Aspen share price: Results in line with guidance and technical breakout
In the below article we look at the half year results released by Aspen Pharmacare and analyze what may be next in store for the share price.
The Aspen Pharmacare Interim Results Update
Aspen Pharmacare Holdings Ltd results were in line with previous guidance as issued by the company. Revenue growth from the manufacturing division was the stand out for the group, soaring more than 30% year on year. Manufacturing for the group is expected to remain buoyant into the end of the year in lieu of the Johnson and Johnson vaccine tender.
Disposal of the assets related to the commercialization of Aspen's thrombosis products in Europe was concluded and reflects in the group’s Total Headline earnings per share, relative to that of earnings from continuing operations below.
A summary of the salient features from the interim results are as follows:
- Revenue from continuing operations +17%
- Normalised EBITDA from continuing operations +11%
- Normalised headline earnings per share from continuing operations +16%
- Total Headline earnings per share -18%
- Net Borrowings reduced to R27,7 billion (from R37,9 billion at December 2019 and R35,2 billion at June 2020)
- A leverage ratio of 2.83x, against the banking covenant of 3.5x, has been achieved and is in line with the Group commitment to maintain a leverage ratio no greater than 3.0x
- Operating cash flow in line with expectations, relative to abnormally high inflows in the prior financial year
The group has also said that it is looking to reintroduce a dividend after the full year 2021 preliminary results are released.
Aspen Pharmacare: technical analysis
The share price of Aspen looks to be continuing its uptrend after breaking out of a triangle shaped consolidation. The break of resistance and retest of triangle support would have provided a favourable entry signal for long trades.
15940 and 16450 provide historical upside resistance targets for the move higher. Should the share price however move to close below support at 14650, the bullish indications would be deemed to have failed.
In Summary
- Aspen results in line with guidance
- Manufacturing the outperforming division and expected to be further supported from Johnson and Johnson vaccine tender
- Disposal of the assets related to the commercialization of Aspen's thrombosis products in Europe was concluded
- Normalised headline earnings per share from continuing operations +16%
- Total Headline earnings per share -18%
- Technical analysis view shows uptrend continuation after triangle breakout
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