Aspen’s annual turnover hits a record R4bn
Consumer Industries Correspondent
PHARMACEUTICAL group Aspen Pharmacare Holdings said yesterday it hit record turnover of R4bn in the year to June from R3,5bn the previous year, its ninth successive year of growth, and was laying the groundwork to triple manufacturing capacity.
CE Stephen Saad said Aspen’s investment in operational production capabilities since 2003 was expected to reach R1bn in the next financial year.
Construction of its sterile facility was nearing completion, and commercial production was due in the second half of calendar 2008. An upgrade project on the heritage general facility had started.
Aspen would also benefit from additional bottle packing capacity through an extension to the oral solid dose facility to cater for increasing demand for antiretroviral drugs packaged in that format.
Aspen had also not ruled out acquiring select Adcock Ingram business units should Tiger Brands decide to dispose of some interests. Saad said “we’d be very interested”, although the scope of the acquisition would be limited by the competition authorities.
Tiger Brands said in April it had appointed UBS to evaluate whether it should sell, unbundle or separately list all or part of pharmaceutical and hospital products businesses of wholly owned subsidiary company Adcock Ingram Holdings. Tiger would retain certain aspects of the business, it said.
Aspen said the local unit, which accounted for 74% of group turnover, had performed well despite price increases having been limited to 5% since January.
Its South African business grew revenue 15% to R3,266bn from R2,849bn, while earnings before the deduction of interest, tax and amortisation expenses grew 20% to R1,053bn from R913m.
Saad attributed the growth to increased volumes and new products coming on stream. The company had been able to keep margins almost steady despite a volatile rand, wage increases and pressures on pricing increases.
New areas such as hormonal drugs should contribute to margin growth, Saad said.
Aspen, which said it was now the largest pharmaceutical company in both the public and private sectors, was bullish on growth prospects. Public sector tender awards announcements were expected soon and it was optimistic that it would secure an increased share of government business.
An antiretroviral tender due for submission later this year would be awarded early next year, and the company expected to remain an “important supplier” of antiretrovirals to SA’s government.
The private sector also boded well for growth, said Saad. The government’s medical scheme should contribute to its growth pipeline, he said.
Aspen’s share price gained R1,10, or 3,5%, to close at R32,20 on the JSE yesterday, after more than 1,4-million shares were traded in 384 deals.