Edison Investment Research - AFT Pharmaceuticals (AFT) AFT Pharmaceuticals - Growth underpinned by international momentum

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Edison Investment Research

Sean Conroy

AFT Pharmaceuticals - Growth underpinned by international momentum

AFT Pharmaceuticals’ FY24 results demonstrated record earnings and sales, with 24.8% year-on-year sales growth. Revenues of NZ$195.4m were driven by strong domestic market performance (+13.6%) and solid traction from international (Asia and RoW) markets (+ 108% y-o-y, supported by a NZ$6m milestone payment from US partner Hikma). Investments in future growth (R&D and marketing) and sales-mix effects slightly affected margins adversely (operating margin of 12.4% in FY24 vs our expectation of 12.8%) but we anticipate the upfront investments will provide a revenue uptick from FY26. AFT’s balance sheet remains strong, allowing for a dividend announcement for FY24 (1.6c/share; c 10% payout ratio) and a reduction in debt, both positive signs for investors. We tweak our estimates for the results and FY25 guidance (operating profit of NZ$22–25m, excluding any licence payments), resulting in our valuation adjusting to NZ$725.5m or NZ$6.92/share (from NZ$698m or NZ$6.65/share).

23/05/2024 1 EN

Underlying

AFT Pharmaceuticals

AFT Pharmaceuticals is engaged in the distribution of pharmaceutical products and the development of pharmaceutical intellectual property.

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NZAFTE0001S4 NZX New Zealand

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Sean Conroy

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AFT Pharmaceuticals - Growth underpinned by international momentum

AFT Pharmaceuticals - H125 profitability weighed down by one-offs

AFT Pharmaceuticals - Maxigesic IV reaches the Chinese shores

AFT Pharmaceuticals - Hikma partnership expands to include Combogesic

Accsys Technologies - Upgrading guidance for the full year

Topps Tiles - Market outperformance again in FY24

Nabaltec - Resilience and margin expansion

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