Dannex Ayrton Starwin PLC returned to profitability in the first half of 2026 after recording stronger revenue, improved gross margins and higher operating profit.

The pharmaceutical manufacturer reported revenue of GH¢88.38 million for the period ended June 30, 2026, representing a 6.3% increase from GH¢83.10 million recorded during the same period in 2025.

Cost of sales declined slightly to GH¢39.08 million from GH¢39.47 million, despite the increase in revenue. This helped gross profit rise by 13.0% to GH¢49.30 million, compared with GH¢43.64 million in the previous year.

The company’s gross profit margin consequently improved from approximately 52.5% to 55.8%, indicating that Dannex Ayrton Starwin generated more gross profit from each cedi of revenue during the period.

Operating Profit Jumps 61%

Selling and distribution costs fell to GH¢11.22 million from GH¢11.53 million, while administrative expenses declined to GH¢30.54 million from GH¢31.15 million.

These reductions supported a significant improvement in operating performance. Operating profit increased by 61.4% to GH¢6.14 million, up from GH¢3.81 million in the first half of 2025.

The company’s operating profit margin improved from approximately 4.6% to 7.0%.

However, the business recorded an exchange loss of GH¢1.52 million during the period, compared with an exchange gain of GH¢2.77 million in 2025. Finance costs also remained high at GH¢4.52 million, slightly above the GH¢4.37 million recorded a year earlier.

Company Returns to Profit

Despite the foreign exchange loss and financing costs, Dannex Ayrton Starwin recorded earnings before tax of GH¢1.63 million, reversing a pre-tax loss of GH¢564,352 in the corresponding period of 2025.

Profit after tax reached GH¢1.67 million, compared with a loss of GH¢270,010 a year earlier.

The return to profitability pushed the company’s net profit margin to approximately 1.9%, compared with a negative margin of 0.3% in the previous period.

Earnings per share improved to GH¢0.0197, from a loss per share of GH¢0.0032 in 2025.

Assets and Shareholders’ Equity Strengthen

Dannex Ayrton Starwin’s total assets increased by 16.4% to GH¢127.73 million, from GH¢109.70 million as of June 2025.

Property, plant and equipment rose to GH¢39.88 million from GH¢31.12 million, while inventories increased to GH¢45.96 million from GH¢42.27 million.

Trade and other receivables also increased to GH¢20.25 million, compared with GH¢18.13 million a year earlier.

Total equity grew strongly by 62.6% to GH¢43.08 million, supported by the improvement in retained earnings. Retained earnings stood at GH¢10.02 million, compared with a deficit of GH¢6.57 million reported in June 2025.

Total liabilities rose marginally by 1.7% to GH¢84.65 million.

Current assets of GH¢85.46 million remained above current liabilities of GH¢71.76 million, producing a current ratio of approximately 1.19 times, compared with 1.11 times in the previous year.

Cash Flow Remains Tight

Although profitability improved, the company’s cash-flow position remained under pressure.

Net cash generated from operating activities was only GH¢186,946, although this marked a significant improvement from the GH¢7.41 million operating cash outflow recorded in 2025.

Dannex Ayrton Starwin spent GH¢3.94 million on property, plant and equipment during the period. Net cash used in investing activities increased to GH¢3.85 million from GH¢1.75 million.

Financing activities also resulted in a net cash outflow of GH¢4.44 million, mainly due to loan repayments and lease payments.

As a result, cash and cash equivalents declined by GH¢8.10 million during the period. The company ended June 2026 with a net cash and cash-equivalent deficit of GH¢22.73 million, reflecting cash of GH¢4.30 million against a bank overdraft of GH¢27.03 million.

Outlook

Dannex Ayrton Starwin’s half-year results show a meaningful improvement in its core operations. Revenue increased, gross margins expanded, expenses were better controlled and the company moved from a loss into profit.

The sharp increase in operating profit and shareholders’ equity are positive developments. However, investors should also pay attention to the company’s high finance costs, foreign exchange exposure, bank overdraft and relatively weak operating cash generation.

The company is profitable again, but strengthening cash flow and reducing dependence on short-term borrowing will be important if the recovery is to remain sustainable.

Dannex Ayrton Starwin is engaged in the manufacture, importation and supply of pharmaceutical products. The financial statements for the period ended June 30, 2026, are unaudited.