Alliance Pharma on track despite currency fluctuation issues

Specialty pharmaceutical group Alliance Pharma said on Wednesday that it was on track to meet expectations after "strong" performances from its MacuShield, Vamousse and Kelo-Cote brands.

In a trading update covering the six months ended 30 June, Alliance reported a 10% increase in revenues, up to £54.4m, but said that trading profit increased less dramatically due to the phasing of spending on marketing and selling activities.

Scarring treatment Kelo-Cote saw a sales increase of 77% to almost £11m over the period, while MacuShield saw its sales rise by 22% to £3.7m

Meanwhile, head lice prevention brand Vamousse achieved sales of £2.7m after being acquired by Alliance in December and is "well-placed" for growth in the second half of the year given the upcoming back-to-school period.

Revenues from what Alliance has branded its ‘local hero’ brands were in line with forecasts but suffered slightly from a combination of manufacturing delays and distributor order phasing.

Despite a strong performance from the AIM-traded company, Alliance said its top line was negatively affected by currency fluctuations, due mainly to the strength of sterling, losing out on roughly £0.9m.

Underlying free cash flow was down from £11.1m at £10.1m, driven by a planned increase in total inventory holding of £2.1m, while net debt increased by 19% to £86.3m due to funding required for the acquisition of anti-dandruff shampoo Nizoral.

Looking forward, the company said it expects to launch anti-nausea treatment Xonvea in the UK in the autumn.

Alliance Pharma shares were down 4.68% to 89.60p at 0906 BST.