Alliance Pharma reports resilient first-half trading

Alliance Pharma reported see-through revenues of £82.4m in a first-half trading update on Tuesday, representing a 1.1% increase year-on-year.

However, at constant exchange rates, revenues decreased 1.7%, including revenue from the recent US acquisition of ‘ScarAway’ and the US rights to ‘Kelo-Cote’.

The AIM-traded firm said that, despite some regulatory challenges causing manufacturing delays in certain smaller products, the Kelo-Cote franchise and ‘Nizoral’ performed in line with expectations, while ‘Amberen’ revenues returned to growth in the second quarter.

It reported free cash flow of £10.8m in the first half - a significant increase compared to £5.1m in the same period a year earlier.

Net debt also decreased, by £7.5m to £94.5m at period-end on 30 June.

The board said it expected both net debt and group leverage to decline further in the second half, with group leverage expected to be below 2.0x by year-end.

Alliance Pharma said it remained confident in its outlook, anticipating strong gross margin improvement, substantial EBITDA expansion, and a solid second-half performance.

“I am pleased to be back in the business full time and to be focussed on driving the company's growth through the implementation of our long-term strategy,” said chief executive officer Peter Butterfield.

“We are encouraged by the recovery in China and the significant market share gains made by Kelo-Cote, along with the excellent progress of Nizoral.

“Meanwhile our wider portfolio continues to provide a robust platform from which to grow our consumer healthcare brands.”

Butterfield said the company’s free cash flow was expected to continue to build strongly throughout 2023, which it expected would reduce its net debt and leverage by the end of the year.

“The board's expectation for full year operating performance is unchanged.”

At 0939 BST, shares in Alliance Pharma were up 9.33% at 49.8p.

Reporting by Josh White for Sharecast.com.