Consumer brands underpin Alliance Pharma performance

(Sharecast News) - Alliance Pharma reported a 4% fall in statutory revenue in its preliminary results on Tuesday, to £129.8m, although it said performance from its consumer healthcare brands was "strong", with that division now accounting for more than two thirds of group see-through revenues.
The AIM-traded firm said 'Kelo-cote' revenues were up 12%, and Nizoral see-through revenues rose 4%, resulting in an overall rise in consumer brands see-through revenues of 1% to £93m.

Statutory revenues in its consumer brands operation were 2% firmer for the year ended 31 December, at £85.3m.

Prescription medicine revenues were down 14% to £44.5m, meanwhile, which the board put down to delays in routine treatments as a result of the Covid-19 pandemic.

The company completed a "substantial" United States acquisition in December, bringing the "highly successful and fast-growing" 'Amberen' brand into the group, and creating scale in its US operations.

Underlying profit before tax was ahead 2% at £33.5m, although reported profit before tax was down 58% to £13m, due to non-cash impairment and amortisation charges, and acquisition costs relating to the Biogix acquisition.

The board said group leverage post-acquisition was 2.43x, up from 1.48x at the end of 2019, with that leverage expected to decrease to below 2x during 2021.

Free cash flow was described as "very strong" at £34.1m, which the company said was helped by "favourable movements" in net working capital.

Cash generated from operations gained 19% year-on-year to £46.4m.

The board proposed a final dividend payment of 1.074p per share, giving a total dividend of 1.610p for the year, well above the 0.536p distribution made for 2019.

"The group delivered a robust operational and financial performance in 2020, despite the challenges of the pandemic," said chief executive officer Peter Butterfield.

"Whilst top line revenue growth was constrained, our consumer healthcare business has performed well and we have seen some strong performances from a number of our brands, in particular Kelo-cote.

"Through maintaining good control of our operating costs, we have continued to deliver a resilient underlying operating performance and our free cash flow has also remained very strong, enabling us to pay down more of our debt than expected ahead of completing the Biogix acquisition in December."

Butterfield said the "strategically significant" acquisition was "testament" to the company's ability to continue to deliver on its longer-term growth strategy, notwithstanding the global pandemic.

"In addition to bringing another sizable and fast-growing brand into the group, it significantly enhances the scale of our business operations in the US, the world's largest consumer healthcare market, and in consumer healthcare more generally.

"2021 has started well and we remain confident in our ability to continue to deliver a strong operational and financial performance, in line with market expectations.

"We look forward to regaining the strong momentum and revenue growth that the group has enjoyed in recent years, whilst also benefiting from the additional scale and future growth opportunities that Amberen brings."

At 1609 GMT, shares in Alliance Pharma were up 2.59% at 87.1p.