AFT Pharmaceuticals posts record $24.4M operating profit on $255M revenue in FY26

Record Profit and Revenue Growth

AFT Pharmaceuticals (ASX:AFP, NZX:AFT) has delivered a standout FY26 result, posting a 22% surge in total revenue to NZ$254.7 million and a 39% leap in operating profit to a record NZ$24.4 million. This performance not only exceeded the company's guidance range of NZ$20 million to NZ$24 million but also sets a new benchmark in its two-decade growth trajectory. Net profit after tax climbed 24% to NZ$14.1 million, reflecting robust earnings momentum.

The revenue growth was broad-based, driven by double-digit increases across all territories, including a 19% rise in Australia, a 66% jump in international markets, and a 41% lift in Asia. Australasia remains the backbone of the business, generating NZ$210.5 million in revenue, supported by strong product sales and royalties totaling NZ$251.6 million. Licensing income also saw a meaningful increase to NZ$3.1 million as AFT progressed multiple out-licensing deals and expanded its pipeline of negotiations.

Operating expenses rose in line with growth investments, including scaling international hubs, brand and market entry initiatives, and increased R&D expenditure. Despite these costs, expenses as a proportion of sales fell to 33.8% from 35.6%, indicating improved operating leverage.

These results build on the company’s strong first half, where it reported a 33% revenue increase and a return to profitability, driven by Australian sales and recovery in Asia and international markets. The FY26 full-year figures confirm the sustained momentum across AFT’s diversified markets and product portfolio, including the flagship Maxigesic range.

The company’s balance sheet remains solid, with net debt rising to NZ$38.6 million from NZ$14.5 million in FY25, reflecting working capital expansion and acquisitions, notably in South Africa. AFT secured a new $50 million debt facility in December 2025 to support its growth initiatives. Directors declared a dividend increase to 2.5 cents per share, up from 1.8 cents in FY25, signaling confidence in the outlook.

International Expansion and Market Development

AFT continued to deepen its international footprint in FY26, advancing business hubs in the UK, Europe, North America, and South Africa. In the UK, distribution of Combogesic tablets expanded beyond major chains to include independent pharmacies, while Combogesic IV gained traction in London NHS hospitals. European launches of injectables acquired from an insolvent company in 2025 are expected to contribute meaningfully in FY27.

In North America, AFT launched Combogesic IV in Canada and is preparing a relaunch of Combogesic tablets. The US market is being targeted through Mark Cuban’s CostPlus platform for Combogesic Rapid, providing nationwide reach. Consumer products like Liposachets and Kiwisoothe are available on Amazon, with additional channels in development. South Africa integrated multiple products from Pharma Dynamics and finalized a product portfolio acquisition post-year end, positioning the hub for meaningful earnings contribution in FY27.

This international growth is a continuation of the company’s strategic focus on disciplined expansion into markets with regulatory and commercial dynamics similar to Australasia. The scaling of these hubs is expected to drive revenue and earnings growth, with the UK and South Africa flagged to contribute to FY27 earnings. This builds on earlier momentum when the company’s global footprint expanded to 85 countries, with sales in 87 countries by FY26, reflecting a broadening geographic reach and product diversification 33% revenue increase Global expansion momentum.

R&D Investment and Pipeline Advances

AFT ramped up its R&D spend to NZ$18 million in FY26, with plans to increase to NZ$25 million in FY27 to support a deep and diversified pipeline. Key projects include a late-stage injectable iron therapy targeting a market estimated at US$7.4 billion by 2033, with preparations underway for a large global Phase III trial involving 1,366 patients across multiple countries including New Zealand, China, India, Japan, Armenia, Europe, and the US.

The company secured a licensing agreement for this IV iron therapy in China with Grand Life Sciences Group, featuring upfront payments, milestones, and royalties. Other pipeline highlights include a partnership with Stablepharma UK developing room-temperature stable injectables, potentially unlocking a global market exceeding US$6 billion. Additional late-stage programs include Pascomer for facial angiofibroma and Port Wine Stain, migraine treatment formulation, antibiotic eyedrops advancing through FDA IND submission, and multiple hospital injectables with regulatory filings planned through FY27.

AFT’s R&D strategy is closely linked to its active out-licensing and in-licensing programs, which have seen nine licensing agreements closed in FY26 and numerous ongoing negotiations. The company continues to strengthen intellectual property protections with new patent filings and is advancing clinical studies, including paediatric trials for Maxigesic IV following FDA approval of study plans.

Sustainability and Governance Commitments

Alongside its commercial progress, AFT has maintained a strong focus on sustainability, corporate governance, and social responsibility, as detailed in its FY26 Annual Report. The company has aligned its ESG reporting with the UN Sustainable Development Goals and is actively managing climate-related risks, with verified greenhouse gas emissions disclosures and targets for emissions reduction, particularly in its UK operations.

AFT’s governance framework includes an experienced and diverse Board, robust risk management practices, and comprehensive policies on ethics, diversity, and compliance. The company continues to invest in workforce development, diversity and inclusion, and community engagement, underpinning its long-term value creation approach.

What to Watch Next

As AFT targets over NZ$300 million in revenue for FY27 with operating profit guidance between NZ$28 million and NZ$32 million, investors will be watching the pace of international hub scaling, the commercialisation of late-stage R&D projects, and the company’s ability to navigate geopolitical and supply chain challenges that have impacted shipping and inventory costs. The upcoming clinical trial results for injectable iron and other pipeline assets, as well as progress on licensing deals, will be critical milestones shaping the company’s growth trajectory.