TIDMAPH
RNS Number : 3712I
Alliance Pharma PLC
25 March 2015
For immediate release 25 March 2015
ALLIANCE PHARMA PLC
("Alliance" or the "Group")
Results for the year ended 31 December 2014
Alliance Pharma plc (AIM: APH), the speciality pharmaceutical
company, is pleased to announce its results for the year ended 31
December 2014.
Financial Highlights
-- Revenue GBP43.5m (2013: GBP45.3m)
-- Pre-tax profit GBP10.8m* (2013: GBP12.0m)
-- Adjusted EPS 3.36p* (2013: 3.82p)
-- Free cash flow GBP10.3m (2013: GBP8.2m)
-- Net bank debt GBP21.1m (2013: GBP25.2m)
-- Low gearing with Debt to EBITDA ratio of 1.6 times
-- Proposed dividend:
o Final dividend up 10% to 0.667p per share (2013: 0.605p)
o Full year dividend up 10% to 1.000p per share (2013:
0.908p)
* Before exceptional item, being impairment of Pavacol-D
intangible
Note: 2013 figures restated for impact of adopting IFRS 11 Joint
Arrangements
Operational Highlights
-- Irenat(TM) acquisition in January 2014
-- MacuShield(TM) acquisition in February 2015
-- Hydromol(TM) continues to demonstrate good growth, achieving
year on year sales growth of 15%
-- Ashton & Parsons Infants' Powder(TM) sales achieve very
significant growth to GBP1.4m (2013: GBP0.4m) as a result of
product redesign and improved supply
Commenting on the results, Andrew Smith, Alliance's Chairman,
said: "In 2014 Alliance performed well, taking only a modest dip in
sales and profits in a challenging year, which underlines the
resilience of our business. We enter 2015 well placed for resumed
growth. The recent acquisition of the fast-growing MacuShield brand
together with the expected return of ImmuCyst(TM) in the second
half of this year add to the growth drivers of our portfolio."
For further information:
Alliance Pharma plc + 44 (0) 1249 466966
John Dawson, Chief Executive
Richard Wright, Finance Director
www.alliancepharma.co.uk
Buchanan + 44 (0) 20 7466 5000
Mark Court / Sophie Cowles / Jane
Glover
Numis Securities Limited + 44 (0) 20 7260 1000
Nominated Adviser: Michael Meade /
Freddie Barnfield
Corporate Broking: David Poutney
Notes to editors:
About Alliance
Alliance, founded in 1998, is an AIM listed speciality
pharmaceutical company based in Chippenham, Wiltshire, UK. The
Company has a strong track record of acquiring the rights to
established niche products and owns or licenses the rights to more
than 60 pharmaceutical products and continues to explore
opportunities to expand the range.
Alliance joined the AIM market of the London Stock Exchange in
December 2003 and trades under the symbol APH.
STRATEGIC AND BUSINESS REVIEW
In 2014 Alliance performed well, taking only a modest dip in
sales and profits in a challenging year, which underlines the
resilience of our business. We enter 2015 well placed for resumed
growth. While sales of our cyclical toxicology product reduced to a
minimal level and Nu-Seals(TM) continued its moderate decline
arising from the Irish government's moves on generic substitution,
much of the adverse impact was offset by further solid growth in
the rest of the portfolio. This growth will be augmented in 2015 by
the acquisition of MacuShield, completed in February 2015, and the
expected resumption of ImmuCyst sales in the second half of the
year.
Adoption of IFRS 11 Joint Arrangements
The Group was required to adopt International Financial
Reporting Standard 11 Joint Arrangements in 2014. Alliance's joint
ventures, both of which are in China, are now accounted for using
the equity method which only brings the net result into the
P&L. Previously they have been accounted for using proportional
consolidation which incorporated our share of sales and costs
separately. Prior year figures have been restated accordingly and
all references herein to prior year numbers are to the restated
figures. More details of the impact can be seen in Note 11.
Trading performance
Excluding joint ventures, revenue reduced by 4% to GBP43.5m
(2013: GBP45.3m). The decline was due to two products: sales of our
cyclical toxicology product fell in line with the low part of its 2
1/2 -year replacement cycle and the loss of the tender; and
Nu-Seals sales reduced to GBP2.5m under pressure from generic
competition. Together, these products accounted for a revenue
reduction totalling some GBP4.3m. This was substantially offset by
healthy revenue growth of GBP2.5m (11%) in the rest of our
portfolio.
The underlying growth was led by another double-digit
performance from Hydromol, with sales up 15%. We have grown annual
sales of this brand from just under GBP1m when we acquired it in
2006 to over GBP6m in 2014. Sales of the Opus(TM) stoma care
products grew by 10% to GBP4.3m.
With supplies of Ashton & Parsons Infants' Powders now free
of production constraints, sales are developing well - more than
tripling to GBP1.4m in 2014. Gelclair(TM), our treatment for oral
mucositis, continued to grow well, with sales up 10% to GBP1.3m and
MolluDab(TM), the molluscum contagiosum treatment that we launched
in 2013, made further good progress in this niche market.
We were also pleased with the performance in 2014 of our recent
acquisitions - Lypsyl(TM) in December 2013 and Irenat in Germany in
January 2014. With sales of GBP0.8m, Irenat continues to show the
stability that made it an attractive first product for our German
business. With Lypsyl we have halted the decline experienced under
its previous owners. To increase sales we have begun to capitalise
on its still-substantial consumer recognition and are currently
researching market perceptions and developing our strategy for
investment in order to breathe new life into this well-known
brand.
We have been unable to supply ImmuCyst, our bladder cancer
treatment, since production was halted at Sanofi's manufacturing
plant in Canada in mid-2012. ImmuCyst had peak sales of over GBP4m
per annum before production was suspended. Regulatory validation of
the refurbished production facility is taking significantly longer
than initially anticipated, and we now expect to resume sales in
the second half of 2015. Market feedback indicates continued demand
for the product, and we expect to rebuild substantial sales over
time as hospitals revert to ImmuCyst. Indeed we are aware that the
only licensed competitor is not currently able to supply the full
market demand. We will do all we can to bring ImmuCyst back as soon
as possible. In the meantime, we are at an advanced stage in the
process to consider our claim for profits lost during the extended
manufacturing hiatus.
Generic competition continues to erode Nu-Seals sales in
Ireland. The Irish regulator has still not adjudicated on which
low-dose aspirin products should be included on the list of
interchangeable medicines that would permit pharmacists to dispense
generic products against branded prescriptions. We have submitted a
strong case to the regulator for Nu-Seals to be kept off this list
but if Nu-Seals is eventually included, sales are likely to fall
substantially, which may well lead to a non-cash impairment charge
against the GBP9.1m intangible asset.
The planned hand-back of nine products to Novartis, which we had
been distributing since the origin of the company in 1998, was
completed in 2014. It had been phased over the past two years, and
the impact is low as these products generated only GBP0.3m of gross
margin for us in 2014.
Financial performance
Pre-exceptional pre-tax profit was GBP10.8m, down 10% from 2013.
However, excluding the cyclical toxicology product, underlying
profit from the rest of the portfolio showed a healthy increase of
15%. Adjusted earnings per share were 3.36 pence, down from 3.82
pence in 2013.
Gross margin for the full year was 57.5%. This was lower than
the 60.4% achieved in 2013, which was flattered by the peak sales
of the higher-margin toxicology product, but higher than the 56.9%
achieved in 2012. We expect to sustain margins at about the 2014
level going forward.
Operating costs were well contained at GBP13.1m (2013:
GBP13.5m). We made further modest savings on central overheads, but
most costs remained broadly stable. Marketing investment remained
broadly flat, although we continued to shift the emphasis gently
from our dermatology and secondary care products in favour of our
growing OTC consumer portfolio.
Production issues have halted the sales of Pavacol-D(TM), our
cough-suppressant medicine. We are currently looking at how to
bring this brand back to market but there is a significant risk
that it will not be economical to do so and therefore the related
GBP0.6m intangible asset has been written off in full. Apart from
this one-off non-cash impairment charge, the impact on profits is
not significant as sales of Pavacol-D have been very low for the
past few years as a result of various supply issues.
The reduced sales contribution from the cyclical toxicology
product resulted in a lower operating profit before exceptional
items of GBP11.8m (2013: GBP13.3m). This represented 27.1% of sales
(2013: 29.4%) - still a very healthy percentage.
Our financing costs reduced for the sixth consecutive year to
GBP1.0m (2013: GBP1.3m). This was as a result of the conversion of
the last of the convertible loan stock in 2013 and the reduction in
net bank debt from GBP25.2m at the start of the year to GBP21.1m at
the year-end. Year-end debt to EBITDA gearing remained flat at 1.6
times.
Alliance is a highly cash generative business, and 2014's free
cash flow of GBP10.3m was well ahead of the GBP8.2m achieved in
2013. GBP3.8m of this was reinvested in acquisitions during the
year and GBP2.4m was returned to shareholders via the
dividends.
Alliance Pharma (LSE:APH)
Historical Stock Chart
From Mar 2024 to Apr 2024
Alliance Pharma (LSE:APH)
Historical Stock Chart
From Apr 2023 to Apr 2024
