Alliance Pharma first-half sales up 8%

AIM-listed Alliance Pharma said on Tuesday that it performed well in the first half, with sales up 8% and trading in line with expectations.

In a pre-close update ahead of its interim results, the specialty pharmaceutical company said sales rose to £50.3m from £46.4m in the first half of last year. Sales of the group's scar reduction product Kelo-Cote rose 52% to £6.2m while its MacuShield product for age-related macular degeneration saw sales grow 67% to £3.4m. Other brands performed in line with expectations.

Alliance said the weaker pound versus the euro and the US dollar benefited sales in the period by around £2.6m. However, the impact on operating profits will be much smaller due to the increases in cost of goods and operating costs denominated in these currencies.

Underlying free cash flow in the first half is expected to come in at around £11.1m compared to £2.1m last year, in line with the free cash flow generated in the second half of 2016, and marking a significant improvement on the first half of last year when free cash flow was suppressed by the build-up in working capital following the acquisition of the Sinclair Pharma products.

Net debt fell to approximately £63.4m as at 30 June 2017 from £76.1m at the end of December, mostly thanks to strong underlying cash generation and the £4m receipt from Sinclair following the settlement announced in March 2017.

Alliance added that it continues to expect a decision in the current quarter on the UK regulatory approval of Diclectin, a potentially major product for the treatment of nausea and vomiting of pregnancy.

At 0930 BST, the shares were up 0.7% to 53.29p.