Aspen 6 month numbers - still showing good growth

Aspen Pharma released numbers yesterday afternoon, remembering that we covered their trading update a while ago -> Aspen Trading statement. That was pretty detailed, for a trading update. I guess the reason why we went into all the detail was simple, the stock has really performed badly. And often people refer to the company and the stock price as one and the same, we are all guilty of that. So, I guess when the share price is sliding away, there is something "wrong" with the company, when the stock price goes up, it has to be a "good one". Human nature dictates this to be so, for many of us.

Herewith the Aspen Unaudited Interim Financial Results - Six Months December 2015 download, it certainly looks a whole lot better than the SENS release, which looks pretty average I'll have you know. I wonder why the Stock Exchange News Service posts the message in such a garbled old manner, it really looks like 1970's style publishing. Anyhow, that aside, Aspen Pharma is a company that has certainly served their shareholders well over the years. The transformation is nothing short of magical.

Over ten years, the stock is up around 639 percent. Stephen Saad in his personal capacity has become (on paper), along with old pal and co-founder (and CFO), Gus Attridge, a real wealthy man. As far as I can tell, Gus was actually Stephen's team leader when they audited together, the roles have certainly changed a little. Gus is 54 and Stephen is 51. They are still pretty young in terms of the fact that they are founders, and seeing over as CEO and CFO of a 140 billion Rand business.

The company reported operating profits before tax of 43 percent more than the prior corresponding period, the half year to December. Revenues were marginally lower. The capital distribution to shareholders is still very modest, yet we should expect more in time. The group needs to pay down debt (that they are restructuring), and will continue to identify doable transactions. Normalised Headline Earnings per share (HEPS) is the measure that the company uses when measuring performance, that increased 14 percent for the half year to 655 cents per share. The stock, at a little over 300 Rand is certainly not cheap, if you annualise that, you get to 23 times forward.

The future? Well, if you dig into the results you will see that the company is targeting another 2.5 billion Rand in EBITA by 2019, that is three years down the road. If you put that into context, that is two and a half time the current contribution from the South African business, no mean feat at this stage. We continue to believe in the passion of the management team, there are few places in life where you get an opportunity to own a little piece of genius, alongside founders and business champions, than in the equities market. Think about that, you can for a mere 137 Dollars, own a piece of Warren Buffet's empire in a Berkshire B share. Where else can you participate? Equally, we continue to believe that Aspen is a very attractive investment, notwithstanding the tough operating environment in some of their territories (Venezuela gets a big look in in these results, we knew that). We continue to accumulate.