Alliance Pharma climbs as overseas business gathers steam

Alliance Pharma's shares climbed on Tuesday as annual revenues climbed after its performance was boosted by acquisitions and international business, with overseas sales overtaking domestic revenues for the first time.

The international healthcare group reported 2018 annual revenue of £118.2m, an increase of 16% compared to the year before, as income from Vamousse, a head lice treatment, grew 16% under the company’s ownership and Nizoral, a Johnson & Johnson medicated shampoo which Alliance acquired the Asia-Pacific rights to in June, for £60m, traded in line with expectations.

Sales in Mainland Europe increased by 25% to £25.4m, largely due to growth in Kelo-cote sales, revenue in the USA and Rest of the World jumped by 54% to £40.6m and domestic revenue drifted 5% lower to £52.3m.

Profit before tax dropped by 19% to £22.8m as it was hampered by a 31% increase in administrative and marketing expenses to £41.9m and impairment costs.

Peter Butterfield, chief executive of Alliance Pharma, said: "In 2018 we continued to deliver on our strategy, with strong sales and profit growth, led by our International Star brands and acquisitions. 2018 marked a milestone in the internationalisation of Alliance in that, for the first time, our overseas sales exceeded those in the UK. The acquisition of Nizoral brings increased scale and opportunities for us in the Asia Pacific region and, together with the creation of a trading operation in the US, further increases our international footprint, whilst the UK approval of Xonvea offers further organic growth prospects for the group."

Xonvea is a treatment for nausea and vomiting during pregnancy where conservative management has failed, and was approved in the UK in July 2018 and launched in October, with the AIM traded company stating that "early signs are encouraging, with the product having achieved its first sales and formulary inclusions."

"2019 has started well and we look forward to continuing on our growth path in the year ahead and to deploying the group's strong cashflow to further develop as a leading international healthcare business," said Butterfield

Alliance Pharma's shares were up 5.57% at 68.20p at 1045 GMT.