Half Year Trading Update

RNS Number : 7500F

Alliance Pharma PLC

17 July 2019

 

For immediate release

17 July 2019

ALLIANCE PHARMA PLC

("Alliance" or the "Group")

Half Year Trading Update

Alliance Pharma plc (AIM: APH), the international healthcare group, is pleased to announce its pre-close trading update for the six months ended 30 June 2019, which shows strong revenue growth and leverage below 2.0 times.

Revenues on a 'see-through' basis* for the first half of 2019 are expected to be £70.3m, up 29% on the same period last year (H1 2018: £54.5m) and up 28% on a constant currency basis. Excluding acquisitions, revenues increased 10% on a constant currency basis on the same period last year. Based on trading in the year to date, the Board expects revenue and underlying trading profit for the full year to be in line with expectations.

We continue to see sustained growth from our product portfolio driven by our continued focus on both international growth markets and higher growth, consumer healthcare products.

During the first half, our International Star brands saw healthy revenue growth with sales of £30.9m (H1 2018: £17.3m), up 79% compared with the same period last year and up 21% on a like-for-like basis (excluding Nizoral™ and Xonvea™). This growth was underpinned by the continued growth of Kelo-cote™ with sales up 20% at £13.1m (H1 2018: £10.9m), reflecting continued demand in the Asia Pacific region. Revenues generated by our Local brands in the first half were approximately £39.4m, an increase of 6% on the same period last year (H1 2018: £37.2m).

Underlying free cash flow** in the first half of 2019 was strong at approximately £14.5m (H1 2018: £10.1m), leading to a reduction in net debt in the period of approximately £11.7m to £74.1m as at 30 June 2019. As a result of this strong cash generation, leverage (defined as adjusted net debt/proforma EBITDA) reduced to approximately 1.95 times at the end of June (31 December 2018: 2.33 times) and we expect to de-lever further in the second half of the year.

We are also pleased to announce that we have agreed a new £165m fully Revolving Credit Facility, together with a £50m accordion, with an enlarged syndicate of lenders on improved terms, replacing our existing facility which ran through to December 2020. This new facility is available until July 2023, with a one-year extension option, and provides further flexibility for the Group to deliver carefully targeted acquisitions over the next few years to complement its organic growth strategy.

The Group expects to announce its interim results for the six months ended 30 June 2019 on 24 September 2019.

Peter Butterfield, Chief Executive Officer of Alliance Pharma, commented: "We have seen continued momentum in our business during the first half of 2019, with sales up 29% compared with the previous year and growth coming largely from our consumer healthcare products, which now account for over half of our portfolio.  As we continue to deliver good organic growth and strong cashflows, the business will continue to de-lever quickly over the course of the next six months leaving us well positioned to drive future growth opportunities."

* 'See-through' revenues include the underlying sales from Nizoral™. Under the terms of the transitional services agreement with Johnson & Johnson, 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, which is expected to occur during the second half of 2019 and 2020.

** Underlying free cash flow comprises cash generated from operating activities less interest, tax and capital expenditure.

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 / Sophie Wills / Hannah Ratcliff
Numis Securities Limited	+ 44 (0)20 7260 1000
Nominated Adviser: Freddie Barnfield / Freddie Naylor-Leyland
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 license the rights to more than 90 consumer healthcare products and pharmaceuticals, which are managed on a portfolio basis according to their growth potential. Promotional investment is focused on a small number of brands with significant international or multi-territory reach. The remainder of the portfolio comprises products which are sold in a limited number of local markets and 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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