Half Year Trading Update
ALLIANCE PHARMA PLC
("Alliance" or the "Group")
Alliance Pharma plc (AIM: APH), the specialty pharmaceutical company, announces its pre-close trading update ahead of its interim results for the six months ended 30 June 2017.
The Group performed well in the first half with sales for the period up 8% at £50.3m (H1 2016: £46.4m). Overall the Company has traded in line with the Board’s expectations.
Our international growth brands delivered a solid performance in the first half. Kelo-Cote™, our scar reduction product, achieved a 52% increase in sales at £6.2m (2016: £4.1m). MacuShield™, for age-related macular degeneration (AMD), also performed strongly, with sales up 67% at £3.4m (2016: £2.0m). Overall, our other brands performed in line with expectations.
As previously indicated, we continue to expect a decision in the current quarter on the UK regulatory approval of Diclectin, a potentially major product for the treatment of nausea and vomiting of pregnancy.
Currency movements benefited sales in the period by approximately £2.6m due to the weakening of Sterling when compared against the rates for the same period last year primarily of the Euro and US Dollar. However, the impact on operating profits will be much smaller due to the increases in cost of goods and operating costs denominated in these currencies.
Underlying free cash flow in the first half is expected to be approximately £11.1m (2016: £2.1m), in-line with the free cash flow generated in the second half of 2016, and represents a significant improvement on the same period last year where free cash flow in H1 2016 was suppressed by the build-up in working capital following the acquisition of the Sinclair Pharma plc (“Sinclair”) products.
Net debt decreased to approximately £63.4m as at 30 June 2017 (31 December 2016: £76.1m), driven primarily by the Group’s strong underlying cash generation and the £4m receipt from Sinclair following the settlement announced in March 2017.
Similarly, leverage (defined as adjusted net debt/EBITDA) reduced to 2.4 times at 30 June 2017 (31 December 2016: 2.8 times). We expect leverage to continue to reduce to around 2.0 times by the end of the year.
The Group expects to announce its interim results for the six months ended 30 June 2017 on 13 September 2017.
For further information:
Alliance Pharma plc + 44 (0)1249 466966
Peter Butterfield, Chief Executive Officer
Andrew Franklin, Chief Financial Officer
Buchanan + 44 (0)20 7466 5000
Mark Court / Sophie Wills / Hannah Ratcliff
Numis Securities Limited + 44 (0)20 7260 1000
Nominated Adviser: Michael Meade / Freddie Barnfield
Corporate Broking: James Black
Investec Bank plc + 44 (0)20 7597 5970
Corporate Finance: Daniel Adams / Ed Thomas
Corporate Broking: Patrick Robb / Tejas Padalkar
Notes to editors:
Alliance, founded in 1998, is an international speciality pharmaceutical company based in Chippenham, Wiltshire, UK. The Company has sales in more than 100 countries worldwide via direct sales, joint ventures and a network of distributors. Alliance has a strong track record of acquiring the rights to established niche products and it currently owns or licenses the rights to approximately 90 pharmaceutical and consumer healthcare products. The Company continues to explore opportunities to expand its product portfolio.
Alliance joined the AIM market of the London Stock Exchange in December 2003 and trades under the symbol APH.