LONDON (Alliance News) - Alliance Pharma PLC Wednesday said it will meet market expectations for the full year, and raised its interim dividend, despite seeing a fall in pretax profit for the half year to end-June.
The company proposed an interim dividend of 0.33 pence, up from 0.303 pence in the previous year.
Alliance Pharma posted a pretax profit of GBP5.4 million, down from GBP6.8 million, as revenue declined to GBP21.4 million from GBP22.8 million, and cost of sales rose, offsetting lower administrative and marketing expenses.
Sales of the company's cyclical toxicology product declined during the half year, in line with the two and a half year replacement cycle of the product, it said. The product now faces competitors, putting pressure on prices, and Alliance Pharma said revenue from this product are likely to remain very low as replacement contracts have been awarded to these competitors.
Additionally, sales of its Nu-Seals low-dose aspirin declined to GBP1.4 million from GBP1.6 million due to generic competitors. Alliance Pharma also warned that if the Irish regulator opts to include low-dose aspirin products on the list of interchangeable medicines, sales of the product will fall substantially.
These declines were offset by growth elsewhere in the company's portfolio, such as its Hydromol dermatology range, its oral mucositis treatment Gelclair, and its Ashton & Parsons Infants' Powders. Alliance Pharma said it resolved production problems for Infant's Powders, and it now expects further growth from the product going forward.
Including its share of joint ventures, revenue for the half year was GBP22.5 million.
For the rest of the year Alliance Pharma expects growth to continue to come from Hydromol, and increasing contributions from its consumer products.
Whilst the company highlighted a delay in the re-introduction of Sanofi SA's ImmuCyst product, which is expected to resume sales in the first half of 2015, and the continuing pressure on Nu-Seals, it said that it expects new acquisitions to offset these issues.
Alliance Pharma noted that it had GBP22 million of its acquisition bank facility still undrawn, and said it was working on an "attractive pipeline of opportunities."
Shares in Alliance Pharma were trading down 2.1% at 33.41 pence Wednesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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