Ascendis has narrowed its annual loss for continuing operations as it cut down its debt and restructured, but the healthcare group is hoping to leave the JSE and go private within the next financial year.
“There is value to unlock for shareholders in this group, but the value will not firstly be unlocked in a JSE-listed environment,” CEO Carl Neethling said on Friday in the results presentation. “The quickest and easiest path for a value unlock for shareholders that want to stay the course would be to support delisting.”
Neethling said the local bourse’s high direct and indirect costs related to being a listed company are “frustrating” to smaller cap companies such as Ascendis, which is valued at R440m on the JSE.
The company, founded in 2008 and listed in 2013, owns medical devices and supplement brands such as Solal, Junglevites and Bettaway. In 2015, Ascendis started expanding abroad by buying businesses in Spain, Cyprus, Hungary and Romania, but the expansion came back to haunt it as debt accumulated to unsustainably high levels.
Since then it has weaned itself off a debt burden of nearly R8bn, but fixing the balance sheet included a sale of its prized assets.
On Wednesday, the company announced it had started a process that could lead to delisting, with early discussions being conducted with a consortium led by ACN Capital, a private-equity outfit controlled by Neethling.
“There is no offer on the table at this stage or a guarantee that an offer will be made,” Ascendis said in a statement.
It also cautioned shareholders that the potential offer price would not be at a significant premium to the prevailing share price.
In terms of its latest results for the year to end-June, the group’s headline loss per share, a common profit measure in SA that excludes certain items, for continuing operations improved 66% to 41.5c and the loss for continuing operations improved 62.2% to R286.2m.
Revenue from continuing operations decreased 1.5% to R1.5bn and the gross profit margin by 145 basis points to 39.4%.
No dividend was declared. /With Andries Mahlangu
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