Ascendis (JO: ASCJ ) lived up to its name for once yesterday, closing 9.2% higher after releasing a trading statement for the six months ended December 2021.
The numbers are complicated due to the sheer extent of the restructuring activities and associated fees incurred by the group. Ascendis therefore reports normalised results that adjust for these costs.
During this period, there were several entities that were sold as part of sorting out the balance sheet. This makes the numbers even trickier, as these entities were only included for a portion of the period. The sales of Remedica and Sunwave closed on 21 October, Farmalider closed on 7 July, RCA closed on 31 October and Animal Health closed on 30 November.
After those sales, the group consisted of just three South African businesses. After the end of the reporting period, Ascendis announced the settlement deal with lenders that would see even more businesses being stripped out of the group. Ascendis will be left with a consumer health business (vitamins etc.) and some cash to execute acquisitions.
I'm not going to bother writing about the headline losses and all the complicated adjustments. All that really matters here is how the consumer health division performed. That business increased its revenue by 6% and grew EBITDA by a whopping 43% to R29.5 million. This is a normalised EBITDA margin of just below 10%.
When read in conjunction with the transaction announcement in January, investors can now form a view on Ascendis' valuation and whether there is an opportunity going forward. A favourable share price result yesterday suggests that the group may finally be taking its vitamins, albeit on a much smaller scale.
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