JOHANNESBURG - Drug company Aspen Pharmacare said on Thursday it had concluded an agreement to divest of its Nutritionals business to the Lactalis Group, a leading multinational dairy corporation’ based in France, for a fully funded cash consideration of R12.9 billion.
Aspen also reported a three percent increase in revenue to R42.6 billion in the year ended June 30, while normalised headline earnings per share rose by 10 percent to 1 605 cents.
The company said the disposal of Nutritionals would allow its business units in Asia Pacific, Latin America and sub-Saharan Africa to dedicate all of their time and attention to their core pharmaceutical businesses and this heightened focus was expected to drive increased business efficiency and performance.
"Aspen believes that Lactalis’ entrepreneurial spirit and commitment to develop a leading global position in infant nutrition will provide the Nutritionals Business and the transferring Aspen employees with exciting future opportunities for growth and development," it said.
"Further divestments will be considered where portfolios are identified which are no longer aligned to the Group’s specific areas of focus."
Aspen said lower earnings in the second half of the year compared with the first half were primarily influenced by the unfavourable impact of a stronger rand.
Taking into account the earnings and cash flow performance for the year, existing debt service commitments, the expected completion of the disposal of the Nutritionals business, future proposed investments and funding options, it declared a gross dividend of 315 cents per ordinary share.
Aspen said emerging markets were expected to continue to lead growth in commercial pharmaceuticals, while supply constraints were expected to impact anaesthetics at a similar level to that experienced in the past year.