AFT reaffirms guidance and progresses growth plan
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
Market re lease 18 November 2021
UNAUDITED FINANCIAL RESULTS FOR THE HALF YEAR TO 30 SEPTEMBER 2021
AFT reaffirms guidance and progresses growth plan
HIGHLIGHTS*
• Revenue rises 14% to $55.5 million from $48.8 million despite multiple COVID-19
challenges
• Growth led by International (+74%), New Zealand (+15%) and Asia ( +32%)
• License income of $4.8 million from $0.3 million
• Sales in Australia (+2%) and international product sale revenue, (-35%) were hampered
in the short term by lockdowns, delayed launches and supply chain constraints, while
global Maxigesic sales in the prior year were bolstered by stock pipeline builds
• Operating profit more than doubles to $5.5 million from $2.4 million lifted by high margin
licensing revenue
• Net profit after tax more than triples to $4.2 million from $1.2 million.
• Net debt of $32.6 million down from $35.2 at the end of March 2021 and $34.3 million
at the end of September 2020. Cash balance improved to $5.9 million from $3.2 million
at year end.
• Maxigesic
®
commercialisation momentum continues with registration approval of the
intravenous and oral dose forms in 51 countries. The medicine is now sold in 47
countries.
• Guidance for an operating profit of $18 million to $23 million reaffirmed for the year to
31 March 2022 with product launches and improving market conditions expected to
underpin a traditionally stronger second half of the year.
*All comparisons are to the prior half year unless otherwise stated
AFT Pharmaceuticals (NZX; AFT, ASX; AFP) today reports improving results for the half year to 30
September 2021 and - despite the disruptions of COVID-19 – has made good progress putting
in the foundations for sustained growth in the years ahead.
The company has continued to consolidate its strong position in the Australasian over the
counter (OTC), prescription and hospital pharmaceutical markets and grown its Asian business
with new product launches and regulatory approvals.
It has advanced its programme to commercialise its portfolio of Maxigesic pain relief
medicines. It has also further progressed its development pipeline, including commencing a
new study examining the potential for its dermatology product, Pascomer as a treatment for
‘port wine stain’ birthmarks.
FINANCIAL RESULTS
Revenue for the six months to 30 September 2021 grew 14% to $55.4 million from $48.8 million
in the same period a year ago, led by International, New Zealand and Asia.
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
The rise also reflects strong growth in income from out-licensing Maxigesic, including income
from the landmark US licensing agreement with Hikma Pharmaceuticals signed at the start of
the half year period.
These gains were tempered by positive – albeit subdued growth - in Australia and slower
product sales in international markets principally due to COVID-19 related disruptions,
including delayed launches in international markets. Sales in the international business in the
prior year were also lifted by stock pipeline fills that were not repeated in the current financial
year but sales royalties have now increased consistent with increasing sell through during this
period.
Operating profit more than doubled to $5.5 million from $2.4 million in the prior half year, lifted
by high-margin licensing revenue and some price increases.
AFT also increased marketing investment in the company’s Australasian and Asian brands
aimed at building or sustaining their leadership position in these markets and lifted research
expenditure in R&D projects to drive long term growth in the business.
Net profit after tax more than tripled to $4.4 million from $1.2 million in the prior year with the
increase reflecting improvements in operating profits and the benefits of lower finance
charges.
The company remains well funded. Net debt at the end of the half year was $32.6 million,
down from $35.2 million in March and $34.3 million at the same time a year ago. AFT reduced
its overall working capital, whilst retaining Inventory at elevated levels in line with AFT’s position
to protect itself from any ongoing supply chain disruptions which were foreseen 12 months
ago.
A detailed discussion of the company’s financial performance for the half year period is
detailed below and in an investor presentation released to the NZX and ASX this morning
and available on AFT’s investor centre https://investors.aftpharm.com/Investors/
AFT Pharmaceuticals Chair David Flacks said: “COVID-19 has represented a continuing
headwind to our progress over the half year. Nevertheless, we have still delivered a strong
improvement in revenue and earnings.
“We see these conditions as a temporary setback. We are seeing broad improvements in
global markets as most countries around the world move to living with COVID-19 and we are
confident of an acceleration of growth in the traditionally stronger second half of the financial
year.”
AFT Pharmaceuticals Managing Director Dr Hartley Atkinson said: “Our New Zealand business,
which although affected by COVID-19 restrictions in the latter part of the six-month period,
demonstrates the unconstrained potential of our Australasian operations.
“It has grown New Zealand revenue by more than 15% over the same period a year ago and
benefitted from a more open, albeit still challenging, trading environment, relative to offshore,
and strong demand across its medicine portfolio including Maxigesic. Asian markets have also
performed well.
“Extended COVID-19 lockdowns in New South Wales and Victoria have hampered OTC sales
of AFT’s medicines in Australia despite the introduction of COVID-19 related products such as
our long-lasting hand sanitiser Crystawash Extend and face masks.
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
“International markets, and particularly the EU, have been similarly affected by COVID-19. But
the impact on AFT’s financial results appears greater because the prior half year result
benefitted from licensees buying stock to fill their distribution networks.
“Launches of the intravenous Maxigesic IV in Austria and Germany, among other markets,
have been hampered by COVID-19 related restrictions on distributors accessing hospitals, the
primary customers of the medicine.
“Group operating profit margins have remained resilient and were lifted by licensing income
and some price increases. However, rising product and distribution costs that have not yet all
been passed on to customers have weighed on international margins.
“Despite these challenges, we continue to put in place the building blocks that will underpin
the long-term growth around the world and extend our record for driving improvements in
shareholder value.
“However, there is a silver lining in COVID-19 whereby we have used the time gained from less
travel to significantly upscale our in-licensing operations and consequently we now have plans
to launch more than 30 new products in Australasia over the next 18 months. In Asia we are
establishing new distribution channels for our OTC portfolio. This has included the trial with T-
Mall which we plan to soon expand and more recently we signed a distribution agreement in
Singapore with the ASX-listed McPherson’s.
“We have continued to advance our programme to commercialise Maxigesic globally,
securing new registrations and filling out our global licensee footprint.
“We remain on track to have launched the medicine in 53 countries by the end of the financial
year and stand to benefit from product sales, milestone payments and royalties or a share of
the profits.
“The US agreement we secured with Hikma Pharmaceuticals, for instance, has the potential
to deliver upfront, regulatory, and commercial milestone payments of up to US$18.8 million. It
delivered AFT US$3.6 million in the half-year period.
“Finally, we remain excited about the potential of our development pipeline. The pending
launch of a new study in Spain examining the potential for our medicine Pascomer as a
treatment for ‘port wine stain’ birthmarks demonstrates our growing R&D pipeline.”
MAXIGESIC COMMERCIALISATION:
Product Maxigesic tablets Maxigesic IV Maxigesic oral solution
Territories 31 Oct
2021*
31 March
2021
31 Oct
2021*
31 March
2021
31 Oct
2021*
31 March
2021
Licensed 100+ 100+ 100+ 100+ 100+ 100+
Registered 51 49 29 21 2 0
Sold in 46 43 5 3 0 0
Maxigesic tablets have been registered in a number of major markets – with the notable
exception of the US, where our application now sits with the US Food and Drug Administration
and we expect approval during the 2022 calendar year. We have continued to fill in the gaps
gaining regulatory approvals in Chile, Peru with further filings underway or in progress.
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
Notable tablet launches since March have included Switzerland and Greece bringing the total
number of countries where the tablets are sold to 46. Maxigesic tablets are the number one
ibuprofen, paracetamol combination in Australia and this demonstrates the potential for the
medicine around the world.
Maxigesic IV was registered in markets in Central America, Greece, Ireland, Poland, South
Korea and UK and the US FDA has accepted our New Drug Application for the medicine.
Maxigesic IV is now being sold in Germany and Austria (among others). We also progressed
the latest dose form Maxigesic Oral Solution achieving the first regulatory approvals in Italy and
Malta, and we expect registrations to follow in new markets shortly.
The oral dose form illustrates the potential of the Maxigesic family of medicine. We have a
pipeline of line extensions to come to market including hot drink sachets, a rapid absorption
form, Maxigesic Rapid, versions targeted at easing the symptoms of cold and flu as well as a
dry stick sachet. All these products are backed by patents, some such as for example the US
formulation Maxigesic Rapid extending out as far as 2039.
We continue to target sales of the medicine in its various dose forms in 53 markets by the end
of this financial year. The market for oral analgesics globally is attractive by virtue of being
large and estimated to be worth US$17.9B in 2021 and has an expected 5-year CAGR of 9.2%
*1
.
RESEARCH AND DEVELOPMENT:
Despite COVID-19 restrictions limiting face to face contact with our national and international
research collaborators, we have maintained an active programme.
Our study examining the effectiveness of Pascomer for the treatment of facial angiofibromas
has now completed patient enrolment and we are targeting results for the middle of next year.
It had faced delays due to COVID-19 related difficulties in recruiting patients.
We are also excited by the potential for the medicine to treat ‘port-wine stain’ birth marks. We
are commencing a study in Spain that is expected to deliver results in 2022.
A clinical proof of concept study for our NasoSurf nasal drug nebuliser is due to commence
later this year and we are presently developing the first dose form that is in a plastic ampoule
which can be used to directly fill the dosing chamber in the NasoSURF device. Results of the
clinical study are also due in the new financial year.
Meanwhile we continue to invest in a broad of range of studies testing the effectiveness of
new and existing Maxigesic dose forms in various clinical settings. Additionally, we are
preparing to add new projects to our R&D pipeline.
OUTLOOK
“Although there has clearly been an impact from COVID-19 on many aspects of our business
especially the ability to travel and visit key partners and customers, we are nevertheless
encouraged by reports showing an easing of COVID-19 restrictions in our most important
markets around the world” Dr Atkinson said.
As they have opened, we have seen an improvement in sales after a slow period during the
worst of the pandemic in Europe and an acceleration in the latter part of the six-month
period”.
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
“The second half of the year is traditionally stronger for AFT Pharmaceuticals, and we expect
no change to this trend in the current year, especially as there are a number of launches
initially planned for the first half that have been delayed and will now take place in the second
half of the year. These launches come atop additional line extensions and new product
launches planned over the coming months.
“On this basis, our guidance for an operating profit for the year to 30 March 2020 remains at
$18 million to $23 million.
“For these reasons, and assuming no material change to the current trading conditions, we
remain confident of meeting this target.
“Finally, it remains our intention to consider a dividend policy once we have reached our net
debt target of $25 million to $30 million level and our earnings guidance.
“We look forward to updating shareholders as the remainder of the year progresses.”
For and on behalf of AFT Pharmaceuticals Limited, Malcolm Tubby, CFO
For more information:
Investors Media
Dr Hartley Atkinson Richard Inder
Managing Director The Project
AFT Pharmaceuticals Tel: +64 21 645 643
Tel: +64 9488 0232
*1
Research and Markets Report.
About AFT Pharmaceuticals
AFT is a growing multinational pharmaceutical company that develops, markets and
distributes a broad portfolio of pharmaceutical products across a wide range of therapeutic
categories which are distributed across all major pharmaceutical distribution channels: OTC,
prescription and hospital. Our product portfolio comprises both proprietary and in-licensed
products, and includes patented, branded, and generic drugs. Our business model is to
develop and in-license products for sale by our own dedicated sales teams in our home
markets of Australia and New Zealand and in certain Southeast Asian markets, and to out-
license our products to local licensees and distributors to over 125 countries around the world.
For more information about the company, visit our website www.aftpharm.com
.
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
FINANCIAL COMMENTARY
FOR THE SIX MONTHS TO 30 SEPTEMBER 2021
AFT group operating revenue for the six months to 30 September 2022 grew 14% to $55.5
million from $48.8 million in the prior financial first half year, with Australia growing at 2%, New
Zealand growing at 15%, Asia growing at 32% and International growing at 74%.
Gross profit grew 31% to $26.7 million from $20.3 million in the prior first half year. The gross
profit margin improvement of 6.5 percentage points to 48.1% is due primarily to the higher
license income (at a 100% margin) together with a 1.7 percentage point improvement in the
margin from product sales due to some selling price increases
Costs in the prior first half were also higher due to the weaker Australian and New Zealand
dollars and the use of air freight through the start of the pandemic.
Selling and distribution expenses rose to $14.2 million from $12.4 million, remaining at 26% of
operating revenue. We anticipate maintaining a similar percentage of operating revenue for
the coming year as we launch new products to drive revenues in Australia and New
Zealand. Over the longer term we expect these expenses as a proportion of total revenue to
continue to reduce as revenue from the Rest of World grows.
General and administration expenses increased to $4.3 million from $3.9 million due primarily
to investment in increased personnel for growth and increases in insurance and IP expenses.
Research and development expenses rose to $2.8 million from $1.9 million with a ramp up in
development cost spend on the NasoSurf device and increased costs in the in-licensing of
products for Australia and New Zealand together with increased staff costs.
AFT continues to carefully run its Research and Development budgets and to investigate
other sources of funding such as international research grants, including grants from the USA.
Summary Financial Results Half year ended 30 Sept
2021 2020
$'000 $'000
Revenue 55,513 48,821
Cost of Sales (28,808) (28,489)
Gross Profit 26,705 20,332
Other Income 123 230
Selling and distribution expenses (14,237) (12,387)
General and administrative expenses (4,269) (3,895)
Research and development expenses (2,831) (1,858)
Operating Profit 5,491 2,422
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
These efforts to date have been bolstered by agreements for Pascomer that recover Research
and Development costs from our partners, effectively minimising risk, and lowering AFT’s
spending.
Operating profit increased to $5.5 million from $2.4 million. Net Profit after tax increases to
$4.2 million from $1.2 million.
Balance sheet
Total assets increased to $105.7 million from $105.1 million at the 31 March 2021 year end with
the investment into intangible assets all but offset by the reduction in working capital.
In current assets, Inventory remained steady at $34.1 million ($33.7 million at year end). Debtors
reduced to $25.7 million from $31.0 million at year end, improving the cash balance to $5.9
million from $3.2 million at year end.
The amendment to the BNZ facility in May which replaced $5 million of the working capital
loan with the $5 million business finance scheme loan has generated further savings in interest
costs which in turn has improved profit after tax to $4.2 million compared to $1.2 million for the
first half of the prior year.
Australia
Sales in Australia grew by 2% to $29.2 million from $28.5 million in the prior period and represent
53% of Group Operating Revenue. Operating profits rose to $3.6 million from $3.2 million.
The OTC channel continued to be hindered by the Covid-19 lockdowns and restrictions,
primarily in the eastern states. It grew by 2% and is generating 59% of total Australian revenue.
The delayed product launches are now due in the last quarter of the year which will assist the
full year growth.
Maxigesic sales were impacted by Covid-19 restrictions, but have regardless grown at 18%
over the prior first half of last year. The brand maintains its leadership of the paracetamol-
ibuprofen combination section of the pain management market.
Our eyecare range continued to deliver good growth. We retain the number 2 position in the
lubricating eyecare category in Australia and the number 1 selling SKU.
The Hospital channel declined by 1%, due to the return to more usual levels of antibiotic sales,
following the surge in the prior first half of last year in response to Covid-19.
The Prescription channel grew at 13% with the launch of further new products, with other
products, such as penicillin, returning to more usual levels. In the prior half year, sales were
down significantly due to the decline in GP visits during Covid-19 restrictions.
Overall, our significant launch program of new products has been delayed by the ongoing
global restrictions and delays caused by Covid-19 however, we expect them to accelerate
sales growth in the second half, to extend our long-standing record of growth in this market on
a full year basis.
New Zealand
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
Sales in New Zealand grew 15% to $15.8 million from $13.7 million and represented 28% of
Group Operating Revenue. Operating profit, excluding head office costs, increased to $2.0
million from $1.7 million.
The OTC channel grew by 13% to $8.6 million from $7.7 million. This primarily reflects a return to
more normal sales and rates of growth, following the severe impact of the pandemic
lockdowns in the first of half of the prior year. Sales of Vitamin C Liposachets, in particular, have
resumed good growth, having suffered in the first half of the prior financial year from pre-
Covid stockpiling. Maxigesic has also shown strong growth following the re-scheduling of
codeine containing medicines to prescription only at the end of 2020.
We have seen some drop off in general OTC sales following the re-introduction of the
lockdowns in Auckland, but with the anticipated easing over the coming months we expect
to return to good growth levels for the remainder of the financial year aided by additional new
product launches.
The Hospital channel grew at 23% to $2.7 million from $2.2 million with strong sales of antibiotics.
The Prescription channel grew at 15% to $4.6 million from $4.0 million.
Asia Revenue
Sales in Asia grew 32% to $2.9 million from $2.2 million and generated 5% of Group Operating
Revenue. Operating profits declined to $0.4 million from $0.7 million as we invested in our
marketing support of products with growth potential.
The OTC channel grew 11% with the growth in sales on our T-Mall store and in Hong Kong. The
T-Mall flagship store was established last year to drive ecommerce sales into the Chinese
market and additionally build brand recognition ahead of China in-market launches. Early-
stage sales of a limited number of products have been positive and we are working towards
expanding this range. This is a long-term project with significant potential.
These gains more than offset lower sales in Singapore which had benefitted in the prior year
first half from pandemic stockpiling of Maxigesic. The Hospital and prescription channels grew
32% due primarily to strong anti-bacterial sales.
Rest of World Revenue
Sales to the rest of the world grew 74% to $7.6 million from $4.4 million and represented 14% of
Group Operating Revenue.
License income of $4.8 million is up significantly from the $0.3 million for the first half of the prior
year. Royalties earned from the licensees in-market sales grew 134% to $0.2 million from $0.1
million with the post pandemic return to stronger growth in existing markets together with the
launches in new markets.
Product sales to licensees and distributors declined 35% to $2.6 million from $4.0 million as their
stockholdings sold through. Their sales in the main markets of Europe were slower last year
during the height of the pandemic and as a result it has taken longer to sell-through their
stockholdings. However, in-market sales have now recovered.
With the customer orders we have in place for existing and new markets and the positive trends
we are seeing on in-market sales we expect to show growth in product sales for the full year.
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
Operating profit was $ 3.3 million up significantly on the break even for the first half of the prior
year with the increase in revenues partially offset by the additional investment made into
research and development as discussed above.
/ENDS
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
---
Page 1
Working to improve yourhealth
1H FY2022 Investor presentation
18 November 2021
Page 2
Importantnotice
This presentation has been prepared by AFT Pharmaceuticals Limited (“AFT”), to provide a general overview of the
performance of AFT for the half year ended 30 September 2021. It is not prepared for any other purpose and must not be
provided to any person other than the intended recipient.
This presentation should be read in conjunction with AFT’s interim financial statements, market releases and other periodic
and continuous disclosure announcements, which are available at www.nzx.com and www.asx.com.au.
All amounts are disclosed in New Zealand dollars (NZ$) unless otherwise indicated.
All references to financial years appearing in this presentation are for the period ending 31 March, unless otherwise
indicated. This presentation is not a recommendation, offer or invitation to acquire AFT’s securities or other form of
financial advice or disclosure document.
While reasonable care has been taken in compiling this presentation, none of AFT nor its subsidiaries, directors, employees,
agents or advisers (to the maximum extent permitted by law) gives any warranty or representation (express or implied) of
the accuracy, completeness or reliability of the information contained in it nor takes any responsibility for it.
The information in this presentation has not been and will not be independently verified or audited. This presentation may
contain certain forward-looking statements and comments about future events, including with respect to the financial
condition, results, operations and business of AFT.
These statements are based on management’s current expectations, which may involve significant elements of subjective
judgement and assumptions as to future events which may or may not be correct, and the actual events or results may
differ materially and adversely from these statements. Past performance information given in this presentation is given for
illustrative purposes only and should not be relied upon (and is not) an indication of future performance.
Page 3
INVESTOR
PRESENTATION
NOVEMBER
2019
Delivering growth in a COVID-19 headwind
$48.8
$55.5
$64.0
$69.0
$80.0
$85.1
$105.6
$113.1
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
FY2016FY2017FY2018FY2019FY2020FY20211H 2022
NZ$ Millions
Total revenue from operations
1H
$1.2
$4.2
$(2.3)
$3.1
$7.9
-$4.0
-$2.0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
FY2019FY2020*FY20211H 2022
NZ$Million
Net profit before tax
1H
*FY2020 operating profit and net profit before tax exclude one-off non-cash $9.8 revaluation gain on the revaluation of Pascomerassets.
For further detail see page 34 of AFT Pharmaceuticals’ FY2021 annual report.
$2.4
$5.5
$6.1
$11.4
$10.7
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
FY2019FY2020*FY20211H 2022
NZ$ Million
Operating profit
1H
Page 4
INVESTOR
PRESENTATION
NOVEMBER
2019
•Core Australasian markets supported by new product
launches and consolidation of leadership position across
therapeutic focus areas.
•Maxigesic® commercialisation momentum continues
‒Sustained market leadership in Australia
‒Maxigesic IV® licenses extend including the landmark
licensing deal with Hikma in the US and registrations
now in 29 countries.
‒Tablets now sold in 46 countries with Switzerland,
Greece and Lithuania added.
•Accelerating Asia and E-Commerce
•Development portfolio expands with trials for a new
application of Pascomer and ongoing development of
Maxigesic dose forms and NasoSurf
Extending the foundations for AFT’s future growth
Page 5
Strategic and operational update
Page 6
59%
11%
30%
59%
12%
29%
Australia channel
OTCPrescriptionHospital
Australia grows despite lockdowns
$28.5
$29.2
$49.2
$50.3
$61.4
$68.3
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
FY2018FY 2019FY2020FY2021 1H FY22
NZ$ Million
Australia total revenue
1H
•Maxigesic and eyecare ranges lead growth and drive a positive half year outcome
•OTC revenue growth hindered by COVID-19 particularly the Eastern states
•Product launches delayed in the first half planned for the second half of the year
•30new product launches planned between now and the end of FY23
1H 2021
1H 2022
2%
Page 7
New Zealand benefits from fewer restrictions
$13.7
$15.8
$27.1
$26.8
$30.1
$30.5
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
FY2018FY 2019FY2020FY20211H FY22
NZ$ Millions
New Zealand total revenue
1H
•Growth led by the OTC channel (up 13%) and reflects a period of more normal trading, with
Vitamin C Liposachetsand Maxigesic leading growth
•The hospital channel grew 23% lifted by antibiotic sales
•The prescription channel grew 15% with the return to a period of more normal activity
55%
29%
16%
54%
29%
17%
New Zealand channel
OTCPrescriptionHospital
1H 2022
1H2021
15%
Page 8
Hospital/Rx channel underpins Asian result
$2.2
$2.9
$1.3
$2.1
$4.9
$4.4
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
FY2018FY 2019FY2020FY2021 1H FY22
NZ$ Million
Asia total revenue
1H
•Hospital/Rx sales rise 32% due to strong anti-bacterial sales
•TMall store, aimed at reaching into China and building brand recognition, making a growing
contribution to OTC sales. To be extended
•Growth diluted by weaker sales to Singapore of Maxigesic, which stockpiled the medicine in the
prior year.
•ASX-listed McPherson’s to pick up OTC distribution in Singapore
10%
28%
62%
9%
22%
70%
Asia channel
OTCPrescriptionHospital
1H 20211H 20211H 2021
1H 2022
32%
Page 9
Maxigesic drives international licensing and sales revenue
$4.4
$7.6
$3.6
$5.9
$9.1
$9.9
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
FY2018FY 2019FY2020FY2021 1H FY22
$NZ Millions
International total revenue
1H
•Maxigesic IV licensing income drives strong total revenue growth
•Product sales down 35% to $2.6 million as the prior year benefited from stock pipeline fills.
•Sales improving as markets move to living with COVID-19.
•Royalties more than doubled
97%
3%
39%
61%
International channel
OTCHospital
1H 2021
1H 2022
74%
Launched
Launch P endin g
Available
I re la n d– Tablets launched
IV licensed
U n it e dK in g dom– Tablets laun c h e d
IV licensed
Belgium, Luxembourg- Tablets l aunching 2021
IV licensed July 2021
France- Tabletsl aunch ing2021
IV Licensed
Spain&Portugal – Tablets launched
IV licensed
N o r d ic s – Tabletslaun c h e d
IV licensed
EasternEurope&Balkans
- Tablet s launched
EasternEuropeIV- Licensed
I ra q– K u r d is tanla unc h e d
A u stra li a – N o . # 1 P a ra - Ibu C o mb o.
Growing market share
- Maxigesic IVlaunched
UnitedArabEmirates –
Tablet sales strong
Italy – Tablet sales growing
IV Licensed
Greece –Orals and IV
licensed
Germany –Orals Launched 2020
Germany - IV Launched 2021
Switzerland– Tablets licensed2019, launched 2021
Brazil –licensing
negotiationsunderway
Columbia, Peru, Chile-
distributor appointedOrals
IV Licensed 2021
Mexico–Tablets launched 2021
I VLicensed
USA- IV Licensed
IV Submitted for Registration
Tablets - submitted for
registration and licensing
discussions underway
Canada- Tablets l aunch ed2021
CACM– Tablets launched
IV licensed
S in g a pore&B r unei – Tabletsla unc h e d
Russia –Orals licensed
China- licensingnegotiations underway
T aiwan –Tablets Licensed
K o re a – IV licensed
Japan- licensing
discussions
areunderway
Indonesia- distributor appointedforIV
Pakistan-
distributor
appointed
f or IV
Ma la y s ia– Tablets laun c h e d
P h ili p pines–AFT to sell post
registration via distributor
MAXIGESIC GLOBAL UPDATE
[Oral Dose Forms & IV]
Vietnam–distributorappointedforIVand O rals
Austria –IV licensed & launched 2021
Netherlands –IV licensed
Poland –IV and orals licensed
NZ– Maxigesic , Maxigesic PE,
Maxigesic IVlaunched
Thailand –
IV licensed
Page 11
Maxigesicroll out continues across the world
11
2
3
4
7
9
20
28
43
53
84
0
10
20
30
40
50
60
70
80
90
FY14FY15FY16FY17FY18FY19FY20FY21FY22FY23
Countries
Maxigesic countries sold and ordered*
TARGETED MAXIGESIC FY 2022-2023
FY 2022 progress to date:
•Tablets: Launched in
Switzerland, Greece and
Lithuania
•Maxigesic IV: launched in
Germany and Austria
•Oral Liquid: Registered in
Italy and Malta.
ProductMaxigesic TabletsMaxigesic IVMaxigesic Oral Solution
Territories31 Oct 202131 March 202131 Oct 202131 March 202131 Oct 202131 March 2021
Licensed100+100+100+100+100+100+
Registered5149292120
Sold in46435300
Page 12
R&D investment lays foundation for future growth
•Maxigesic dose forms:
‒Maxigesic Cold & Flu final studies underway this year
•Pascomer: Treatment of facial angiofibromas
‒Licensed for North America to Timber Pharmaceuticals and Europe to Desitin
‒Global Phase II/III study patient enrolment closed now despite the pandemic
•NasoSURF: Intranasal drug delivery instead of an injection
‒Clinical studies of the first dose form to commence in FY22
•Other products:
‒Other products in development: Medicinal Cannabis, Crystawash Extend,
Crystaderm
*Research and development costs also include new market development costs.
$9.5
$4.1
$2.0
$3.4
$2.8
$2.5
$1.5
$7.2
$6.0
$2.4
$-
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
FY2018FY2019FY2020FY20211H 2022
$NZ Million
Research and development expenditure*
Expensed R&D costsCapitalised R&D costs
Page 13
Financial performance
Page 14
Six months to 30 September
2021
NZ$ (000)
2020
NZ$ (000)
Change
(%)
Total revenue from operations$55,513$48,82113.7%
Gross profit$26,705$20,33231.3%
Gross profit/revenue48.1%41.6%
Operating expenses and other income $(21,214)$(17,910)18.4%
Operating profit$5,491$2,422126.7%
Operating profit /revenue (%)9.9%5.0%
Net finance expense$(1,059)$(1,193)(11.2)%
Finance expense/revenue (%)(1.9)%(2.4)%
Tax (expense)$(250)$(37)
Net profit after tax$4,1821,192250.8%
INVESTOR
PRESENTATION
MAY 2020
Licensing income lifts earnings; investments for growth
•Gross profit margins improve due to higher license income and price increases
•Selling and distribution expenses expand with investment into Australasian brands, expected to
remain steady as a percentage of Australasian sales going forward
•R&D expenditure rises with investment in NasoSURF development and Australasian in-licensing
costs
•Corporate costs also higher due to investing in increased personnel for growth
Revenue from product sales and royalties $50,706$48,5244.5%
Gross profit from product sales and royalties $21,898$20,0359.3%
Gross profit from product sales and royalties/revenue43.2%41.3%
Page 15
NZ$ (000)
Unaudited
30 Sept ’21
Audited
31 March ’21
Unaudited
30 Sept ’20
Inventories$34,129$33,654$35,995
Cash and cash equivalents $5,907$3,209$5,870
Net debt$32,592$35,152$34,277
Total assets$105,708$105,132$93,983
Total equity$41,096$36,588$29,866
Balance sheet highlights: debt reduces and cash
and equity rise
•Inventories remain elevated to protect the company against supply disruptions
•Cash position building
Page 16
INVESTOR
PRESENTATION
MAY 2020
Cash flow highlights
Six months to 30 September
2021
NZ$ (000)
2020
NZ$ (000)
Net cash from/ (used in) operating activities$6,826$(2,740)
Net cash used in investing activities$(2,770)$(3,889)
Net cash from/ (used in) financing activities$(1,326)$6,704
Net increase/(decrease) in cash$4,731$75
Impact of forex movements on cash and cash equivalents$(33)$(324)
Opening cash and cash equivalents $3,209$6,119
Closing cash and cash equivalents $5,907$5,870
Page 17
Summary and outlook
Page 18
A challenging half year but growth potential remains
strong
Positive achievements across all our key markets
•Good growth in New Zealand, Asia
•Good progress commercialising Maxigesic
•Landmark licensing agreements with Hikma for
Maxigesic IV in the US and FDA acceptance of the
New Drug Application
Covid-19 has impeded our progress
•Supply disruptions delay product launches
•Delays to product launches and regulatory
approvals continue
•Lockdowns, travel restrictions and government-
imposed limits to patient access disrupts OTC
medicine sales
Page 19
Focus for the remainder of FY22 and outlook
Further drive internationalsales
Acceleratenumber of new countries in which Maxigesic islaunched
Growing sales in newly launched markets such as Canada, Germany,
Switzerland
Launchnew line extensions – Maxigesic IV, Hot Drink, Oral Liquid
Extend internationallicensing
FinaliseMaxigesic licensing agreement discussions inBrazil,China and Japan
DriveAustralia and New Zealand sales
Drive Maxigesicsales and line extensions in AU &NZ such as hot drink
Ongoing in-licensing to expand ANZ business
Targeting the launch of circa 30 products before the end of FY23
Financial outlook
Guidance for FY22 operating profit of $18 million to $23 million reaffirmed for
the year to 31 March 2022, assuming the maintenance of margins and targeted
sales outlook
Dividend policy remains on the agenda as we progress debt reduction to the
target of $25 million to $30 million and linked to underlying earnings progress
Page 20
Working to improve yourhealth
Page 21
Appendix 1: Australasian product portfolio
AFT has the #1 selling product (Maxigesic) in the Australian para-ibu
1
combo pain relief. AFT’s portfolio includes a
combination of 125 proprietary, branded and generic products which address the following therapeutic areas:
Pain
Maxigesic, ParaOsteo, ZoRub OA/HP, Fenpaed, Combolieve
Day/Night
Eyecare
Hylo, Novatears, CromoFresh, Opti-soothe Wipes/Mask,
VitAPOS
Vitamins
Ferro-liquid, FerroTab, Ferro-F, Ferro-sachets, Lip VitC,
CalciTab
Allergy
Loraclear, Histaclear, Fexaclear, Levoclear, Allersoothe,
Lorapaed, Becloclear, Steroclear
Gastrointestinal
Gastrosoothe/Forte, LaxTab, Micolette, Nausicalm,
DiaRelieve
Dermatology
Crystaderm, Crystawash Hand Sanitizer, Crystasoothe, ZoRub
anti-chafing, Decazol, MycoNail, RestoraNail
Hospital
Maxigesic IV, Injectables
1
Paracetamol and Ibuprofen
Page 22
Pain
Maxigesic
Medicated
Vitamins
Ferro-sachets, Lipo VitC, Lipo VitD and expanding pipeline –
T Mall
Dermatology
Crystawash Extend Hand Sanitizer, Hemptuary
Hospital
Maxigesic IV, Injectables
Appendix 2: AFT Asian product portfolio
AFT’s Asia portfolio includes a range of proprietary, branded and generic products which address the following
therapeutic areas:
Page 23
Appendix 3: AFT Global product portfolio
AFT is building the global presence of its proprietary and patented products through its network of licensees and
distributors.
It continues the development of its portfolio of repurposed medicines: Maxigesic, Pascomer, NasoSURF, Crystawash
Extend and Crystaderm
Pain
Maxigesic oral dose forms – tablets, solution, hot drink sachet,
rapid, cold and flu
Hospital
Maxigesic IV (intravenous)
NasoSurf – nasal nebuliser drug delivery
Dermatology
Pascomer – primarily North America & Europe
Crystawash extend – selected territories such as Canada &
Middle East
Crystaderm – selected territories such as Canada
1
Paracetamol and Ibuprofen
Page 24
Appendix 4: Maxigesic dose forms extend the market
•Estimated total analgesic market size
$6.2 billion, oral dose forms US5.4
billion and injectable forms US724
million**
•Maxigesic tablets are patent protected
out to 2025-2028, beyond which the
brand name is expected to cement
Maxigesic’s OTC position in the market
*Maxigesic IV is a prescription product for hospital use *Management estimates
Maxigesic® TABLETS
Maxigesic® IV
Maxigesic® ORAL LIQUID
Maxigesic® HOT DRINK SACHET
Maxigesic® RAPID
Maxigesic®
COLD & FLU
Maxigesic®
DRY STICK SACHET
Maxigesic® family growth
Revenue
Time
•AFT is now leveraging the brand goodwill into Maxigesic
variants, including:
―Maxigesic PE (2034 patent)
―Maxigesic Hot Drink Sachet (2025, 2028 patent)
―Maxigesic Dry Stick Sachet (2036 patent)
―Maxigesic IV (2034 [AU] 2031, 2035, 2037 [Global] patents)
―Maxigesic Oral Liquid (2025, 2028 patents)
―Maxigesic Cold & Flu (2025, 2028 patents)
―Maxigesic Rapid (2039 patents)
Page 25
INVESTOR
PRESENTATION
MAY 2020
Appendix 5: Detailed balance sheet
NZ$ (000)
Unaudited
30 Sept ’21
Audited
31 March ’21
Unaudited
30 Sept ’20
Current assets$66,187$67,902$58,549
Non-current assets $39,521$37,230$35,434
Total assets$105,708$105,132$93,983
Current liabilities $25,422$32,102$25,948
Non-current liabilities$39,190$36,442$38,149
Total liabilities $64,612$68,544$64,097
Total equity$41,096$36,588$29,866
Total liabilities and equity$105,708$105,132$93,983
Page 26
AFT was founded 23 years ago by Dr Hartley and Marree Atkinson. Since then AFT has remained an Atkinson-family controlled
business and has grown organically into Australia and internationally
The 2015 IPO raised funds to pursue a more aggressive (and loss-making) R&D-led growth strategy. AFT has now returned to
profitability as intended, as the company was prior to IPO
Appendix 6: History of AFT Pharmaceuticals
199720042005200920132014
2015
2020
AFT founded by Dr
Hartley and Marree
Atkinson
Development of
Maxigesic
commences
First sales into
Australia
Maxigesic registered
in New Zealand and
sales commence
Maxigesic
registered in
Australia
AFT launches the sale
of products into the
SE Asian market
$33m IPO to fund
new R&D
development
programmes for
Maxigesic and other
proprietary products
2019
AFT returns to
profitability following a
significant investment
period funded by the
2015 IPO
In FY20 AFT delivers
over $100m of
revenue and
operating profit
growth of 87%
Maxigesic sales
commence in
Australia
2021
AFT completes licensing
Maxigesic IV to Hikma
for USA
FDA accepts Maxigesic
IV Registration
Page 27
Working to improve yourhealth
---
Results for announcement to the market
AFT Pharmaceuticals Limited
Reporting Period 6 months to September 30 2021
Previous Reporting Period 6 months to September 30 2020
Currency NZ$
Amount (000s) Percentage change
Revenue from continuing
operations
$55,513 Up 14%
Total Revenue $55,513 Up 14%
Net profit/(loss) from continuing
operations
$5,491 Up 127%
Total net profit/(loss) $5,491 Up 127%
Interim/Final Dividend
Quoted Equity Securities:
Amount per Quoted Equity
Security
No dividends have been paid on ordinary shares and it is
currently not proposed to pay dividends.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Unquoted Equity Securities:
Amount per Unquoted
Redeemable Preference Share
Not Applicable
Imputed Amount per Unquoted
Redeemable Preference Share
Not Applicable
Record Dates Not Applicable
Dividend Payment Dates Not Applicable
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
$0.05 ($0.01)
A brief explanation of any of the
figures above necessary to
enable the figures to be
understood
Accompanying this announcement are the Group’s unaudited
consolidated financial statements for the six months ended
30 September 2021. These financial statements and the half
year results commentary dated 18 November 2021 provide
the balance of information requirements in accordance with
NZX Listing Rule 3.5 and Appendix 2.
Pursuant to ASX listing rule 1.15.3 AFT Pharmaceuticals
Limited confirms that it continues to comply with the rules of
its home exchange (NZX Main Board).
AFT Pharmaceuticals Limited, Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969
Authority for this announcement
Name of person
authorised to
make this announcement
Malcolm Tubby
Contact person for this
announcement
Malcolm Tubby, Chief Financial Officer,
AFT Pharmaceuticals Ltd
Contact phone number +64 9 488 0232
Contact email address malcolm@aftpharm.com
Date of release through MAP
18 November 2021
Unaudited financial statements accompany this announcement.
---
INTERIM
FINANCIAL
STATEMENTS
2022
CONDENSED CONSOLIDATED
FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2021
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE SHAREHOLDERS OF AFT PHARMACEUTICALS LIMITED
Conclusion
We have reviewed the condensed consolidated interim financial statements (‘interim financial statements’) of AFT
Pharmaceuticals Limited and its subsidiaries (‘the Group’) which comprise the consolidated balance sheet as at 30
September 2021, the consolidated income statement, consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the six months ended on that date, and a
summary of significant accounting policies and other explanatory information on pages 4 to 20.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements
of the Group do not present fairly, in all material respects, the financial position of the Group as at 30 September 2021
and its financial performance and cash flows for the six months ended on that date in accordance with NZ IAS 34 Interim
Financial Reporting and IAS 34 Interim Financial Reporting.
Basis for Conclusion
We conducted our review in accordance with NZ SRE 2410 (Revised) Review of Financial Statements Performed by the
Independent Auditor of the Entity (‘NZ SRE 2410 (Revised)’). Our responsibilities are further described in the Auditor’s
Responsibilities for the Review of the Interim Financial Statements section of our report.
We are independent of the Group in accordance with the relevant ethical requirements in New Zealand relating to the
audit of the annual financial statements, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
Other than in our capacity as auditor and the provision of taxation advice, we have no relationship with or interests in
AFT Pharmaceuticals Limited or its subsidiaries. These services have not impaired our independence as auditor of the
Company and Group.
Directors’ responsibilities for the interim financial statements
The directors are responsible on behalf of the Company for the preparation and fair presentation of the interim
financial statements in accordance with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial Reporting
and for such internal control as the directors determine is necessary to enable the preparation and fair presentation of
the interim financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibilities for the review of the interim financial statements
Our responsibility is to express a conclusion on the interim financial statements based on our review. NZ SRE 2410
(Revised) requires us to conclude whether anything has come to our attention that causes us to believe that the interim
financial statements, taken as a whole, are not prepared, in all material respects, in accordance with NZ IAS 34 Interim
Financial Reporting and IAS 34 Interim Financial Reporting.
A review of the interim financial statements in accordance with NZ SRE 2410 (Revised) is a limited assurance
engagement. We perform procedures, primarily consisting of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. The procedures performed in a
review are substantially less than those performed in an audit conducted in accordance with International Standards on
Auditing (New Zealand) and consequently do not enable us to obtain assurance that we might identify in an audit.
Accordingly we do not express an audit opinion on the interim financial statements.
Restriction on use
This report is made solely to the company’s shareholders, as a body. Our review has been undertaken so that we might
state to the company’s shareholders those matters we are required to state to them in a review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company’s shareholders as a body, for our engagement, for this report, or for the conclusions we have formed.
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This review report relates to the unaudited condensed consolidated interim financial statements of AFT Pharmaceuticals for the six
months ended 30 September 2021 included on AFT Pharmaceuticals Limited’s website. The Board of Directors is responsible for the
maintenance and integrity of AFT Pharmaceuticals Limited website. We have not been engaged to report on the integrity of AFT
Pharmaceuticals Limited website. We accept no responsibility for any changes that may have occurred to the unaudited condensed
consolidated interim financial statements since they were initially presented on the website. The review report refers only to the
unaudited condensed consolidated interim financial statements named above. It does not provide an opinion on any other information
which may have been hyperlinked to/from these unaudited condensed consolidated interim financial statements. If readers of this
report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of
the unaudited condensed consolidated interim financial statements and related review report dated 18 November 2021 to confirm the
information included in the unaudited condensed consolidated interim financial statements presented on this website. Legislation in New
Zealand governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
2
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This review report relates to the unaudited condensed consolidated interim financial statements of AFT Pharmaceuticals for the six
months ended 30 September 2021 included on AFT Pharmaceuticals Limited’s website. The Board of Directors is responsible for the
maintenance and integrity of AFT Pharmaceuticals Limited website. We have not been engaged to report on the integrity of AFT
Pharmaceuticals Limited website. We accept no responsibility for any changes that may have occurred to the unaudited condensed
consolidated interim financial statements since they were initially presented on the website. The review report refers only to the
unaudited condensed consolidated interim financial statements named above. It does not provide an opinion on any other information
which may have been hyperlinked to/from these unaudited condensed consolidated interim financial statements. If readers of this
report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of
the unaudited condensed consolidated interim financial statements and related review report dated 18 November 2021 to confirm the
information included in the unaudited condensed consolidated interim financial statements presented on this website. Legislation in New
Zealand governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
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This review report relates to the unaudited condensed consolidated interim financial statements of AFT Pharmaceuticals for the six
months ended 30 September 2021 included on AFT Pharmaceuticals Limited’s website. The Board of Directors is responsible for the
maintenance and integrity of AFT Pharmaceuticals Limited website. We have not been engaged to report on the integrity of AFT
Pharmaceuticals Limited website. We accept no responsibility for any changes that may have occurred to the unaudited condensed
consolidated interim financial statements since they were initially presented on the website. The review report refers only to the
unaudited condensed consolidated interim financial statements named above. It does not provide an opinion on any other information
which may have been hyperlinked to/from these unaudited condensed consolidated interim financial statements. If readers of this
report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of
the unaudited condensed consolidated interim financial statements and related review report dated 18 November 2021 to confirm the
information included in the unaudited condensed consolidated interim financial statements presented on this website. Legislation in New
Zealand governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE SHAREHOLDERS OF AFT PHARMACEUTICALS LIMITED
Conclusion
We have reviewed the condensed consolidated interim financial statements (‘interim financial statements’) of AFT
Pharmaceuticals Limited and its subsidiaries (‘the Group’) which comprise the consolidated balance sheet as at 30
September 2021, the consolidated income statement, consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the six months ended on that date, and a
summary of significant accounting policies and other explanatory information on pages 4 to 20.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements
of the Group do not present fairly, in all material respects, the financial position of the Group as at 30 September 2021
and its financial performance and cash flows for the six months ended on that date in accordance with NZ IAS 34 Interim
Financial Reporting and IAS 34 Interim Financial Reporting.
Basis for Conclusion
We conducted our review in accordance with NZ SRE 2410 (Revised) Review of Financial Statements Performed by the
Independent Auditor of the Entity (‘NZ SRE 2410 (Revised)’). Our responsibilities are further described in the Auditor’s
Responsibilities for the Review of the Interim Financial Statements section of our report.
We are independent of the Group in accordance with the relevant ethical requirements in New Zealand relating to the
audit of the annual financial statements, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
Other than in our capacity as auditor and the provision of taxation advice, we have no relationship with or interests in
AFT Pharmaceuticals Limited or its subsidiaries. These services have not impaired our independence as auditor of the
Company and Group.
Directors’ responsibilities for the interim financial statements
The directors are responsible on behalf of the Company for the preparation and fair presentation of the interim
financial statements in accordance with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial Reporting
and for such internal control as the directors determine is necessary to enable the preparation and fair presentation of
the interim financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibilities for the review of the interim financial statements
Our responsibility is to express a conclusion on the interim financial statements based on our review. NZ SRE 2410
(Revised) requires us to conclude whether anything has come to our attention that causes us to believe that the interim
financial statements, taken as a whole, are not prepared, in all material respects, in accordance with NZ IAS 34 Interim
Financial Reporting and IAS 34 Interim Financial Reporting.
A review of the interim financial statements in accordance with NZ SRE 2410 (Revised) is a limited assurance
engagement. We perform procedures, primarily consisting of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. The procedures performed in a
review are substantially less than those performed in an audit conducted in accordance with International Standards on
Auditing (New Zealand) and consequently do not enable us to obtain assurance that we might identify in an audit.
Accordingly we do not express an audit opinion on the interim financial statements.
Restriction on use
This report is made solely to the company’s shareholders, as a body. Our review has been undertaken so that we might
state to the company’s shareholders those matters we are required to state to them in a review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company’s shareholders as a body, for our engagement, for this report, or for the conclusions we have formed.
3
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
CONSOLIDATED INCOME STATEMENT
For the Six Months Ended 30 September 2021
Unaudited
6 Months Ended
30 Sep 2021
$’000
Unaudited
6 Months Ended
30 Sep 2020
$’000Note
Revenue455,51348,821
Cost of sales(28,808)(28,489)
Gross profit 26,70520,332
Other income5123230
Selling and distribution expenses(14,237)(12,387)
General and administrative expenses(4,269)(3,895)
Research and development expenses(2,831)(1,858)
Operating profit 5,4912,422
Finance income44
Interest costs(1,240)(1,796)
Other finance income177599
Profit before tax 4,4321,229
Tax expense(189)(37)
Profit after tax attributable to owners of the parent 4,2431,192
Earnings per share
Basic and diluted ($) $0.04$0.01
The accompanying Notes form an integral part of the condensed consolidated interim financial statements.
4
Unaudited
6 Months Ended
30 Sep 2021
$’000
Unaudited
6 Months Ended
30 Sep 2020
$’000
Profit after tax 4,2431,192
Other comprehensive income
Items that may be subsequently reclassified to profit and loss:
Foreign exchange difference on translation of foreign
operations(34)(63)
Other comprehensive loss for the year, net of tax (34)(63)
Total comprehensive income 4,2091,129
The accompanying Notes form an integral part of the condensed consolidated interim financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Six Months Ended 30 September 2021
5
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
Share
capital
$’000
Redeemable
preference
shares
reserve
$’000
Share
options
reserve
$’000
Foreign
currency
translation
reserve
$’000
Retained
earnings
$’000
Total
equity
$’000Note
Balance 31 March 2020 63,7461,669763352(49,275)17,255
Unaudited
Six months to 30 September
2020
Profit after tax - - - -1,1921,192
Other comprehensive income - - -(63) -(63)
Total comprehensive income - - -(63)1,1921,129
Conversion of preference
shares71,669(1,669) - - - -
Issue of share capital712,375 - - - -12,375
Capital raising expenses(723) - - - -(723)
Movement in share options
reserve - -(549) -58637
Preference dividends paid or
accumulated - - - -(187)(187)
Balance 30 September 2020 77,067 -214289(47,684)29,886
Audited
Year ended 31 March 2021
Profit after tax - - - -7,7 8 27,7 8 2
Other comprehensive income - - -29 -29
Total comprehensive income - - -297,7 8 27,811
Conversion of preference
shares71,669(1,669) - - - -
Issue of share capital712,389 - - - -12,389
Capital raising expenses(723) - - - -(723)
Movement in share options
reserve116 -(489) -41744
Preference dividends paid or
accumulated - - - -(188)(188)
Balance 31 March 2021 77,197 -274381(41,264)36,588
Unaudited
Six months to 30 September
2021
Profit after tax - - - -4,2434,243
Other comprehensive income
- - -(34) -(34)
Total comprehensive income - - -(34)4,2434,209
Issue of share capital7294 - - - -294
Capital raising expenses(2) - - - -(2)
Movement in share options
reserve - -7 - -7
Preference dividends paid - - - - - -
Balance 30 September 2021 77,489 -281347(37,021)41,096
The accompanying Notes form an integral part of the condensed consolidated interim financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Six Months Ended 30 September 2021
6
Unaudited as at
30 Sep 2021
$’000
Audited as at
31 Mar 2021
$’000
Unaudited as at
30 Sep 2020
$’000
Note
ASSETS
Current assets
Inventories34,12933,65435,995
Trade and other receivables25,70531,03916,576
Cash and cash equivalents5,9073,2095,870
Derivative assets11446 -108
Total current assets66,18767,90258,549
Non-current assets
Property, plant and equipment
463305295
Intangible assets
35,23532,72030,704
Right of use assets
3,1733,4813,722
Deferred income tax assets
650724713
Total non-current assets39,52137,23035,434
Total assets 105,708105,13293,983
LIABILITIES
Current liabilities
Trade and other payables16,43121,32918,877
Provisions5,9724,461836
Lease liabilities578614595
Current income tax liability101 - -
Derivative liabilities41537193
Interest bearing liabilities 2,2995,1615,447
Total current liabilities25,42232,10225,948
Non-current liabilities
Lease liabilities2,9903,2423,449
Interest bearing liabilities 36,20033,20034,700
Total non-current liabilities39,19036,44238,149
Total liabilities 64,61268,54464,097
EQUITY
Share capital77,48977,19777,067
Retained earnings/(losses)(37,021)(41,264)(47,684)
Share options reserve281274214
Redeemable preference shares reserve - - -
Foreign currency translation reserve347381289
Total equity41,09636,58829,886
Total liabilities and equity105,708105,13293,983
The accompanying Notes form an integral part of the condensed consolidated interim financial statements.
CONSOLIDATED BALANCE SHEET
As at 30 September 2021
For and on behalf of the Board who authorised these financial statements for issue on 18 November 2021
Hartley Atkinson
Managing Director and Chief Executive Officer
David Flacks
Chairman
7
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
Unaudited
6 Months Ended
30 Sep 2021
$’000
Unaudited
6 Months Ended
30 Sep 2020
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers66,76458,091
Payments to suppliers and employees(59,741)(60,689)
Interest received44
Tax paid(201)(146)
Net cash generated from/(used in) operating activities 6,826(2,740)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment(220)(27)
Purchase of intangible assets(2,550)(3,862)
Net cash used in investing activities (2,770)(3,889)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital26212,375
Bank Overdraft(1,339)1,697
Capital raising cost paid -(723)
Dividends paid -(187)
Payment for lease liabilities(321)(204)
New borrowings6,000 -
Borrowings repaid(4,500)(4,750)
Interest paid on lease liabilities(140)(145)
Interest costs paid on borrowings(1,288)(1,359)
Net cash generated from financing activities (1,326)6,704
Net increase in cash2,73075
Impact of foreign exchange on cash and cash equivalents(32)(324)
Opening cash and cash equivalents3,2096,119
Closing cash and cash equivalents 5,9075,870
The accompanying Notes form an integral part of the condensed consolidated interim financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended 30 September 2021
8
RECONCILIATION OF PROFIT AFTER TAX WITH NET CASH FLOW
FROM OPERATING ACTIVITIES
For the Six Months Ended 30 September 2021
Unaudited
6 Months Ended
30 Sep 2021
$’000
Unaudited
6 Months Ended
30 Sep 2020
$’000
Profit after tax4,2431,192
Non-cash items and items classified as financing activities
Depreciation6248
Depreciation ROU assets341375
Amortisation152141
Impact of foreign exchange on cash and cash equivalents(32)(318)
Share options expense737
Interest on lease liabilities140154
Interest and finance expense1,2881,347
Unrealised (gain) on foreign currency movements(45) -
Provision for tax14037
Movement in working capital
(Increase) in inventories(475)(13,261)
Increase in trade and other receivables and derivative assets4,8889,799
(Decrease) in trade and other payables, provisions and
derivative liabilities(3,883)(2,586)
Net cash generated from/(used in) operating activities 6,826(3,035)
The accompanying Notes form an integral part of the condensed consolidated interim financial statements.
9
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
1. REPORTING ENTITY
AFT Pharmaceuticals Ltd (the Company or Parent) together with its subsidiaries (the Group) is a
pharmaceutical distributor and developer of pharmaceutical intellectual property. The Company is a company
limited by shares incorporated and domiciled in New Zealand, it is registered under the Companies Act 1993.
The address of the Company’s registered office is 129 Hurstmere Road, Takapuna, Auckland, New Zealand.
The Company is an FMC reporting entity under the Financial Markets Conduct Act 2013 and is listed on both
the NZX and ASX.
These condensed consolidated interim financial statements were approved by the Directors on 18 November
2021 and are not audited but have been reviewed by Deloitte Limited in accordance with the New Zealand
Standard on Review Engagements 2410.
2. BASIS OF PREPARATION AND PRINCIPLES OF CONSOLIDATION
Statement of compliance
These general-purpose financial statements for the six months to 30 September 2021 have been prepared in
accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with NZ IAS
34 and IAS 34, Interim Financial Reporting. The Group is a for-profit entity for the purposes of complying with
NZ GAAP.
These condensed consolidated interim financial statements do not include all the notes normally included in
an annual financial report. Accordingly, this report should be read in conjunction with the audited financial
statements for the year ended 31 March 2021, which have been prepared in accordance with the New Zealand
equivalents to International Financial Reporting Standards (NZ IFRS) and International Financial Reporting
Standards (IFRS).
The same accounting policies and methods of computation are followed in the condensed consolidated
interim financial statements as compared to the audited financial statements for the year ended 31 March
2021, as described in those annual financial statements.
Basis of accounting
These consolidated financial statements have been prepared under the historical cost convention, as modified
by the revaluation of financial assets and liabilities (including derivative instruments) at fair value through
profit or loss and/or other comprehensive income.
Functional and presentation currency
The consolidated financial statements are presented in New Zealand dollars (NZD), which is the Company’s
functional currency rounded to the nearest thousand dollars unless otherwise stated. Items included in the
financial statements of each of the subsidiaries are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).
Foreign currency transactions and balances
The results and balance sheets of all foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from New Zealand dollars are translated into the
presentation currency as follows:
• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet
• Income and expenses for each income statement and statement of comprehensive income are translated
at average exchange rates, unless this is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and expenses are translated at the dates
of the transactions, and
• Exchange differences arising are recognised in other comprehensive income and accumulated in equity.
Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Group as
at the balance date and the results of all subsidiaries for the six-month period then ended.
Intercompany transactions, balances and unrealised gains on transactions between subsidiary companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment
of the asset transferred.
NOTES TO THE FINANCIAL STATEMENTS
For the Six Months Ended 30 September 2021
10
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
Critical accounting estimates and judgements
In applying the Group’s accounting policies, the directors are required to make judgements (other than those
involving estimations) that have a significant impact on the amounts recognised and to make estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors that
are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of the revision and future periods if the revision affects both current and future periods.
Significant estimates are disclosed in each of the applicable notes to the financial statements and are
designated with an
symbol.
Significant accounting policies
Accounting policies are disclosed in each of the applicable notes to the financial statements and are
designated with an
symbol.
All mandatory amendments have been adopted in the current year. None had a material impact on these
financial statements.
The accounting policies applied by the Group in the preparation of the condensed consolidated interim
financial statements are the same as those applied by the Group in the preparation of its consolidated
financial report for the year ended 31 March 2021. The accounting policies have been applied consistently
throughout the Group for the purposes of this interim report.
Goods and Services Tax (GST)
The income statement and the statement of comprehensive income have been prepared so that all
components are stated exclusive of New Zealand, Australian and Malaysian GST. All items in the balance sheet
are stated net of GST, with the exception of accounts receivable and payable, which include GST invoiced. All
components of the statement of cash flows are stated exclusive of GST.
3. SIGNIFICANT TRANSACTIONS AND EVENTS IN THE CURRENT PERIOD
On 28 April 2021, the Group announced that it had licensed Maxigesic IV in the US. The agreement with Hikma
Pharmaceuticals, the US’ third largest supplier of generic injectable medications by volume, will see AFT
benefit from upfront, regulatory and commercial milestone payments worth up to US$18.8 million and a profit
share from in-market product sales.
No other significant transactions and events occurred during the current period.
4.
REVENUE FROM OPERATIONS
Unaudited
6 Months Ended
30 Sep 2021
$’000
Unaudited
6 Months Ended
30 Sep 2020
$’000
Sale of goods50,48148,428
Royalty income22596
Licensing Income4,807297
Total revenue from operations55,51348,821
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the Six Months Ended 30 September 2021
New accounting standards and amendments effective during the year
All mandatory amendments have been adopted in the current year. None had a material impact on these
financial statements.
New and revised standards in issue but not yet effective
There are a number of standards, amendments and interpretations that have been approved but are not yet
effective. The Group expects to adopt these when they become mandatory. None are expected to result in a
material impact on the Group’s financial statements.
11
5. SEGMENT REPORTING
Operating Segments
Australia
$’000
New Zealand
$’000
Asia
$’000
Rest of World
$’000
Total
$’000Unaudited
30 September 2021
Revenue - sale of goods29,20115,8152,9052,56050,481
Revenue - royalties - - -225225
Revenue - licensing - - -4,8074,807
Total revenue29,20115,8152,9057, 5 9 255,513
Other income -130 -(7)123
Depreciation - ROU assets196145 - -341
Depreciation - other1547 - -62
Amortisation -152 - -152
Operating profit3,620(1,807)4163,2625,491
Finance income -4 - -4
Interest costs - loans -(1,100) - -(1,100)
Interest costs - lease liabilities(41)(99) - -(140)
Other finance gains/(losses)238(76)15 -177
Profit/(loss) before tax3,817(3,078)4313,2624,432
Taxation(100)(89) - -(189)
Profit/(loss) after tax3,717(3,167)4313,2624,243
Total assets43,87449,3201812,496105,708
ROU assets8022,371 - -3,173
Property plant and
equipment344272 -463
Pascomer IP - - -12,50012,500
Other intangible assets - - -22,73522,735
Total liabilities4,66758,1361,809 -64,612
Capital expenditure*5215 - -220
Revenue comprises the fair value for:
• The sale of goods, excluding GST and discounts, which are recognised when control of the product
is transferred to the customer
• Royalties owing on the licensees’ sale of product, which are recognised when the licensee has sold
the product
• Licensing income, which is recognised when the Group has completed substantially all of its
obligations under the licensing agreement and through until the expected finalisation of the event.
The Group’s obligations are the provision of territorial rights to the company’s intellectual property
and the provision and support of the documentation required to enable registration of the product in
the territory.
12
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
Operating Segments
Australia
$’000
New Zealand
$’000
Asia
$’000
Rest of World
$’000
Total
$’000Unaudited
30 September 2020
Revenue - sale of goods28,55213,7092,1983,96948,428
Revenue - royalties - - -9696
Revenue - licensing - - -297297
Total revenue28,55213,7092,1984,36248,821
Other income - -46184230
Depreciation - ROU assets2241501 -375
Depreciation - other1137 - -48
Amortisation -141 - -141
Operating profit3,195(1,425)721(69)2,422
Finance income -4 - -4
Interest costs - loans(1,642) - -(1,642)
Interest costs - lease liabilities(51)(103) - -(154)
Other finance gains/(losses)456246(103) -599
Profit/(loss) before tax3,600(2,920)618(69)1,229
Taxation(37) - - -(37)
Profit/(loss) after tax3,563(2,920)618(69)1,192
Total assets30,96150,4824012,50093,983
ROU assets1,1262,596 - -3,722
Property plant and
equipment362563 -295
Pascomer IP - - -12,50012,500
Other intangible assets - - -18,20418,204
Total liabilities5,01559,06715 -64,097
Capital expenditure *423 - -27
* Capital expenditure does not include intangible assets additions of $2,550k during the six-month period to
30 September 2021 (additions during the period to 30 September 2020 were $3,862k)
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker (CODM). For the purposes of NZ IFRS 8, the CODM is a group comprising the Board
of Directors, together with the Chief Executive Officer, the Chief of Staff, the Chief Financial Officer and the
Director of International Business Development. This has been determined on the basis that it is this group
that determines the allocation of the resources to segments and assesses their performance.
The Group has four operating segments based on geographical locations reportable under NZ IFRS 8,
as described below, which are the Group’s strategic groupings of business units. The following summary
describes the operations in each of the Group’s reporting segments:
• New Zealand – Includes the head office function for the Group, supplier relationships and procurement
of all stock for the Group, all regulatory activity, governance, all marketing activity and all finance activity.
The sales and distribution activity principally relate to the New Zealand market.
• Australia – Includes the sales and distribution activity relating to the Australian market.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the Six Months Ended 30 September 2021
13
• Asia – Includes the sales and distribution activity relating to the Southeast Asian market (Brunei, China,
Hong Kong, Malaysia, Philippines, Singapore and Vietnam).
• Rest of World – Includes the out-licensing of IP developments to markets in which the Group does not
have a presence and the export of products to export markets. The costs of research and development
and new market development activity not specific to the other segments are expensed to this segment.
• Major Customers – Revenues from one customer of the Australian segment (being a licensed wholesaler)
represents approximately NZ$13.0m (6 Months to 30 September 2020: NZ$11.8m) and from one customer
of the New Zealand segment (also being a licensed wholesaler) represents approximately NZ$8.1m (6
months to 30 September 2020: NZ$7.3m) of the Group’s total revenues.
6.
INTEREST BEARING LIABILITIES
Unaudited as at
30 Sep 2021
$’000
Audited as at
31 Mar 2021
$’000
Unaudited as at
30 Sep 2020
$’000
Current lease liabilities578614595
Non-current lease liabilities2,9903,2423,449
BNZ overdraft2991,6611,697
BNZ Term loans current portion2,0003,5003,750
BNZ Term loans non-current portion36,20033,20034,700
Total42,06742,21744,191
Opening balance of BNZ loan36,70043,200 -
BNZ loans drawn down1,000 -38,450
BNZ business finance scheme loan drawn down5,000 - -
Repayment of principal(4,500)(6,500) -
Closing balance of BNZ loan38,20036,70038,450
The BNZ loans have a general security over the assets of the Group together with a Group guarantee. The
facility includes a progressive part reduction in principal over a three-year term.
During May 2021, the Group signed an amended agreement with BNZ. A new $5 million Business Finance
Scheme (BFS) Loan was entered into and one of the working capital loans has been reduced by $5 million.
The new loan is a five-year interest only loan at a fixed rate of 2.30%. The existing BNZ facilities maturity
date has been extended to 27 April 2023.
All covenants relating to the BNZ facility have been complied with for the six months ending 30 September
2021.
Finance income comprises interest income that is recognised on a time-proportion basis using the
effective interest method.
Other income comprises research and development and international growth grants and other income.
Research and development grant
Research and development grant income is recognised when eligible research and development
expenses are incurred and conditions relating to the grant are satisfied.
International growth grant
International growth grant income is recognised when eligible international growth expenses are
incurred and conditions relating to the grant are satisfied.
14
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
7. SHARE CAPITAL
Ordinary shares and redeemable preference shares are classified as equity.
Ordinary shares
The 105,000 exercised staff share options detailed below were the only shares issued during the current
period.
During the six-month period ending 30 September 2020 the Group issued 2,666,667 ordinary shares at a
price of $3.75 per share and raised $10m. This was followed with a fully subscribed Share Purchase Plan
(SPP) where 533,333 ordinary shares were issued at a price of $3.75 per share raising a further $2m. The
funds raised were applied to reducing working capital facilities and to fund future anticipated growth.
Redeemable preference shares
No redeemable preference shares remain in issue.
During the six-month period ending 30 September 2020, all 3,300,000 redeemable preference shares
issued on 24 March 2017 were converted by the holders into 3,300,000 ordinary shares with an additional
605,856 ordinary shares being issued in respect of accumulated dividends on the redeemable preference
shares.
Staff share options
Staff share options are exercisable at the price of $2.80 each, being the issue price of a share at the time
of the company’s initial listing on NZX and ASX. The vesting period is generally up to four years from date
of issue, however this varies according to various performance criteria. Other than in limited circumstances
options are forfeited if an employee leaves the Group before the options vest. The options are valued at
the grant date at fair value as calculated independently using the Black Scholes model. During the period
105,000 staff share options were exercised, raising $294k (In the six month period to 30 September 2020,
134,000 staff share options were exercised, raising $375k).
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the Six Months Ended 30 September 2021
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and
other short-term investments with original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
15
8. DIVIDENDS PER SHARE
No dividends have been declared to the ordinary shareholders during the current or prior year.
During the previous six-month period to 30 September 2020, all holders of redeemable preference shares
converted their preference shares into ordinary shares. Dividends up to the date of conversion were $187,574
(including withholding tax) and were paid.
9.
CONTINGENT LIABILITIES
In December 2019, the Company renewed its guarantee of AFT Pharmaceuticals (AU) Pty Limited for its five-
year lease extension contract with Investec Limited for the premises occupied in Sydney, Australia. A deposit
of AUD$84,000 is held with NAB bank as security for this lease.
The Group has provided a guarantee to Robt Jones Investment Holdings Ltd of $100,000 as security over the
leased office premises at 129 Hurstmere Road, Takapuna. Auckland.
The Group placed NZD$75,000 on term deposit with BNZ bank as security for a guarantee issued by BNZ in
favour of the NZX.
The Company has received notice of a potential claim from a former contractor in South East Asia. The
Group’s lawyers have advised that they do not consider that the claim has merit, and they have recommended
that it be contested. No provision has been made in these financial statements as the Group’s management
does not consider that there is any probable loss.
The Company has a share option plan for employees of the Group. In accordance with the terms of the
plan, as approved by the directors, employees at the time of the Company’s initial NZX and ASX listing in
December 2015 and again in June 2018, were granted share purchase options.
• Each employee share option converts into one ordinary share of the Company on exercise.
• No amounts are paid or payable by the recipient on receipt of the option.
• The options carry neither rights to dividends nor voting rights.
• Options may be exercised at any time from the date of vesting to the date of their expiry.
• The number of options granted is calculated in accordance with the performance-based formula
approved by the directors at previous Board meetings.
The formula rewards employees to the extent of the Group’s and the individual’s achievement judged
against both qualitative and quantitative criteria including the following financial and operational
measures:
• Market share
• Net profit
• Target sales thresholds; and
• Product registration and licensing targets.
Staff share options are valued at fair value at the grant date as calculated using the Black Scholes
model.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on
a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that
eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group
revises its estimate of the number of equity instruments expected to vest. The impact of the revision of
the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
16
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
10. COMMITMENTS
(a) Capital Commitments
The Group has no capital commitments at 30 September 2021 (31 March 2021: nil, 30 September 2020:
nil).
(c) Other Commitments
The Group has previously entered into contracts to complete clinical trials overseas. The contracts required
payments to be made progressively when those stages or milestones are achieved. All amounts due under
the contracts were paid during the prior year.
11.
FINANCIAL RISK MANAGEMENT
(a) Managing financial risk
The Group’s activities expose it to various financial risks as detailed below.
• Market risk
Management is of the opinion that the Group’s exposure to market risk at balance date is defined as:
Risk factor
description
DescriptionSensitivity
Currency riskExposure to changes in foreign exchange rates
on assets and liabilities of subsidiaries, and USD
denominated borrowings
As below
Interest rate riskExposure to changes in interest rates on borrowingsAs below
Other price riskNo commodity securities are bought, sold or tradedNil
• Foreign exchange risk
The Group benefits from the use of derivative financial instruments to manage foreign currency exposures.
The fair value of forward exchange contracts is calculated by reference to current forward exchange rates
at year end and the contract exchange rates, considered level 2 of the fair value hierarchy.
The Group purchases goods and services from overseas suppliers in a number of currencies, primarily
AUD, USD, EUR and GBP, which exposes the Group to foreign currency risk. The Group manages foreign
currency risk through use of derivative arrangements, in particular, forward exchange contracts. The
exposure is monitored on a regular basis based on Group foreign exchange policies. Future revenues from
markets outside Australasia will be denominated primarily in USD and EUR, which will provide a natural
hedge against these costs.
In the current period for the six months to 30 September 2021, net foreign exchange gains totalled $365k
(2020: $445k). The balance of gains/losses are derived from the restatement of monetary balances at the
spot rate on the period-end balance date of 30 September 2021.
In total, the Group had financial assets and liabilities denominated in the following currencies:
30 Sep 202131 Mar 202130 Sep 2020
Currency
Assets
NZD$’000
Liabilities
NZD$’000
Assets
NZD$’000
Liabilities
NZD$’000
Assets
NZD$’000
Liabilities
NZD$’000
AUD12,264 2,13818,56854,10111,8223,719
USD5,530 1,3411,4363,17643516
MYR394 7336322950
SGD663 3593181,3361,002
EUR777 3,6882,5523,4842,2421,820
GBP2 44981-
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the Six Months Ended 30 September 2021
17
The following forward foreign exchange contracts were held at 30 September 2021
Forward Foreign Exchange Contracts
Buy currency
Buy currency
amount ‘000
Sell amount
NZD$’000
Mark to market
NZD$’000
Fair value
NZD$’000
EUR4,5757,7977,75 6(41)
GBP4298348406
USD4,2005,9346,117183
Sell currency
Sell currency
amount $’000
Buy amount
NZD$’000
Sell amount
NZD$’000
Fair value
NZD$’000
AUD7,9608,6048,347257
Total asset as at 30 September 2021 405
The following forward foreign exchange contracts were held at 31 March 2021
Forward Foreign Exchange Contracts
Buy currency
Buy currency
amount ‘000
Sell amount
NZD$’000
Mark to market
NZD$’000
Fair value
NZD$’000
EUR4,4307,6947,466(227)
GBP35969470713
USD4,9007, 2417,0 2 5(216)
Sell currencySell currency Buy amountSell amountFair value
amount $’000NZD$’000NZD$’000NZD$’000
AUD12,45013,46913,576(107)
Total liability as at 31 March 2021 (537)
The following forward foreign exchange contracts were held at 30 September 2020
Forward Foreign Exchange Contracts
Buy currency
Buy currency
amount ‘000
Sell amount
NZD$’000
Mark to market
NZD$’000
Fair value
NZD$’000
EUR3,7856,6616,767106
GBP306597591(6)
USD5,4658,2988,111(187)
Sell currencySell currency Buy amountSell amountFair value
amount $’000NZD$’000NZD$’000NZD$’000
AUD9,90710,70610,7042
Total liability as at September 2020 (85)
• Interest rate risk
Borrowings are at a mixture of floating base rates plus a margin determined by the Group’s
performance against covenant adherence levels, which exposes the Group to cash flow interest rate
risk. There are no specific derivative arrangements to manage this risk.
• Credit risk
Financial instruments, which potentially subject the Group to credit risk, principally consist of
accounts receivable. Regular monitoring is undertaken to ensure that the credit exposure remains
within the Group’s normal terms of trade.
18
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
The Group has one significant concentration of credit risk at 30 September 2021, with the largest
debtor being AU$4.4m (31 March 2021: AU$11.5m). There has been no past experience of default and
no indications of default in relation to this debtor.
The Group’s cash and short-term deposits are placed with high credit quality financial institutions.
Accordingly, the Group has no significant concentration of credit risk other than bank deposits, with
0.3% of total assets at the Bank of New Zealand (2020: overdraft position), and 5.3% at NAB Bank
(2020: 6.2%). The carrying value of financial assets represents the maximum exposure to credit risk.
• Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulty in raising funds at short notice to
meet its commitments and arises from the need to borrow funds for working capital. The directors
monitor the risk on a regular basis and actively manage the cash available to ensure the net exposure
to liquidity risk is minimised.
The liquidity/maturity profile of the liabilities is as follows:
< 1 year
$’000
1-2 years
$’000
2-5 years
$’000
> 5 years
$’000
TOTAL
$’00030 September 2021
Trade and other payables(16,431) - - -(16,431)
Borrowings(4,498)(32,290)(5,288) -(42,076)
Lease liabilities(814)(653)(1,335)(1,969)(4,771)
Derivative instruments (outbound)(23,169) - - -(23,169)
Derivative instruments (inbound)23,574 - - -23,574
Total(21,338)(32,943)(6,623)(1,969)(62,873)
31 March 2021$’000$’000$’000$’000$’000
Trade and other payables(21,329) - - -(21,329)
Borrowings(7,773)(33,841) - -(41,614)
Lease liabilities(886)(747)(1,488)(2,143)(5,264)
Derivative instruments (outbound)(29,098) - - -(29,098)
Derivative instruments (inbound)28,561 - - -28,561
Total(30,525)(34,588)(1,488)(2,143)(68,744)
(b) Fair Values
The carrying values of these financial instruments approximate their fair values because of their short terms
to maturity or interest reset dates. Trade receivables are valued net of provision and trade payables are
valued at their original amounts by contract.
12.
MANAGEMENT OF CAPITAL
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern so that it can continue to provide returns to its shareholders and to maintain a strong capital base
to support the development of its business. The Group meets these objectives through a mix of equity
capital and borrowings. The level and mix of capital are determined by the Group’s internal Corporate
Governance policies.
Under the BNZ facility, there is a covenant requirement that the facility, comprising an overdraft and letter
of credit facility, must not exceed the total of 70% of acceptable debtors plus 50% of acceptable stock.
Additional covenants include a requirement for a minimum principal and interest cover ratio, a minimum
net leverage ratio and a maximum capital expenditure (capex) and research and development (R&D) ratio.
Covenant reporting is required on a quarterly basis. The Group was compliant with all BNZ covenants
during the year.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the Six Months Ended 30 September 2021
19
13. SIGNIFICANT EVENTS AFTER BALANCE SHEET DATE
There were no significant events after balance sheet date
14.
RELATED PARTIES
The Group had related party relationships with the following entities:
Related partyNature of relationship
CRG (Capital Royalty
Group)
AFT Non-executive Director Nate Hukill is President and Chairman of
CRG, the Group that provided the loan that was repaid by the Group on 31
March 2020.
CRG ceased to be a shareholder of AFT on 15 June 2020.
Nate Hukill resigned as a director of AFT on 23 June 2020.
Atkinson Family Trust
AFT Chief Executive Officer Hartley Atkinson is a Trustee/Discretionary
Beneficiary of Atkinson Family Trust.
AFT Chief of Staff Marree Atkinson is a Discretionary Beneficiary of
Atkinson Family Trust.
The following transactions were carried out with these related parties:
Unaudited
6 Months Ended
30 Sep 2021
$’000
Audited
As at
31 Mar 2021
$’000
Unaudited
6 Months Ended
30 Sep 2020
$’000
Dividends on redeemable Preference shares
CRG -108108
Atkinson Family Trust -8080
Unaudited
6 Months Ended
30 Sep 2021
$’000
Audited
As at
31 Mar 2021
$’000
Unaudited
6 Months Ended
30 Sep 2020
$’000Key management compensation
Directors’ fees 295376148
Executive salaries6761,190565
Short-term benefits389293293
Options expense71438
Key management compensation1,3671,8731,044
Key management includes external directors, the Chief Executive Officer, the Chief of Staff, the Chief
Financial Officer and the Director of International Business Development. These positions are mainly
responsible for planning, controlling and directing the activities of the business.
20
Directory
AFT is a company incorporated with limited liability under the New Zealand Companies Act 1993
(Companies Office registration number 873005).
Registered Office Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
+64 9 488 0232
www.aftpharm.com
Mertons, Level 7, 330 Collins Street, Melbourne, Victoria 3000, Australia
+61 3 8689 9997
Principal Administration Office Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
+64 9 488 0232
www.aftpharm.com
113 Wicks Road, North Ryde NSW 2113, Australia
+61 2 9420 0420
ARBN: 609 017 969
Directors Dr Hartley Atkinson
As at the date of these Marree Atkinson
financial statements. Anita Baldauf
David Flacks (Chair)
Jon Lamb
Dr Douglas (Doug) Wilson
Dr Ted Witek
Share Registrar Computershare Investor Services Limited
Level 2, 159 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
+64 9 488 8777
enquiry@computershare.co.nz
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street, Abbotsford VIC 3001, Australia
+61 3 9415 4083
enquiry@computershare.co.nz
Auditor Deloitte
Deloitte Centre, 80 Queen Street, Auckland 1140, New Zealand
+64 9 303 0700
Financial Calendar
Financial year end: 31 March 2022
Full year financial results announcement: May 2022
Annual shareholders meeting: August 2022
Financial half year end: September 2022
21
NOTES
22
AFT PHARMACEUTICALS LIMITED
Condensed Consolidated Interim Financial Statements
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.