Half Year Trading Update

RNS Number : 5483T

Alliance Pharma PLC

21 July 2020

 

For immediate release

21 July 2020

ALLIANCE PHARMA PLC

("Alliance" or the "Group")

Half Year Trading Update

Robust performance from consumer healthcare products and outlook for full year profitability

 in line with market expectations

Alliance Pharma plc (AIM: APH), the international healthcare group, is pleased to announce its trading update for the six months ended 30 June 2020, ahead of the expected announcement of the Group's interim results on 22 September 2020.

As anticipated, COVID-19 has affected first half revenue performance, principally in our prescription medicines business as sales of our consumer healthcare products have continued to be robust.

The Group's see-through revenue* for the first half of 2020 was £65.3m, 7% lower than the same period last year (H1 2019: £70.3m) and 7% lower on a constant currency basis.  Based on trading in the year to date, the Board expects revenue and underlying profit before tax for the full year to be in line with market expectations.

Our consumer healthcare focused International Star brands proved resilient in the first half, generating sales of £30.0m, only slightly down on the same period last year (H1 2019: £30.9m). Sales of Kelo-cote^TM for the six months were up £1.1m at £14.2m (H1 2019: £13.1m), whilst sales of Nizoral^TM were broadly in line at £9.8m (H1 2019: £10.0m).

In contrast, demand for our prescription driven products was lower in the first half due to the delays in routine treatments as healthcare professionals focused on maintaining hospital capacity to treat patients with COVID-19. As a result, Local brand revenues were down 11% on the corresponding period last year at £35.1m (H1 2019: £39.4m).

Free cash flow for the first half of 2020 remained robust at £10.5m (H1 2019: £14.5m), with net debt reducing by £7.0m to £52.2m as at 30 June 2020. Leverage (adjusted net debt/proforma EBITDA) reduced to 1.34 times at the end of June (31 December 2019: 1.48 times) and we expect this to reduce further in the second half of the year.

Our outsourced business model and robust IT systems have enabled us to transition the business to effective remote working and operationally the business has performed extremely well, with further positive progress being made on the Nizoral integration.  

Outlook

We have experienced only minimal disruption to our supply chain due to COVID-19 and continue to expect further recovery in trading during the second half of the year, as markets normalise and demand improves.  Overall, we are starting to see some good signs of recovery in our main markets, particularly in China.

Peter Butterfield, Chief Executive Officer of Alliance Pharma, commented: "We expected some reduction in demand during the first half of 2020 as a result of COVID-19. That said, we have come through strongly towards the end of the half and expect trading to recover further as we move into the second half of the year. The resilience and diversity of our product portfolio, and the ease with which we have managed to transition the business to operating remotely, position us very well to resume our growth trajectory as the markets for our products recover."

* 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 the Asia-Pacific territories transfer from J&J to Alliance. Revenue for H1 2020, on a statutory-reported basis, is expected to be £61.7m, a decrease of 7% on the same period last year

For further information

Alliance Pharma plc	+ 44 (0)1249 466966
Peter Butterfield, Chief Executive Officer
Andrew Franklin, Chief Financial Officer
www.alliancepharma.co.uk
Buchanan	+ 44 (0)20 7466 5000
Mark Court / Hannah Ratcliff
Numis Securities Limited	+ 44 (0)20 7260 1000
Nominated Adviser: Freddie Barnfield / Huw Jeremy
Corporate Broking: James Black

Investec Bank plc	+ 44 (0)20 7597 5970
Corporate Finance: Daniel Adams / Ed Thomas
Corporate Broking: Patrick Robb / Tejas Padalkar

About Alliance

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 currently own or in-license the rights to more than 90 consumer healthcare brands and prescription medicines, which are managed on a portfolio basis according to their growth potential. Promotional investment is focused on a small number of consumer healthcare brands, the majority of which have significant international or multi-territory reach. The remainder of our products are sold in a 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

 

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