AFT said revenue growth was offset by a margin decline of 2.6 percentage points to 43.2 per cent primarily due to Covid-19 impacts.
"Licence income (at a 100 per cent margin) was lower while we endured higher costs due to a weakening of the Australian and New Zealand dollars through the earlier months of the pandemic.
"Additionally, freight costs, in particular, rose as we made more use of air freight to build up stock levels to ensure continuity of supply. Over the longer term we expect expenses as a proportion of total revenue to continue to reduce as revenue from the Rest of the World grows."
Chairman David Flacks said the financial year had been one of the more challenging in AFT's history as business conditions tightened around the world in the wake of the pandemic
"Nevertheless, as we report another year of record revenue and a more than doubling in underlying earnings, we can look back on the year with a sense of achievement."
Founder and managing director Hartley Atkinson said the company had faced "multiple supply disruptions, delays to product launches and to regulatory approvals as well as to manufacturing audits around the world.
"Negotiations on licensing and distribution agreements have taken longer than we planned while lockdowns, travel restrictions and government-imposed limits to medicine supply have disrupted sales through our over-the-counter, hospital and prescription channels," Atkinson said.
AFT conducted a $12 million capital raise during the financial year and had anticipated using the new equity to reduce more debt.
However, the company decided to build inventory levels which has boosted total assets to $105m from $87.1m.
Net debt has fallen to $35.2m from the $37.1m at last year.
Commenting on the outlook, Atkinson said: "We are encouraged by the progress global health authorities are making in key markets with their vaccination programmes and we have seen some positive signs in US, Western Europe and China. However, we are taking nothing for granted. We continue to monitor the economic and financial effects of the pandemic and we are particularly attuned to the impact on sales, prices and supply interruptions and we will continue to take steps to mitigate these risks.
"We are still pursuing plans to assess the potential for a dividend policy but first need to reduce our net debt down to the targeted $25 million-$30 million. The achievement of this goal will turn on our earnings progress and the reduction of inventory as the pandemic effects subside.
"Nevertheless, we are confident the changes we have made in the business, our continued innovation, and our strong network of relationships around the world position AFT for continued success.
"The outlook for the 2022 financial year is subject to some uncertainty. However, we expect, and are targeting, continued growth. Our best estimate is for operating profit to range between $18 million and $23 million."
