Interim Results for the six months ended 30 June 2024
Board expectations for year-end performance remain unchanged
Alliance Pharma plc (AIM: APH), the international healthcare group, is pleased to announce its interim results for the six months ended 30 June 2024 (“the Period”). As previously reported in the trading update on 29 July 2024, strong revenue growth for the Kelo-Cote franchise drove Group see-through* revenues of £84.8m in the Period (H1 23: £82.4m), up 2.8% versus the prior period and up 5.0% at constant exchange rates (“CER”).
The business remains strong, with solid cash generation expected to continue, and the Board’s expectations for Group performance in the full year remain unchanged.
FINANCIAL SUMMARY
Unaudited six months ended June 30 | 2024 Underlying (£m) | 2024 Reported (£m) | 2023 Underlying (£m) | 2023 Reported (£m) | Growth underlying | Growth reported |
Revenue (see-through basis)* | 84.8 | 84.8 | 82.4 | 82.4 | 2.8% | 2.8% |
Revenue (statutory basis) | 83.9 | 83.9 | 81.4 | 81.4 | 3.0% | 3.0% |
Gross profit | 50.7 | 50.7 | 46.9 | 46.9 | 8.1% | 8.1% |
Profit before taxation | 12.7 | 5.9 | 10.3 | 6.2 | 23.3% | -4.7% |
Basic earnings per share | 1.80 | 0.86 | 1.58 | 0.95 | 13.9% | -9.5% |
Free cash flow* | 8.8 | 11.0 | ||||
Cash from operations | 14.3 | 15.5 |
OPERATING AND FINANCIAL SUMMARY
- Consumer Healthcare revenues +5.6% CER to £61.4m (H1 23: £59.7m) with a strong performance in the Kelo-Cote franchise revenues, offsetting expected declines in Nizoral due to stocking cycles.
- Amberen revenues declined 8.9% CER to £5.2m but remedial actions are being implemented.
- Other consumer healthcare revenues increased 8.9% CER to £18.7m (H1 23: £17.2m) with MacuShield up 16.0% CER to £4.8m.
- Prescription medicine revenues grew 3.4% CER to £23.3m (H1 23: £22.7m) reflecting strong growth in Hydromol (up 9.6% CER to £5.1m) and a return to stock of certain products.
- Gross margin up 300bp, underlying EBITDA up 6.4% to £19.1m as we increase investment in marketing and innovation.
- Robust free cash flow of £8.8m (H1 23: £11.0m) driving £8.0m reduction in net debt to £83.2m at 30 June 2024 (31 December 2023: £91.2m).
- Group leverage of 1.81x as at 30 June 2024 (31 December 2023: 2.05x) and is expected to fall further in H2 to c.1.5x at the end of the year.
DEVELOPING OUR BUSINESS
- Senior management changes implemented to improve efficiency, to bring the consumer closer to the heart of the business and to accelerate decision making.
- Innovation pipeline continues to deliver with three significant launches in the Period: Amberen Energy, Mood and Sleep Gummy, MacuShield Omega 3 tablets and ScarAway Kids formulation. Sales from new product launches expected to double in FY 2024 versus FY 2023.
- ERP system successfully implemented in China, completing the roll-out of one-ERP platform across Alliance.
- Continued progress on Sustainability in the Period: publishing our second, voluntary, TCFD report, becoming a member of the UN Global Compact and receiving Level 2 Evergreen Assessment as an NHS supplier.
- Successful appeal of Competition and Markets Authority (“CMA”) decision clearing Alliance, and former CEOs Peter Butterfield and John Dawson, of any wrongdoing. £7.9m provision for potential fine released in FY 2023 accounts.
“I am pleased by the performance we delivered in H1 24 as we continue to see the benefits of our investment in both marketing and innovation. Our free cash flow is expected to build strongly throughout the remainder of 2024, which we anticipate will enable us to reduce further our net debt and leverage by the end of the year.
Since the end of H1 2024 we have strengthened further our marketing campaigns. I have also implemented a number of senior management changes to accelerate decision making and to bring the consumer closer to the heart of the business, and I see further opportunity to deliver efficiency gains and capability improvements over time.
The Board’s expectation for full year financial performance is unchanged.”
* The performance of the Group is assessed using Alternative Performance Measures (“APMs”), which are measures that are not defined under IFRS, but are used by management to monitor ongoing business performance against both shorter term budgets and forecasts and against the Group’s longer term strategic plans. APMs are defined in note 17.
Specifically, see-through revenue includes all sales from Nizoral as if they had been invoiced by Alliance as principal. For statutory accounting purposes the product margin relating to Nizoral sales made on an agency basis is included within Revenue, in line with IFRS 15.
ANALYST MEETING & WEBCAST
A meeting for analysts will be held at 10:00am this morning, 30 September 2024, at Burson Buchanan, 107 Cheapside, London EC2V 6DN. For further details, analysts should contact alliancepharma@buchanan.uk.com.
A live webcast of the analyst meeting will be available at this link:
https://stream.buchanan.uk.com/broadcast/66def9f76b479f7c8e789e9a
Following the meeting, a replay of the webcast will be made available at the investor section of Alliance’s website, https://www.alliancepharmaceuticals.com/investors/
For further information:
Alliance Pharma plc
Head of Investor Relations: Cora McCallum
+ 44 (0)1249 466966
+ 44 (0)1249 705168
ir@allianceph.com
Burson Buchanan
Mark Court / Sophie Wills
+ 44 (0)20 7466 5000
alliancepharma@buchanan.uk.com
Deutsche Numis Limited (Nominated Adviser and Joint Broker)
Freddie Barnfield / Duncan Monteith / Sher Shah
+ 44 (0)20 7260 1000
Investec Bank plc (Joint Broker)
Patrick Robb / Ben Lawrence / Maria Gomez de Olea
+ 44 (0) 20 7597 5970
About Alliance
Alliance Pharma plc (AIM: APH) is a growing consumer healthcare company. Our purpose is to empower people to make a positive difference to their health and wellbeing by making our trusted and proven brands available around the world.
We deliver organic growth through investing in our priority brands and channels, in related innovation, and through selective geographic expansion to increase the reach of our brands. Periodically, we may look to enhance our organic growth through selective, complementary acquisitions.
Headquartered in the UK, the Group employs around 290 people based in locations across Europe, North America, and the Asia Pacific region. By outsourcing our manufacturing and logistics we remain asset-light and focused on maximising the value we can bring, both to our stakeholders and to our brands.
For more information on Alliance, please visit our website: www.alliancepharmaceuticals.com