Ascendis to widen international exposure, eyes Australian, European assets

JSE-listed Ascendis Health has set its sights on further international acquisitive growth in Australia and Europe to improve its hard currency revenue base, as it emerged from a period of consolidation within its South African operations and following the integration of its first international acquisition in Europe.

The health and care company, which “proved resilient” in difficult trading conditions during the six months to December 31, said on Wednesday that the current financial year had primarily been about consolidation following numerous acquisitions in the past three years.

“Management has been focused on maximising the efficiencies and the synergies between the business units and the fruits of these efforts are demonstrated in the quality of the underlying financial results,” the company said, updating the market on the financial performance in the first half of the year.

During the interim period, Ascendis posted double-digit growth across the board, with headline earnings per share (HEPS) surging some 37% to 49c and normalised HEPS increasing 31% to 56c apiece.

The company recorded strong profit growth of 66% to R147-million, with earnings before interest, taxes, depreciation and amortisation up 50% to R287-million during the period under review.

A 40% surge in revenue to R1.9-billion was reported during the six months to December.

“The group is targeting to achieve 30% revenue from outside South Africa in the medium term through its international expansion strategy, which includes exports, establishing own offices or subsidiaries and acquiring international businesses,” Ascendis noted as it continued its development into a global company founded on South African health brands.

During the period under review, the group concluded its first international acquisition, forking out R210-million in August for a 49% stake in Spanish pharmaceutical group Farmalider.

Ascendis had the right to acquire the remainder of the business over the next five years. The cross-licensing of dossiers between Farmalider and the Pharma-Med division in South Africa was already under way.

The new addition had contributed R212-million in sales and R29-million in profit after tax during the period under review.

Ascendis had also successfully integrated the The Scientific Group, which was acquired a year ago, into the Pharma-Med division, while smaller bolt-on acquisitions were concluded and integrated into the company’s three operating divisions.

A R345-million acquisition of the pharmaceutical business of Akacia Healthcare was also on the cards, with the final condition precedent expected to be met this month.

“The finalisation and integration of the Akacia acquisition for the Pharma division will enhance operating margins and open up new distribution channels for Ascendis Pharma,” the company commented.

Further opportunities were being evaluated for the acquisition of platform companies in Australia and Europe for all three of Ascendis’s divisions.

In South Africa, the group was in negotiations for further bolt-on acquisitions across all divisions.

Ascendis declared an interim dividend of 9.5c a share for the six months to December.