AFT Pharmaceuticals - Re-acceleration leveraging its platform

Overcoming COVID-19 headwinds, AFT Pharmaceuticals reported strong FY22 year results, largely driven by management’s ability to leverage its broad infrastructure to launch new products and push through price increases. Revenues increased 15.2% y-o-y to NZ$130.3m, aided by double-digit growth across all regions. Margins benefited from price increases and scale economies. Management has guided for the FY23 operating profit to be in the range of NZ$27–32m (NZ$20.4m reported in FY22) driven by domestic market traction and ramp up in global roll-out of Maxigesic variants. Following this improved operating performance, the company has announced the initiation of a dividend policy (anticipated to be 20–30% of normalised profit after tax starting FY23). We have increased our valuation slightly to NZ$681m or NZ$6.50/share, from NZ$671m.