Pre-Close 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 preliminary results for the year ended 31 December 2016.
Group revenue for 2016 is expected to be more than double the prior year at £97.5m (2015: £48.3m). This has been driven by the transformational acquisition of the ex-Sinclair products in December 2015 and the continued strong performance of the original Alliance portfolio. Trading profit before tax is expected to be in line with the Board's expectations.
The ex-Sinclair products delivered sales of approximately £43.8m and represented 45% of total sales, which is in line with the Board's expectations. The remaining Alliance portfolio performed strongly and delivered a sales increase of 13% to approximately £53.7m for the year (2015: £47.5m).
Group sales were enhanced by approximately £4.2m due to the weakening of Sterling, primarily against the Euro and US Dollar. However the effect on profits was much smaller due to the increases in cost of goods and operating costs denominated in these currencies.
Our key brands delivered a strong performance in 2016. Kelo-Cote™, our scar reduction product, recorded sales of £10.1m, exceeding £10m for the first time. MacuShield™, our nutritional supplement product for age-related macular degeneration (AMD), also performed strongly with sales of £5.3m for the year compared with sales of £3.5m in the prior eleven months following its acquisition in February 2015. On an annualised basis this would equate to a growth rate of 40%. Hydromol™, our emollient range, grew 6% with sales of £7.0m in a competitive market. We were also pleased with the sales performance of our UK Consumer Health products, including Ashton & Parsons® Infants' Powders whose sales grew from £1.5m in 2015 to £1.9m.
Full year free cash flow was approximately double last year at over £12m (2015: £6.3m). Cash conversion was particularly good in the second half of the year with the generation of more than £10m of free cash flow. The first half was affected by the normalisation of working capital movements following the acquisition of the ex-Sinclair products. The integration of operations and systems from Sinclair has progressed well and the transfer of the cash-generating activities is now complete.
Net debt decreased from £79.0m at 30 June 2016 to approximately £76.1m as at 31 December 2016, despite adverse foreign exchange movements following the weakening of Sterling. Expressed at 30 June 2016 currency rates, net debt would have been £73.8m. We expect net debt to progressively reduce during 2017, driven by the Group's strong underlying cash generation.
The UK registration for Diclectin, a product undergoing approval for the treatment for nausea and vomiting of pregnancy, is progressing to plan. We expect UK registration mid-year, which will enable us to begin sales in the second half of 2017 with European territories following from late 2018.
The Group expects to announce its preliminary results for the twelve months ended 31 December 2016 on Wednesday 29 March 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:
About Alliance Pharma
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.