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Alliance Pharma posts 2018 revenue surge

Even with a slight drop-off in sales of its local brands, strong showings from Alliance’s ‘star’ products helped revenue jump 22% last year

man with scar
Scar reduction treatment Kelo-cote was the standout performer in 2018

A mixture of organic growth and acquisitions helped revenue at Alliance Pharma PLC (LON:APH) to surge last year.

The AIM company has five ‘star’ brands which are managed and marketed centrally and then sold internationally.

READ: Alliance happy with two-pronged approach

Of those, scar reduction gel Kelo-cote was the standout performer, registering a 68% rise in sales in 2018 to £22.5mln (2017: £13.3mln) thanks to booming demand in Asia and mainland Europe.

Headlice treatment Vamousse racked up £5.8mln of sales in its first full year having been acquired in December 2017, while MacuShield, a supplement recommended by eye experts also performed well, with sales up 6% to £7.0mln (2017: £6.6mln).

Newbies chip in

During the course of the year, Alliance added anti-dandruff shampoo Nizoral and morning sickness pill Xonvea to its portfolio.

Nizoral, which was bought from pharma giant Johnson & Johnson in June, brought in £10.9mln in its first six months. Xonvea was launched in October and is “on track” having recorded its first sales.

Overall, group revenue jumped 22% year-on-year to £124.0mln (2017: £101.6mln). Excluding acquisitions, revenue growth was still a healthy 4%.

Local brands struggled in H1

Holding Alliance back was its local brands – cash generative brands that do well in a couple of territories, unlike the international stars which have global appeal.

Sales of these local products dropped 5% during 2018 to £77.8mln (2017: £81.6mln), although performance did pick up in the second half.

At £16.1mln (2017: £22.0mln), free cash flow was slightly stronger than Alliance had anticipated after allowing for costs associated with the implementation of the Falsified Medicines Directive, Brexit and launch costs relating to Xonvea.

‘Further growth’ expected in 2019

In the year ahead, free cash flow is expected to exceed 2017 levels which will reduce leverage. As planned, net debt remained at around £85.0mln (H1 2017: £86.3mln) last year.

“We are very pleased to report continued strong momentum in our business, with sales in 2018 up 22% compared with the previous year,” said Peter Butterfield.

“We look forward to delivering further growth in the year ahead and to employing the group's strong cash flow to further develop the business as the year progresses.”

Quick facts: Alliance Pharma PLC

Price: 75.5 GBX

Market: AIM
Market Cap: £400.46 m

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