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Ascendis Health: Growing despite a tough Market Place |#eBizMarketing | Dr. Karsten Wellner

Ascendis Health: Growing despite a tough Market Place |#eBizMarketing | Dr. Karsten Wellner

Listed health and care brands group, Ascendis Health, today reported operating profit growth of 84% to R161 million for the six months to December 2014, driven by strong revenue growth of 101% to R1.3 billion.

Headline earnings increased by 65% to R89 million with headline earnings per share up 21.6% to 35.5 cents, impacted by the 35% increase in the weighted average number of shares in issue during the period.

The group declared an interim dividend of 8 cents per share, reflecting the strong cash generation of the business and the director’s confidence in the group’s prospects.

Chief executive officer, Dr Karsten Wellner, said the strong revenue growth was attributable to comparable organic growth of 14.9% and R617 million from strategic acquisitions concluded over the past year.

The Consumer Brands division increased revenue by 55% to R462 million and accounted for 35% of group revenue, Pharma-Med grew 654% to R531 million (40% of total revenue) and Phyto-Vet increased revenue 16% to R340 million, contributing 25% of group revenue.

We are targeting to achieve 10% to 15% organic revenue growth from the group’s strong and resilient brands. This is supported by the acquisition of complementary businesses, brands and dossiers targeting a further 20% – 25% revenue growth.”

In October 2014 Ascendis announced the acquisition of the diagnostics business of The Scientific Group for R284 million which was finalised at the end of February 2015. “This acquisition, together with our Surgical Innovations and Respiratory Care Africa businesses, will create a R1 billion Ascendis Medical platform and position us as the country’s second largest medical device company,” he said.

“The diagnostics product range of The Scientific Group will further entrench a turnkey offering of medical equipment and devices to private and public hospitals, clinics and medical professionals.”

Ascendis undertook a successful private capital raising of R455 million during the period which was partially used to fund the acquisition of The Scientific Group.

The acquisitions of Respiratory Care Africa and Arctic Healthcare both became effective during the reporting period. Respiratory Care Africa distributes specialist medical equipment for intensive care, trauma units and operating theatres in state and private hospitals. This range of equipment is complementary to Surgical Innovations.

Arctic offers a range of market-leading vitamin and mineral brand dossiers, including Chela-Fer, Menacal7, Chela-Preg and Supa Chewz. The integration of the Arctic business into Ascendis Consumer Brands has now been completed.

Dr Wellner said Ascendis is rapidly growing its foreign customer base and the international expansion strategy includes exports, establishing offshore operations and acquiring international businesses.

Ascendis brands are currently sold in 52 countries globally, including 22 other African countries. Revenue generated from foreign markets in the past six months increased by 10% to R114 million, accounting for 9% of the group’s total sales. The group is targeting to achieve 30% of revenue from international markets by June 2017.

On the outlook for the group, Dr Wellner said the priority is to deliver on its organic and acquisitive growth strategies. “Ascendis owns a portfolio of leading South African brands and plans to maximise the export potential of these brands and to focus on offshore acquisitions to grow its international operations.”

We are currently considering the pursuit of international acquisitions for the Pharma-Med platform. We are also evaluating potential bolt-on acquisitions for the Consumer Brands and Phyto-Vet divisions,” he added.

Dr. Karsten Wellner in conversation with eBizRadio’s Nick Snow

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