AFT says it expects to report a full-year underlying operating profit in a range of $18m to $23m. Photo: Public domain
AFT Pharmaceuticals' first-half net profit is down two thirds on the year earlier, hit by a drop in income from licensing and increased spending for growth.
Key numbers for the six months ended September compared with a year ago:
- Net profit $1.5m vs $4.2m
- Revenue $65.8m vs $55.5m
- Underlying operating profit $3.5m vs $5.5m
- Gross profit margin 43.6 percent
While the result was below market expectations, managing director Hartley Atkinson said it was a good first half with strong growth in sales.
"We did have some lumpy licensing income last year that boosted our first half, but if we look at the overall results in terms of sales - sales increased without licensing by 30 percent, Australia grew 24 percent, New Zealand 35 percent, Asia 26 percent and international, in terms of product sales and royalties, grew by 68 percent, so we were really pleased with the strong sales growth we saw," he said.
The Maxigesic manufacturer also increased its investment in growth to support new product launches in Australia and New Zealand as well as establishing a new sales team focused on Australian General Practitioners.
The additional investment was aimed at meeting a revenue target of $200m.
The company also downgraded its full-year outlook given the increased investment and a delay in commercialising the intravenous form of the company's pain relief medicine, Maxigesic IV, in the United States.
"We've had some delays in the United States with the Maxigesic IV rollout, which we are still confident will happen next year rather than this year," he said.
"And then also we have made a deliberate decision to invest more money in terms of promotion and people on the ground in the Australasian market ... because we do see there's a lot of opportunity to accelerate our growth within our local markets as well."
AFT expected to report a full-year underlying operating profit in a range of $18m to $23m, which compared with a forecast $27m to $32m at the start of the financial year ended March.
The company also expected to declare a maiden dividend for the 2023 financial year.