Preliminary Results
Alliance Pharma PLC
22 March 2007
For immediate release 22 March 2007
ALLIANCE PHARMA PLC
('Alliance Pharma' or 'the Company')
Preliminary Results for the year ended 31 December 2006
Alliance Pharma plc (AIM: APH), the emerging speciality pharmaceutical company,
is pleased to announce its preliminary results for the year ended 31 December
2006.
Financial Highlights
• Sales of £17.3m, an increase of 17% against the 2005 annualised figure
• Operating profit increased to £2.60m (2005: £2.17m)
• Pre-tax profit restored to £0.50m (2005: £0.66m)
• Gross profit margin at 53.5% (2005: 54.4%)
Operational Highlights
• Forceval marketing rights in China acquired in a joint venture
agreement announced today (see separate release)
• Specialist dermatology sales force established
• Acquisition of Hydromol range - sales growing at more than 35% per year
• Acquisition of three dermatology products from Pfizer
Commenting on the results, Michael Gatenby, Alliance Pharma's Chairman, said:
'Our focus going forward will be on driving the Growth portfolio and progressing
our development products but we remain receptive to any attractive acquisition
opportunities that may arise. We are particularly pleased with today's
announcement of the acquisition of Forceval rights in China.
'Trading in early 2007 has been in line with expectations and we are looking
forward to a satisfactory outcome for the year as a whole.'
For further information:
Alliance Pharma plc + 44 (0) 1249 466966
John Dawson, Chief Executive
Maddy Scott, Finance Director
www.alliancepharma.co.uk
Buchanan Communications + 44 (0) 20 7466 5000
Mark Court / Rebecca Skye Dietrich
Chairman's and Chief Executive's statement
The Company made good progress in 2006, particularly in the second half. The
trading business continued to grow in scale and profitability, and now earns
more than 30% of its turnover outside the UK.
Financial results
Sales for the 12 months to 31 December 2006 were £17.3m, an increase of 17.1%
against the 2005 annualised result. Like for like growth was 5.7%, and the
balance came from brands acquired during the year.
As anticipated in our interim report, we have restored profitability: the
pre-tax profit for the year was £0.50m (2005: £0.66m). The reduction in profit
reflected an increase in operating costs as we strengthened investment in
marketing our enlarged Growth product portfolio and in our development products.
Over the past year, in line with the recent trend, there was a significant
increase in our R&D, marketing and administrative spend. Our infrastructure
should now be broadly sufficient to support considerable growth, and the impact
on margins will diminish as our sales continue to grow. We recognise the
importance of driving the business for profit and have taken action to control
the level of infrastructure expenditure.
Debt increased by £5.80m reflecting the loan finance arranged to fund product
acquisitions. In May 2006 we had a well supported £2.39m (net) equity placing to
strengthen our cash position.
Trading business
Our trading business made an operating profit of £5.12m, up 15.8% on the
previous period annualised. We further strengthened the business during the
year, adding five new brands to our Growth portfolio and two to our Core
portfolio both generating cash for further investment.
Our Growth portfolio increased sales by 30.2% on an annualised basis, benefiting
from past marketing investment and the acquisition of new products. New
marketing investment has been concentrated on Periostat and the dermatology
products. Periostat is demonstrating excellent growth, with 74% achieved in the
period, and continues to build momentum. In 2006 we progressed Periostat's UK
marketing, shipped product under a distribution and marketing deal to Italy and
moved further towards gaining approval for launch in Turkey later this year.
This year we established a specialist dermatology sales force and the
dermatology portfolio gained critical mass after we made the following
acquisitions:
• February 2006: the Hydromol range of prescription emollients, which is
increasing sales at more than 35% a year in a market growing by 8.8% a year
• May 2006: Caraderm Ltd, whose primary product is Dermamist, a spray
for dry skin conditions with sales of £0.09m
• July 2006: UK rights to three products from Pfizer - Atarax, for itchy
skin disorders, with sales of £1.04m a year joins our Growth portfolio;
Deltacortril, for a wide range of steroid-responsive conditions, with sales of
£1.45m joins our Core portfolio; and Terra-Cortril, which we plan to relaunch.
Although off the market for 18 months Terra-Cortril remains much in demand from
burns units. A feature of the acquisition of these three products is that, in
contrast to our debt-based deals, the consideration will be paid out of future
earnings
• September 2006: UK and Ireland rights to Permitabs, used in eczema
related woundcare, which has steady sales of £0.27m a year
In October we acquired the UK intellectual property for Syntometrine, a
childbirth anti-haemorrhage product that we have marketed and distributed for
Novartis since 1998. We are transferring production to one of our contract
manufacturers and expect to realise a substantial margin improvement over the
next year.
We continue to explore export opportunities for other brands from the Growth
portfolio, which has benefited from the acquisition, announced today, of the
rights to market Forceval in China (see separate release), where the product is
endorsed by public health authorities. The acquisition of the China rights
completes Alliance's global distribution rights to Forceval. In 2006, sales of
Forceval from the UK to China were £1.9m.. Alliance has acquired the rights in
China through a joint venture company, Bellona Group Ltd, which is 60 per owned
by Alliance and 40 per cent owned by Pacific Glory Development Ltd, a Chinese
company that currently distributes Forceval in China and will continue to do so.
Development business
Both our development products made good progress in their Phase III clinical
trials, but there have been unavoidable increases in the development timescales
due to changes in regulatory requirements. Net revenue expenditure in our
development business was £1.69m as we increased expenditure in the pre-launch
marketing activity (totalling £3.63m including the clinical development
expenditure).
Posidorm, our melatonin product for sleep disorders, has successfully completed
the pilot phases of its Phase III trials in shiftworkers and elderly patients.
The results show significant improvements in sleep duration, as well as improved
night-time performance in shiftworkers, without unexpected side-effects.
As announced in our recent trading update, we had originally intended to seek UK
registration first, which would subsequently have allowed registration in other
European countries. Due to recent changes in regulatory procedures, we must now
go through the European Medicines Agency (EMEA) in a process that will take less
account of the existing medical and scientific literature on melatonin. As a
result additional safety and dose confirmation studies are required, which
delays the anticipated completion of development and adds substantial additional
costs. However, the EMEA route gives a clear pathway through the registration
process and allows an optimised pan-European product launch beginning in 2010/
11.
Posidorm has the potential to transform the Company through significant annual
revenues. We are currently considering our options for sharing some of the
final-stage investment costs with co-development and marketing partners.
Our other development project, Isprelor for induction of labour, has just
completed recruitment in its major Phase III trials. Once the results from these
studies become available, the final stage of development can be undertaken. This
mainly relates to formulation optimisation and, based on input from the relevant
regulatory agencies at our pre-submission meetings, generation of additional
pharmacokinetic data. This work, although routine, will nevertheless delay the
anticipated completion of development from mid 2007 to late 2008 and adds costs
estimated at £1m. As part of the preparation for a 2009 product launch,
outlicensing negotiations are under way.
People
In June 2006 we appointed Andrew Smith, a highly experienced healthcare
executive, as our third non-executive director. He is a former managing director
of SmithKline Beecham Pharmaceuticals UK & Ireland.
In January 2007, Mark Tomlinson joined the board as Medical Director. Dr
Tomlinson is an experienced pharmaceutical physician having held senior medical
roles in major organisations including Bristol-Myers Squibb and
Sanofi-Synthelabo. His particular expertise is in managing clinical research
projects and preparing products for market
At the forthcoming AGM Maddy Scott, Finance Director, and Sam Madden, Director:
Acquisitions Integration, will both be resigning as directors and leaving
Alliance. Maddy Scott leaves a strong and capable finance function and a search
is currently ongoing to source her replacement. Sam Madden's functional role in
terms of acquisitions' integration is now being absorbed within various
departments, where staff have grown in experience, and her role as scientific
lead on the Board has been taken over by Mark Tomlinson's appointment.
Outlook
This year we look forward to further sales growth in our trading business,
building on the past year's success and a full-year contribution from our 2006
acquisitions.
We aim to optimise profit through good cost management. Margins will benefit
from driving higher sales through our infrastructure and the transfer of
recently acquired products to our own contract manufacturing arrangements; we
are awaiting regulatory approval to transfer Atarax and Deltacortril, and will
transfer Syntometrine in late 2007.
Our focus will be on driving the Growth portfolio and progressing our
development products, but we remain receptive to any attractive acquisition
opportunities that may arise.
Trading in early 2007 has been in line with expectations. We are looking forward
to a satisfactory outcome for the year as a whole, although within the year
there are known factors, specifically the timing of brand production transfers
and the recent acquisition of Forceval for the Chinese market, which will result
in the second half being stronger than the first.
Michael Gatenby, Chairman
John Dawson, Chief Executive
21 March 2007
* To move our reporting year-end to 31 December, our previous full accounts were
for the 10 months to 31December 2005. In some cases prior year figures in this
statement have been annualised to provide more meaningful comparison.
Financial review
Presentation of results
Following our change of year-end to 31 December in 2005, the figures given in
this report have three bases rather than the normal two. Figures under the
heading '2006' or 'December 06' relate to the 12 months ended 31 December 2006.
Those under the heading '2005' or 'December 05' relate to the 10 months ended 31
December 2005. Those under '2005 annualised' are the December 05 figures
multiplied by 12/10 to give a nominal value for the full 2005 calendar year.
We segment the Group figures into three areas:
• Core brands receive no promotional investment, with stable sales
driven by prescribing habit
• Growth brands have stable sales with growth potential and we back them
with promotional investment
Together, the Core brands and Growth brands make up our profitable trading
business.
• Development brands - the products Isprelor and Posidorm - are
currently under clinical development with a view to launch in the future.
Investments in these brands, both on marketing and infrastructure, effectively
temper the results of the trading segments.
Turnover
Our 2006 turnover was £17.25m, a 40.5% increase on the £12.28m achieved in 2005.
Against the 2005 annualised result, the increase was 17.1%.
This increase was driven by our Growth brands, which achieved 2006 sales of
£8.83m compared with £5.65m in 2005. The annualised growth was 30.2%, benefiting
from a succession of acquisitions through the year. In 2006 the Growth brands
accounted for 51.2% of our trading business sales.
The remaining 48.8% came from our Core brands, which achieved 2006 sales of
£8.42m compared with £6.62m in 2005. The annualised growth rate was 5.9%.
We are increasing our international sales which rose from 9.2% of our total
turnover compared with 7.5% in 2005.
12 months 10 months 2005 annualised
to December 2006 to December 2005
£m £m £m
Turnover 17.25 12.28 14.73
Growth 40.5% 17.1%
Gross profit
Our gross profit margin stabilised at 53.5% as expected, slightly below the
previous year's margin of 54.4%. It should continue at this level, as the
opportunities to increase it much further are limited in the short term.
However, we expect further improvement once the development products are
launched.
Operating expenses
The increase in operating expenses reflects further significant investment in
the future growth of the Group. This included £1.69m investment in early
marketing and infrastructure to further the development of Isprelor and
Posidorm. The total expenditure of £6.63m was an increase of £0.95m (16.7%) on
the 2005 annualised figure, a consistent percentage of sales.
Profit before tax
The 2006 operating profit of £2.60m was 20.0% up on the 2005 figure. Excluding
the development spend of £1.69m, the trading business operating profit was
£5.12m - a 15.8% increase on 2005 annualised excluding unallocated costs.
However, because of increased investment in the development portfolio and two
operational issues in the first half that are now resolved, our pre-tax profit
reduced from £0.66m in 2005 to £0.50m in 2006.
12 months to December 10 months to
2006 December 2005
£m £m
Sales revenue 17.25 12.28
Gross profit 9.23 6.67
53.5% 54.4%
Trading business expenses 4.11 3.59
Trading business profit 5.12 3.08
Development projects (1.69) (1.14)
Unallocated costs (eg central admin) (0.83) (0.60)
Operating profit before finance costs
after non-recurring items 2.60 2.17
Earnings per share
The basic EPS figure of 0.32p reflects the recognition of a deferred tax asset
in the period. The EPS figure reflects the investment made during the year in
marketing and infrastructure expenses on the development projects. If the loan
stock was converted into ordinary shares, the EPS would not be diluted because
of the increase in earnings due to savings on the interest payable on the loan
stock.
Cash flow
Although the operating profit was £2.60m, a one off increase in working capital
associated with the acquisitions reduced the cash inflow from operating
activities to £1.12m in 2006, compared with £1.79m in 2005.
This reduction in cash flow also reflects increased investment in promotional
and development opportunities. This was reinvested into the Group by way of
£1.94m on the clinical development spend, an increase of £0.09m on 2005.
Interest and capital repayments on the debt funding amounted to £2.16m and
£0.70m respectively. This compares with £1.43m and £1.12m respectively in 2005.
We raised additional funds of £2.39m, net of expenses, during the year by way of
a placing of 14.7m shares.
Intangible assets
The further £1.94m invested in the development of Isprelor and Posidorm added to
the previous spend of £3.08m, bringing the cumulative total to £5.02m.
These costs meet the criteria set by IAS38 and have been capitalised. Each
project has been re-examined to ensure that it is technically feasible and has
ultimate commercial viability.
Financial liabilities and convertible debt
Financial liabilities increased over the year from £22.89m to £28.69m, including
the Convertible Loan Stock at £7.21m. The increase was principally due to
funding from Bank of Scotland for acquisitions made during the year.
Of the total financial liabilities, 57.2% is subject to fixed interest rates.
This is due to the Convertible Loan Stock interest being fixed and to other debt
interest rate swaps which reduce our interest rate exposure. We have reduced the
currency risk using a debt facility denominated in euros to match revenues
arising in the Eurozone.
Group income statement
at 31 December 2006
Year ended 10 months ended
31 December 2006 31 December 2005
Note £ £
Revenue 17,252,942 12,275,888
Cost of sales (8,022,485) (5,601,143)
Gross profit 9,230,457 6,674,745
Operating expenses
Administration and marketing expense (6,595,007) (4,716,258)
Share-based employee remuneration (33,941) (19,083)
(6,628,948) (4,735,341)
Operating profit pre non-recurring items 2,601,509 1,939,404
Non-recurring items 2 - 227,731
Operating profit 2,601,509 2,167,135
Finance costs
Interest paid 3 (2,154,594) (1,366,747)
Other finance costs 3 (65,405) (76,373)
Change in fair value of derivative financial 4 109,574 (62,846)
instruments
(2,110,425) (1,505,966)
Profit on ordinary activities before taxation 2 491,084 661,169
Taxation 11,456 -
Profit for the year attributable to equity 502,540 661,169
shareholders
Earnings per share
Basic and diluted (pence) 0.32 0.45
All of the activities of the company are classed as continuing.
There were no recognised gains or losses other than the profit for the financial
period.
Group balance sheet
at 31 December 2006
31 December 31 December 31 December 31 December 2005
2006 2006 2005
Note £ £ £ £
Assets
Non-current assets
Goodwill 1,128,973 1,128,973
Intangible assets
- Product licences 33,316,479 25,501,988
- Development costs 5,016,619 3,075,200
Property, plant and equipment 296,676 280,977
39,758,747 29,987,138
Current assets
Inventories 2,852,125 2,739,869
Trade and other receivables 5,223,557 3,034,240
8,075,682 5,774,109
Total assets 47,834,429 35,761,247
Equity
Ordinary share capital 1,620,618 1,473,559
Share premium account 11,274,650 9,030,959
Share option reserve 65,447 31,506
Reverse takeover reserve (329,349) (329,349)
Retained earnings (2,199,577) (2,702,117)
Total equity 10,431,789 7,504,558
Liabilities
Non-current liabilities
Long term financial liabilities 4 18,451,793 14,794,873
Convertible debt 7,208,714 7,167,100
Other liabilities 4 939,626 177,778
26,600,133 22,139,751
Current liabilities
Cash and cash equivalents 2,606,660 899,066
Financial liabilities 3,031,407 933,749
Trade creditors and other payables 5,164,440 4,284,123
10,802,507 6,116,938
Total liabilities 37,402,640 28,256,689
Total equity and liabilities 47,834,429 35,761,247
Statement of changes in shareholders' equity
at 31 December 2006
The accompanying accounting policies and notes form an integral part of these financial statements.
Group statement of changes in shareholders' equity
Share Share Shares to Reserves Retained Total
capital premium be issued earnings equity
£ £ £ £ £ £
Balance at 1 January 2006 1,473,559 9,030,959 31,506 (329,349) (2,702,117) 7,504,558
Issue of shares 147,059 - - - - 147,059
Premium on shares issued - 2,243,691 - - - 2,243,691
Employee benefits - - 33,941 - - 33,941
Profit for the period - - - - 502,540 502,540
Balance at 31 December 2006 1,620,618 11,274,650 65,447 (329,349) (2,199,577) 10,431,789
Balance at 1 March 2005 1,473,559 9,030,959 12,423 (329,349) (3,363,286) 6,824,306
Employee benefits - - 19,083 - - 19,083
Profit for the period - - - - 661,169 661,169
Balance at 31 December 2005 1,473,559 9,030,959 31,506 (329,349) (2,702,117) 7,504,558
Group and company cash flow statements
at 31 December 2006
Group Company
Year ended 31 10 months Year ended 31 10 months
December 2006 ended December 2006 ended
31 December 31 December
2005 2005
Note £ £ £ £
Cash flows from operating activities
Cash generated from operations 5 1,110,838 1,788,157 (2,643,909) (1,105,185)
Tax refund 11,456 - - -
Cash flows from operating activities 1,122,294 1,788,157 (2,643,909) (1,105,185)
Investing activities
Interest received 3 16,610 61,215 - -
Payment of deferred consideration (20,000) - - -
Development costs capitalised (1,941,419) (1,849,860) - -
Purchase of property, plant and equipment (129,395) (82,778) - -
Proceeds from divestment of Uniflu - 500,000 - -
Proceeds from sales of property, plant and
equipment 12,250 - - -
Transactions costs on divestment of Uniflu - (32,000) - -
Purchase of other intangible assets (6,814,491) (1,555) - -
Net cash used in investing activities (8,876,445) (1,404,978) - -
Financing activities
Net proceeds from the issue of shares 2,390,750 - 2,390,750 -
Interest paid and similar charges 3 (2,163,464) (1,426,319) - -
Other finance charges paid 3 (1,090) (1,643) - -
Receipt from borrowings 6,536,187 - - -
Repayment of borrowings (704,195) (1,115,839) - -
Finance lease payments (11,631) (13,904) - -
Net cash received from/used in financing s
activitie 6,046,557 (2,557,705) 2,390,750 -
Net movement in cash and cash
equivalents (1,707,594) (2,174,526) (253,159) (1,105,185)
Cash and cash equivalents at the beginning of (899,066) 1,275,460 262,086 1,367,271
the period
Cash and cash equivalents at the end of the (2,606,660) (899,066) 8,927 262,086
period
1. Basis of preparation
The financial information set out in the announcement does not constitute the
Group's statutory accounts for the years ended 31 December 2006 or 31 December
2005. The financial information for the period ended 31 December 2005 is
derived from the statutory accounts for that year which have been delivered to
the Registrar of Companies as published on the group's website on 12 May 2006.
The auditors reported on those accounts; their report was unqualified and did
not contain a statement under s.237(2) or (3) Companies Act 1985. The statutory
accounts for the year ended 31 December 2006 will be finalised on the basis of
the financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies.
2. Profit before taxation:
Year ended 10 months
31 December 2006 ended
31 December 2005
£
After charging
Auditors' remuneration - Group
- audit services 40,250 30,500
- non-audit services 11,855 53,574
Auditors' remuneration - Company
- audit services 11,000 8,500
- non-audit services 1,500 1,300
Employee benefit expense 33,941 19,083
Depreciation of tangible assets 112,462 108,374
Operating lease rentals 121,704 37,196
Loss on foreign exchange transactions - 12,547
After crediting 77,435 -
Profit on foreign exchange transactions
Non-recurring item
- Gain on disposal of Uniflu less impairment of intangibles - 227,731
Non-audit services relate to tax advice and compliance fees of £12,905 and other
of £450.
3. Finance costs - net
Year ended 31 December 10 months
2006 ended 31 December 2005
£
Net interest and similar charges
On loans and overdrafts (2,170,114) (1,426,319)
Finance lease interest (1,090) (1,643)
Interest income 16,610 61,215
(2,154,594) (1,366,747)
Other finance charges
Foreign exchange movement on long-term Euro denominated 54,770 (2,263)
debt
Amortised finance issue costs (120,175) (74,110)
(65,405) (76,373)
Finance costs - net (2,219,999) (1,443,120)
4. Financial instruments
The Group uses financial instruments comprising borrowings, some cash and liquid
resources, and various items such as trade debtors and trade creditors that
arise directly from its operations. The main purpose of these financial
instruments is to raise finance for the Group's operations.
The Group also has a bank facility denominated in euros. The purpose of this
facility is to manage the currency risk arising from the Group's operations. The
main risks arising from the Group's financial instruments are interest rate
risk, foreign currency risk and liquidity risk. The Board reviews and agrees
policies for managing each of these risks and they are summarised below. These
policies have remained unchanged from previous year.
Interest rate swaps - change in fair value of derivative financial instruments
Interest rate swaps have been remeasured at the period end by the Bank of
Scotland treasury department, taking into account time to expiry and market
factors. The change in the fair value has been taken to the income statement
and disclosed separately below.
Short-term debtors and creditors
Short-term debtors and creditors have been excluded from all the following
disclosures other than currency risk disclosures.
Interest rate risk
The Group finances its operations through a mixture of debt and equity.
The interest rate exposure of the financial liabilities of the Group as at 31
December 2006 was:
Fixed Floating Total
£ £ £
At 31 December 2006
Sterling 16,063,469 13,730,693 29,794,162
Change in fair value of financial instruments (46,728) - (46,728)
Euro 2,302,186 - 2,302,186
* 18,318,927 13,730,693 32,049,620
At 31 December 2005
Sterling 19,735,576 2,606,250 22,341,826
Change in fair value of financial instruments 62,846 - 62,846
Euro 2,688,702 - 2,688,702
* 22,487,124 2,606,250 25,093,374
* The value of financial liabilities shown above does not include unamortised
issue costs amounting to £518,792 (Period ended 31 December 2005: £504,750)
which are included in the book values shown in the maturity analysis.
Fixed rate financial liabilities
Weighted average fixed rate % Weighted average period for
which rate is fixed
At 31 December 2006
Sterling 7.50 5.95 years
At 31 December 2005
Sterling 7.11 4.32 years
The floating rate borrowings bear interest at rates based on LIBOR. The fixed
rate borrowings relate to bank debt, on which interest rate swaps which mature
on the 29 February 2008 have been taken out and convertible unsecured loan
stock.
The Group balance sheet also includes material financial assets in the form of
cash at bank and in hand totalling £232,254 (31 December 2005: £793,836) which
are exposed to floating interest rates based on LIBOR.
Currency risk
The group is exposed to transaction foreign exchange risk. The Group seeks to
hedge its exposures using a bank facility denominated in euros, with the
objective of minimising fluctuations in exchange rates on future
transactions and cash flows. The amount of loans denominated in euros is
disclosed in the interest rate risk table above.
Approximately 25% of the Group's sales are to overseas customers in the EU.
These sales are calculated in sterling, but invoiced in euros. The Group policy
is to minimise currency exposures on balances for which settlement is not
anticipated until a later date through the use of the euro bank facility. All
other Group sales are denominated in sterling.
Liquidity risk
The Group seeks to manage financial risk, to ensure sufficient liquidity is
available to meet the identifiable needs of the Group and to invest cash assets
safely and profitably. Short-term flexibility is achieved through the use of the
bank overdraft facilities.
Maturity of financial liabilities
The maturity profile of the Group's financial liabilities at 31 December 2006 is
as follows:
31 December 2006 31 December 2005
Finance Bank borrowings Finance Bank borrowings
leases and leases and
other loans other loans
£ £ £ £
Change in fair value of financial instruments - (46,728) - 62,846
In one year, or less 4,248 5,866,153 10,539 2,616,113
In more than one year, but not more than two - 3,828,112 5,269 4,380,244
In more than two years, but not more than five - 11,986,247 - 10,346,513
In more than five years - 9,892,796 - 7,167,100
4,248 31,526,580 15,808 24,572,816
Borrowing facilities
The group had £nil (31 December 2005: £nil) undrawn committed borrowing
facilities available at 31 December 2006. The Group's overdraft facility is not
fully utilised at the period end. The fair value of the financial instruments
is not materially different from the book value.
After the year end the Group restructured its bank borrowings and, under the new
arrangement the maturity profile of the Group's financial liabilities at 31
December 2006 would be as follows:
31 December 2006
Finance leases Bank borrowings and
other loans
£ £
Change in fair value of financial instruments - (46,728)
In one year, or less 4,248 2,838,914
In more than one year, but not more than two - 1,836,728
In more than two years, but not more than five - 5,779,073
In more than five years - 21,118,593
4,248 31,526,580
5. Cash generated from operations
Group Company
Year ended 31 10 months Year ended 31 10 months
December 2006 ended 31 December 2006 ended 31
December December 2005
2005
£
Result for the period before tax and finance
costs 2,601,509 2,167,135 151,649 254,984
Depreciation of property, plant and
equipment 112,462 108,374 - -
Change in inventories (112,256) (270,506) - -
Profit on disposal of fixed assets (11,016) - - -
Change in trade and other receivables (2,189,317) (884,627) (2,703,558) 44,710
Change in trade and other payables 675,515 876,429 (125,941) (1,423,962)
Write-off intangible assets - 120,269 - -
Gain on divestment of Uniflu - (348,000) - -
Share options charges 33,941 19,083 33,941 19,083
Cash flows from operating activities 1,110,838 1,788,157 (2,643,909) (1,105,185)
6. Post balance sheet events
After the year end the Group restructured its bank borrowings (see note 4).
In March 2007 the Group acquired the rights to Forceval in China. The
acquisition was made in conjunction with the Chinese distributor of the product,
in a joint venture company, of which Alliance holds 60%. The acquisition price
was £3.25m with Alliance paying a 60% share at £1.95m.
Sales of Forceval to China were £1.9m in 2006, having grown from £1.2m in 2005.
Funding for the acquisition, which is expected to be earnings enhancing in the
year to 31 December 2007, was via senior debt provided by the Bank of Scotland.
This information is provided by RNS
The company news service from the London Stock Exchange
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