for which the
agreement date is on or after 31 March 2004, as well as financial years
commencing on or after 31 March 2004.
In addition, the amortisation of goodwill was discontinued as from 1 July 2004.
The carrying amount of goodwill is now tested annually for impairment in
accordance with the requirements of IAS 36 (AC 128).
Commentary
Group: Aspen has recorded headline earnings per share (`HEPS`) of 144,7 cents
for the year ended 30 June 2005, an increase of 40%. These excellent results
were driven by a 30% rise in revenue to R2,9 billion and a 32% increase in
earnings before interest, taxation and amortisation (`EBITA`) to R831 million.
The adoption of accounting standard `IFRS 3 (AC 140) Business Combinations` for
the year has resulted in the discontinuation of amortisation of goodwill in the
current year. Amortisation of goodwill in the prior year amounted to R14
million. The effective tax rate has declined from 32,7% in the previous year to
29,7%. The removal of goodwill amortisation (not deductible in the determination
of taxable income) and the decrease of 1% in the South African tax rate were the
primary causes of the lower effective tax rate.
The weighted number of shares in issue for the year was 340,6 million. This was
4,4% less than the prior year as a result of the number of shares bought back
exceeding the number of shares issued during the course of the year.
South African Operations: The strong performance of the South Africa business
dominated the Group`s results. The acquisitions in July 2004 of Fine Chemicals
Corporation (Pty) Limited (`FCC`) and Nutricia (Pty) Limited contributed towards
revenue growth of 32%.
Revenue in the Pharmaceutical Division increased by 23%. This was achieved
despite the freeze on price increases imposed under existing legislation. Key
growth drivers were increased generic volumes, new product launches and the
acquisition of FCC. The over-the-counter business was adversely affected by the
implementation of legislation restricting the advertising of schedule 2
medicines. Twenty-one new molecules were launched during the year. This
represented the most product launches by any company in the industry over the
course of the year. The product launches included the new chemical entity
Gemifloxacillin Mesylate, specific for respiratory tract infections, marketed
under the trademark Factive. New products, volume-driven production
efficiencies, savings from improved procurement and the benefits of the strong
rand on imported materials have assisted in the protection of margins.
The Consumer Division has enjoyed an excellent year. All of Aspen`s leading
brands have performed well. The addition of the infant milk formula business and
good organic growth have resulted in an increase in revenue of 64%. The buoyant
retail sector has been conducive to growth.
The Group has once again achieved record production levels. Service delivery and
inventory levels were adversely affected during periods of the year as the
manufacturing sites have struggled to meet production demand. The original
manufacturing facility in Port Elizabeth is running at maximum capacity. The
East London site has geared up for increased output. The world-class oral solid
dosage facility (`OSD`) has consistently increased capacity utilisation, but has
been hampered in its progress by a number of regulatory audits. To date the OSD
facility has been inspected and received accreditation by the South African
Medicines Control Council (`MCC`), the United States Food and Drug
Administration (`FDA`), the United Kingdom Medicines and Healthcare Products
Regulatory Agency and a number of African states. Anticipated growth in
production demand has resulted in the ordering of an additional integrated
granulation suite for the OSD facility which will result in a further
substantial increase in capacity. This additional equipment should be
commissioned by April 2006. The estimated capital cost is R15 million.
Aspen intends to continue to develop the excellence of its production
capabilities in areas of more complex manufacture. Consistent with this
strategy, the board of directors has authorised the construction of a sterile
facility capable of manufacturing injectables and eye drops at the Port
Elizabeth production centre. Construction is scheduled to commence shortly and
the first production is expected in early 2007. The estimated capital cost of
the plant is R200 million.
International Operations: The international businesses contributed R534 million
to revenue, 19% of the Group total. This is up 22% on the prior year. The rand
was marginally stronger against the currencies of the international businesses
on a weighted basis.
Aspen Australia recorded an increase in revenue of 39%, to
R326 million. Revenue growth was bolstered by a distribution agreement with
Novartis in the second half of the year, which added R43 million. The ten-year
agreement to market and distribute a range of pharmaceutical products is not
expected to contribute to earnings until 2008. EBITA of R45 million was up by
18% in a trading environment which has become increasingly regulated.
UK-based Aspen Resources, an intellectual property owning company, reported
EBITA of R37 million, an increase of 17%. Currently all of the products owned by
Aspen Resources are distributed by Aspen Australia.
Co-pharma benefited from the introduction of a new product line during the
second half of the year, which was able to command higher margins. Revenue rose
by 3% to R209 million and EBITA increased 8% to R9 million.
Cash Flows and Balance Sheet: The Group`s record of strong cash flow generation
was maintained. Net cash flows from operating activities of R638 million
exceeded reported earnings by 29%. The net investment in working capital was
limited to R18 million as the planned increase in stockholding and the trade-
related increase in debtors was substantially offset by an increase in
creditors.
Share capital and share premium are recorded at R319 million, an increase of
R238 million. The primary cause of the increase was the Black Economic
Empowerment (`BEE`) transaction. The value of treasury shares rose to R642
million as a consequence of the specific share buy-back and the scheme of
arrangement under the BEE transaction. R377 million was raised by the issue of
convertible redeemable cumulative preference shares. The proceeds have been
invested in premium rated performance shares.
Anti-Retrovirals (`ARVs`): During the past year Aspen confirmed its global
leadership status as a manufacturer capable of supplying generic ARVs to those
most in need when it became the first generic ARV manufacturer in the world to
receive tentative approval from the FDA for the supply of a generic triple
combination ARV therapy in a co-packed form. The approval is classified as
`tentative` as there are still patents over the originator products in the
United States. This approval qualified Aspen as the first generic supplier under
President Bush`s Emergency Plan for AIDS relief (`PEPFAR`) programme to which
funding of US$15 billion has been committed. Aspen is also one of the only three
ARV manufacturers worldwide which is recognised by the Clinton Foundation
initiative for combating HIV/AIDS. This international recognition endorses
Aspen`s world-class development and production capabilities for quality,
affordable generics.
Aspen has committed substantial resources to making submissions for the
requisite ARV product registrations in each of the territories where it is able
to supply ARVs under the PEPFAR programme. Steady progress has been made and
Aspen will make delivery of the first PEPFAR orders during the first quarter of
the new financial year.
The South African government tender for ARVs was awarded in March 2005. Aspen
was successful in the tender for all the products for which it made a submission
and is scheduled to supply the bulk of tender volumes. Tender offtakes have
commenced. Offtake quantities are planned to grow progressively through the term
of this three-year tender.
In April 2005 it was announced that Aspen and Gilead Sciences, Inc. a leading US
based research pharmaceutical company, had signed a letter of intent to enter
into a non-exclusive licensing and distribution agreement for Gilead`s ARV
products Truvada and Viread. Aspen will manufacture finished product for the 95
resource-limited countries included in Gilead`s global access programme and will
distribute the products in Africa. The two companies are working together
actively in progressing this arrangement.
Aspen and Merck Sharpe & Dohme SA(MSD) are engaged in ongoing discussions
relating to the formal license agreement required by a non-binding Letter of
Intent for MSD to grant Aspen a license to manufacture and supply a generic
version of Efavirenz, one of MDS`s ARVs used for the treatment of HIV/AIDS.
Black Economic Empowerment: In June 2005 Aspen completed a
R645 million BEE deal with the Imithi Consortium, a broad-based consortium
comprising healthcare industry, trade union and community development groups.
The lead participant in the Imithi Consortium with a 50,4% stake is CEPPWAWU
Investments, the investment arm of COSATU-affiliated CEPPWAWU, the trade union
representing Aspen`s unionised employees. CEPPWAWU Investments extended its
interest in Aspen through this transaction, having previously acquired 8% of
Aspen in a BEE transaction concluded in January 2002. Following the latest
transaction direct BEE investors hold 12% of Aspen`s ordinary share capital and
control 16% of the voting rights. Direct BEE shareholding in Aspen could rise to
18% should the Imithi Consortium exercise its rights to convert the 17,6 million
convertible redeemable and cumulative preference shares issued by Aspen in the
transaction and exercise its call option on 6,1 million Aspen shares acquired by
the primary funder of the Imithi Consortium, the Industrial Development
Corporation of South Africa Limited.
Prospects: The Constitutional Court`s ruling on legal challenges to the recently
implemented healthcare legislation is anticipated shortly and will provide
greater clarity on future trading practices.
The Group`s South African business has entered into an exciting phase of
unprecedented new product launches. Aspen expects this activity will allow it to
maintain its position as the leading provider of generic medicines in both the
private and public sectors in the year ahead. Sales of ARVs are expected to grow
materially as Aspen services the South African market and the PEPFAR
territories. New products are also expected to provide additional impetus to
Aspen`s growing consumer product portfolio.
There will be substantial focus on optimal utilisation of production capacity
within the Group over the forthcoming year. Planned increased outputs from the
OSD facility, should relieve pressure on other production facilities and unlock
production efficiencies.
The accreditations received for the OSD facility have created a number of export
manufacturing opportunities and has opened the way for the Group to explore new
markets.
Capital Distribution: Taking into account the earnings performance and strong
cash flows for the year, notice is hereby given that (subject to ratification by
shareholders at the Annual General Meeting to be held on Wednesday, 26 October
2005) a capital distribution of 48 cents per ordinary share has been declared,
payable to shareholders recorded in the share register of the company at the
close of business on Friday, 11 November 2005.
This represents an increase of 60% over the previous year dividend distribution
and is covered 3 times (prior year 3,46 times) by headline earnings per share.
In compliance with (IAS 10) AC 107, Events after Balance sheet date, the capital
distribution will only be accounted for in the financial statements in the year
ending 30 June 2006. It remains the policy of Aspen to declare a final
distribution to shareholders when the preliminary results for each financial
year are released.
Subject to the abovementioned approval of shareholders, and in compliance with
STRATE, the company has determined the following salient dates for the payment
of the capital distribution:
Last day to trade cum capital distribution Friday, 4 November 2005
Shares commence trading ex
capital distribution Monday, 7 November 2005
Record date Friday, 11 November 2005
Payment date Monday, 14 November 2005
Share certificates may not be dematerialised or rematerialised between Monday, 7
November 2005 and Friday, 11 November 2005, both days inclusive.
By order of the board
SB Saad MG Attridge HA Shapiro
(Group Chief Executive) (Deputy Group Chief Executive) (Company Secretary)
Woodmead: 22 August 2005
Aspen Pharmacare Holdings Limited (`Aspen`)
(Registration number 1985/002935/06)
Share code: APN ISIN: ZAE000066692
http://www.aspenpharma.com
Date: 22/08/2005 01:00:15 PM
Produced by the JSE SENS Department
