(Alliance News) - Alliance Pharma PLC on Tuesday said profit plunged in the first half of 2023, despite revenue ticking up, as costs increased, prompting the company to opt against paying out a dividend.
In the six months that ended June 30, the Chippenham, England-based distributor of consumer healthcare brands and prescription medicines said pretax profit fell 62% to GBP6.2 million from GBP16.5 million a year earlier.
This was despite revenue ticking up 3.3% to GBP81.4 million from GBP78.8 million, as cost of sales rose 23% to GBP34.5 million from GBP28.1 million, while administrative expenses rose to GBP30.2 million from GBP28.5 million.
As a result of the declining performance, Alliance Pharma declared no dividend for the first half period, down from 0.59 pence per share a year earlier.
"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, which is now fully under our control. Meanwhile our wider portfolio continues to provide a robust platform from which to grow our Consumer Healthcare brands," said Chief Executive Officer Peter Butterfield.
"The second half of 2023 has got off to an encouraging start as we have addressed the regulatory issues and recommenced production of certain products impacted in the first half of the year. Our Kelo-Cote CBEC distributor has begun to place orders and we have contractual agreements in place to secure the future orders required to meet our expectations for full year revenues. We anticipate strong group sales growth in [the second half] as our marketing campaigns yield benefits and we launch several new products to grow our market share."
Looking ahead, Alliance Pharma said its free cash flow is expected to continue to build strongly for the remainder of 2023, alongside reducing its net debt and leverage by the end of the year.
It said expectations for full year operating performance remains unchanged.
Shares in Alliance Pharma were up 1.1% to 47.84 pence each in London on Tuesday late morning.
By Greg Rosenvinge, Alliance News reporter
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Alliance Pharma (APH)