Our strong underlying growth and cash generation, coupled with the enhanced banking facilities, mean we are well positioned to pursue future growth opportunities

CEO Peter Butterfield 

What the company does

Alliance Pharma PLC (LON:APH) is an AIM-traded company that focuses on the acquisition and licensing of pharmaceutical and healthcare products.

Over the past 20 years the group has made 35 acquisitions, which include healthcare and pharma businesses, and rights to products.

Alliance has four international “star” brands, which are managed and marketed centrally and sold internationally.

These brands include: Lice treatment Vamousse; Kelo-cote, a scar reduction product; MacuShield, a supplement recommended by eye experts; anti-fungal shampoo Nizoral; and Xonvea, a pregnancy nausea treatment. It also has a number of pills and medications called local brands, which either occupy established therapeutic niches or have a strong regional heritage.

So, how’s Alliance performing?

It said it was on track to hit full-year expectations as it delivered a solid first-half performance, underpinned by its “star” international brands.

Strong cash generation from the business has allowed it “de-lever” over the six months ending June 30.

This, combined with a new banking facility, will allow the firm to make “targeted acquisitions” over the next few years, chief executive Peter Butterfield told investors.

Revenues for the period were £70.3mln, up 28% on a constant currency basis, or an organic 10% if the impact of recent purchases was stripped out.

Underlying earnings (EBITDA) were £18.8mln, up 34%, while net debt fell by £11.4mln in the six months from the end of December to £74.1mln. The interim dividend rises 10% to 0.536p.

The Asia-Pacific region was also a strong performer, while the local brands performed in line with expectations, Alliance said.

The Nizoral medicated shampoo franchise performed “slightly below expectations” in the first half.

Looking ahead

On Nizoral it said: “Integration and transition activities are progressing well and, as we start to bring the product licences under our control, we will be able to manage the associated commercial relationships much more proactively going forwards.”

Turning to current trading, Alliance said the second half had started well, leaving it on track to hit revenue and profit targets.

“Our strong underlying growth and cash generation, coupled with the enhanced banking facilities, mean we are well positioned to pursue future growth opportunities,” added CEO Butterfield.