Full Year Trading Update
Strong performance from Consumer Healthcare brands with very strong cash generation
Recent acquisition of Amberen™ set to enhance growth as Alliance’s second largest brand
Alliance Pharma plc (AIM: APH), the international healthcare group, announces its unaudited trading update for the year ended 31 December 2020, ahead of the announcement of the Group’s audited results on 23 March 2021.
As expected, Group see-through revenues1 for 2020 were down 5% on the prior year at £137.5m (2019: £144.3m) both on a reported basis and on a constant currency basis, reflecting the impact of the COVID-19 pandemic. Underlying profit before tax for 2020 is expected to be marginally ahead of market expectations.
Notwithstanding the challenges of the pandemic, our Consumer Healthcare brands continued to perform strongly, with total Consumer Healthcare revenues up 1% to £93.0m (2019: £92.4m). Kelo-cote™ revenues were up 12% to £34.7m (2019: £31.0m) and Nizoral™ revenues up 4% to £21.0m (2019: £20.2m). Revenues from our Prescription Medicines were £44.5m, down 14% on the prior year (2019: £51.9m), reflecting the negative impact of COVID-19 on the delivery of routine treatments for a large part of the year.
Free cash flow for the year remained very strong at £34.1m (2019: £29.1m), with second half cash flows being significantly stronger than first half, bolstered by favourable movements in net working capital. Following the drawdown of US$110 million from our existing £165 million Revolving Credit Facility to fund the acquisition of Biogix Inc, announced on 29 December 2020, net debt was £109.4m at 31 December 2020 (31 December 2019: £59.2m). As a result of this acquisition, Group leverage2 increased to 2.43 times at 31 December 2020 (31 December 2019: 1.48 times) and is expected to decrease progressively throughout this year, to below 2.0 times by the end of FY 2021, reflecting the Group’s continuing strong cash generation.
The acquisition of Biogix has brought Amberen into the Group, a highly successful and fast-growing brand for the relief of menopause symptoms. The acquisition creates scale in the Group’s business in the US and is expected to be earnings enhancing in FY 2021 and significantly earnings enhancing from FY 2022.
Peter Butterfield, Chief Executive Officer of Alliance, commented:
“The Group continued to deliver a robust operational and financial performance in the second half of 2020, despite the ongoing challenges of the pandemic. Whilst top line revenue growth has been constrained overall, our Consumer Healthcare business has performed well given the market backdrop and we have seen some strong performances from a number of our brands, in particular Kelo-cote.
“Our free cash flow has remained very strong, enabling us to pay down more of our debt ahead of completing the Biogix acquisition close to the end of the year.”Peter Butterfield, Chief Executive Officer of Alliance
“We’re particularly pleased that we managed to complete such a large and strategically significant acquisition at the end of 2020, in addition to maintaining the performance of the base business as we navigated our way through the challenges of COVID-19.
“As we progress into 2021, we look forward to regaining the strong momentum and revenue growth of recent years, and to benefiting from the additional growth opportunities that Amberen brings into the Group.”
1 See-through revenue includes sales from Nizoral™ as if they had been invoiced by Alliance. Under the terms of the transitional services agreement with Johnson & Johnson (J&J), Alliance receives the benefit of the net profit on sales of Nizoral from the date of acquisition up until the product licences in each of the Asia-Pacific territories transfer from J&J to Alliance. Revenue for 2020 on a statutory reported basis is expected to be £129.8m, a reduction of 4% on the prior year.
2 Adjusted net debt / enlarged Group EBITDA, calculated using pro forma EBITDA on a trailing 12 month basis
For further information:
Alliance Pharma plc
Peter Butterfield, Chief Executive Officer
Andrew Franklin, Chief Financial Officer
+ 44 (0)1249 466966
Mark Court / Sophie Wills / Hannah Ratcliff
+ 44 (0)20 7466 5000
Numis Securities Limited
Nominated Adviser: Freddie Barnfield / Huw Jeremy
Corporate Broking: James Black
+ 44 (0)20 7260 1000
Investec Bank plc
Corporate Finance: Daniel Adams
Corporate Broking: Patrick Robb
+ 44 (0) 20 7597 5970
Alliance Pharma plc (AIM: APH) is an international healthcare group, headquartered in the UK with subsidiaries in Europe, the Far East and the US and wide international reach through an extensive network of distributors, generating sales in more than 100 countries.
We hold the marketing rights to around 80 Consumer Healthcare brands and Prescription Medicines, which are managed on a portfolio basis according to their growth potential. Promotional investment is focused primarily on our Consumer healthcare brands, many of which have significant international or multi-territory reach. Our Prescription Medicines are generally sold in a more limited number of local markets, and most require little or no promotional investment.
Our strategy allows us to deliver good organic growth and to enhance our growth rate through carefully selected acquisitions.
For more information on Alliance, please visit our website: www.alliancepharmaceuticals.com