Aspen 6M - Debt Coming Down


On Thursday evening Aspen announced their six month figures. The numbers were largely in line with what they had earlier announced to the market in their trading statement.


Aspen Trading Update - Debt Under Control


On Friday evening Aspen released a trading update which included a fair amount of important information. Revenues are expected to grow between 2-4% and normalised headline earnings per share are expected to come in between R7.46 and R7.77 for the 6 months ending December 2019. Trading at R107 a share and making R7.50 in 6 months, this company is cheap.


Aspen FY Numbers - Back on Track


We have owned Aspen Pharmacare in Vestact JSE portfolios for many, many years. We started buying them in July 2005 when the share price was R27.55.


What to do with Aspen?


What is going on at Aspen? They closed last night below R70 a share, a price they were at in 2010. The company released a sens yesterday indicating an anticompetitive fine in the UK of 8 million Pounds. Although that amount is not crippling it represents a sign of desperation within the corporate culture.


Apen FY Numbers - Debt is a Worry


Africa's pharmaceutical giant Aspen, reported very soft interim numbers on Thursday night, sending the share price down as much as 50% intra-day on Friday. The stock eventually closed down 29%, at the lowest levels in seven years. The main concerns were mounting debt on the balance sheet and the delayed sale of the infant nutrition business.


Aspen Hurts


Aspen Pharmacare, a long-beloved Vestact stock, reported its annual results yesterday, for the period to the end of June 2018. Simultaneously, they announced the sale of their global infant nutritional (baby milk formula) business, for just under R13 billion.


Aspen 6-month numbers - solid growth


Towards the end of last week Aspen released their 6-month results for the period ending 31 December 2017. As expected from the trading update, the growth in earnings looked solid. Revenues grew by 11%, and headline earnings grew by 26%. The below table shows the businesses product breakdown by revenue. The pie graph below then shows the product mix by region.


Aspen get approval for Alula in China


Yesterday Aspen announced that they received approval in China for their Alula brand of infant milk formula. The company indicated in their last set of results that they were on track to get the approval, it is still a huge step for the company. You may remember the 2008 Chinese milk scandal, where babies in China died and thousands were hospitalised due to poorly manufactured infant formula. The result of the scandal is that brands matter in China. You would rather pay up for a well know international brand than an unknown local brand.


Aspen's intangible assets


One of the main concerns with Aspen is their high intangible asset level on the balance sheet. An intangible asset is an asset that is not physical in nature and includes things like trademarks, patents and goodwill. This often means that the valuation is somewhat subjective.


Aspen, Viceroy rumours


For many investors they had flashbacks of Steinhoff yesterday as the Aspen share price dropped 10% and the the words 'Viceroy report' were mentioned. Viceroy Research were the guys who published a report showing how Steinhoff were cooking the books. This Tweet from Viceroy in late December confirms that they have a South African company in their sites.


Aspen FY numbers - Back on track


On Thursday we had full year earnings from Aspen, one of our biggest local holdings. This one certainly deserves a closer look.


Follow up to results


Some more on the Aspen H1 results from yesterday. Make sure that you watch this fabulous interview (that lasted longer than initially) - Aspen H1 normalised HEPS up 6%, see the imbedded video below. Self inflicted (supply chain) problems in South Africa, those have been fixed and a turnaround is afoot. An interesting question, when asked about why own Aspen today, at these levels, he gives an answer which I suspect a shareholder should expect. He said that 40 reporting periods of increased earnings, time and time again, tells you something. And he tells of how the business was harder at the beginning, cap in hand sitting in front of the bank manager. In some ways he says, it is easier to run a bigger business. Interesting perspective, not too dissimilar to those of Phil Knight of Nike in his book, Shoe Dog.


Aspen HY 2017 - locking down purchases


Aspen released numbers for their six months to end December this morning. This is a business that has transformed from being a small to major generics business, to now positioning themselves as a (in their words) "global, multinational organisation focused on therapeutic specialties." Anticoagulants (to treat thrombosis) and anesthetics, much of this is new business. This compliments their older businesses, infant nutritional (formula and the like) and lastly the High Potency & Cytotoxics division.


Aspen's fine in Italy


I read (thanks to Google alerts) that Aspen to appeal Italian Competition Authority fine for alleged excessive price hikes. When is it acceptable to stick up the price of a therapy? Aspen are arguing, as per the news article, that they were charging 2 Euros (30.41 Rand) per pill. A pill a day for a month is then 912 Rand, 60 Euros of course. These are blood cancer drugs and were approved for sale back in 2013.


GSK sells all their Aspen


It was bound to happen sooner or later, the news filtered through Wednesday evening via Reuters that GlaxoSmithKline (GSK) were selling their remaining stake in Aspen. Stephen Saad was asked at the CNBC Africa's awards ceremony on Thursday evening what he thought of all of this, and about the future of the business. 28.2 million shares, or 6.2 percent of the business was placed via an accelerated bookbuild. No price was given. Back to the interview, Saad was given the "All Africa Business Leaders Award for Southern Africa" - here is the interview: Aspen CEO wins the AABLA 2016 Entrepreneur of the Year award.


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