AFT Pharmaceuticals has capped a record financial year, lifting revenue 22 percent to 254.7 million dollars and posting a 24 percent rise in net profit to 14.1 million dollars, as managing director Hartley Atkinson set the company a 300 million dollar revenue target for the year ahead.
The Auckland based drug maker, founded by Atkinson and his wife Marree in 1997 and now listed on both the New Zealand and Australian sharemarkets, released its full year results on Thursday morning. Operating profit climbed 38 percent to 24.4 million dollars, comfortably above the upper end of the company’s own guidance range of 20 to 24 million dollars. Investors rewarded the result with a 2.4 percent lift in the share price to 2.93 dollars in early trade, valuing the company at just under 300 million dollars on the Australian exchange. The board has declared a fully imputed final dividend of 2.5 cents per share, returning cash to shareholders for the third straight year.
Chair David Flack told investors the numbers reflected the strength of the company’s core Australasian business along with the benefit of pushing into new countries and product categories. Australasia is still the engine room of the company, with revenue from Australia and New Zealand combined climbing 16 percent to 210.5 million dollars. AFT said the Australian market produced broad based strength across its over the counter range and continued growth in prescription medicines, while New Zealand delivered steady gains in allergy, dermatology and eyecare lines. Asian, North American, European and South African markets contributed a smaller but growing share, lifting at a faster clip than the home market as AFT scales up partnerships and registrations.
The company has spent more than a decade building out the international rollout of its flagship pain reliever Maxigesic, a tablet combining paracetamol and ibuprofen designed to give stronger pain relief than either drug alone. Maxigesic is now sold under various brand names in more than 60 countries, and an earlier deal announced in April will see the rapid release version of the tablet stocked through Cost Plus Drugs in the United States, the discount online pharmacy backed by entrepreneur Mark Cuban. Cost Plus uses a transparent pricing model that adds a flat 15 percent margin to the wholesale cost of each medicine, and now stocks more than 2,300 products across all 50 American states. For AFT, the agreement opens a low cost route into the world’s largest pharmaceutical market without having to build its own sales force on the ground.
Looking ahead, the company is guiding to revenue above 300 million dollars in the year to March 2027 and operating profit of 28 to 32 million dollars, both meaningful step ups from the FY26 result. Reaching those numbers would push AFT past a long stated internal target and would be its tenth consecutive year of double digit revenue growth. Net debt stands at 38.6 million dollars, which the company says is within its target leverage range and leaves it room to keep funding research and registration work in new markets.
AFT spends a modest share of its revenue on research and development by global pharmaceutical standards, but its strategy of taking existing molecules and combining or reformulating them in patentable ways has allowed it to punch above its weight. Hartley Atkinson, who remains the largest shareholder alongside his wife, has consistently argued that this approach lets AFT compete profitably against far larger multinationals while avoiding the multibillion dollar bills associated with discovering brand new drugs from scratch. The Maxigesic franchise alone is now sold under more than a dozen partner labels overseas, with each licensing deal generating royalty income that flows back to the parent company in Auckland with very low marginal cost.
The result lands at a useful moment for the local sharemarket. The NZX 50 fell 1.64 percent on Wednesday with most blue chips trading in the red, and AFT is one of relatively few New Zealand listed companies to deliver record results this reporting season. It joins Turners Automotive, which on Thursday reported a record 63 million dollar profit, as evidence that some New Zealand businesses with strong export franchises are still growing despite a soft domestic economy and a wary local consumer. The two results are a reminder that picking businesses with offshore earnings rather than relying on the New Zealand consumer has been a winning formula in recent reporting periods.
AFT’s full year accounts also confirm the company is now generating enough cash from operations to fund the dividend, invest in its pipeline and pay down debt at the same time. That has not always been the case in earlier years, when ambitious overseas expansion left the balance sheet stretched. With the international rollout now contributing more meaningfully and the Australasian core still growing steadily, the company appears to be hitting an inflection point that management has been promising shareholders for several years. Whether AFT can convert today’s record numbers into the 300 million dollar revenue mark next year will depend on how quickly the Cost Plus arrangement scales in the United States and how the wider Maxigesic licensing book holds up against competition from generic combination products.
Will AFT hit its 300 million dollar revenue target next year, and which other New Zealand listed exporters are you watching this reporting season? Drop your thoughts in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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