Alliance Pharma on track despite currency fluctuation issues

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.