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Alliance Pharma PLC: DEEP DIVE

Alliance Pharma hints at further acquisitions as it gets off to a good start in 2019

Chief executive Peter Butterfield said the company has started 2019 well-positioned for growth after a strong performance in 2018.
OVERVIEW: APH The Big Picture
Alliance recently bought the rights Johnson & Johnson medicated shampoo, Nizoral
  • Star brands boost 2018 revenues 

  • Good start to 2019 with trading in line with expectations

  • Further acquisitions eyed 


What Alliance Pharma does:

Alliance Pharma PLC (LON:APH) is an AIM traded company that focuses on the acquisition and licensing of pharmaceutical and healthcare products.

Over the past 20 years the group has made 35 acquisitions, which include healthcare and pharma businesses, and rights to products.

Alliance has five so-called "star" brands, which are managed and marketed centrally and sold internationally.

These brands include: Lice treatment Vamousse; Kelo-cote, a scar reduction product; MacuShield, a supplement recommended by eye experts; anti-fungal shampoo Nizoral; and Xonvea, a pregnancy nausea treatment.

Inflection points:

  • In the year to 31 December 2018, statutory turnover was up 16% to £118.2mln while the “see-through” figure was ahead 22% at £124mln, boosted by a robust performance by Kelo-cote and a contribution from recently acquired Nizoral. Like-for-like revenues, which strip out the impact of recent purchases, were up 4%.
  • Overseas sales exceeded surpassed domestic revenues in 2018 for the first time ever.
  • The integration of Nizoral, a Johnson & Johnson medicated shampoo, for which Alliance acquired the Asia-Pacific rights last June for £60mln, is progressing well and traded in line with expectations last year.
  • Underlying earnings (EBITDA) rose 19% to £32.4mln last year, while free cash flow was strong at £16.1mln
  • Alliance hiked its total 2018 dividend 10% to 0.977p, giving a total of 1.464p. The payout was covered more than three-times by underlying earnings.
  • Chief executive Peter Butterfield has hinted at further acquisitions as the group looks to deploy its strong cash flow to further develop the business.

Blue Sky:

Butterfield said the company has started 2019 well-positioned for growth after a strong performance in 2018.

“The acquisition of Nizoral and the continued strong performance of Kelo-cote leave us well-placed to leverage opportunities for further organic growth, particularly in the fast-growing Asia Pacific region, and we are currently scaling-up our local infrastructure and resources to facilitate this,” he said.

He added: “Trading in 2019 has started well and the group is trading in line with expectations for the full year.

“Our strong cash generation in 2019 and planned increase in debt facilities mean that, as the year progresses, we will be well-placed to continue to invest in our international star brands to drive expected strong organic growth, supplemented by targeted acquisitions to take advantage of operational leverage and to enhance our geographical reach.”

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Alliance Pharma PLC Timeline

January 21 2019

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