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Alliance Pharma chips away at debt as revenues soar in first half

Net debt was reduced by almost £12mln in the first six months of the year, as sales of Alliance’s Kelo-Cote scar treatment and other international brands jumped

kelo-cote scar
The complete set of first-half results are due out towards the end of September

Revenues at Alliance Pharma PLC (LON:APH) soared by a third in the opening six months of 2019, with growth underpinned by strong demand in Asia for its Kelo-Cote scar treatments.

For the first half ended 30 June, revenue is expected to be £70.3mln, up 29% on the same period last year (H1 18: £54.5mln). Excluding acquisitions, revenue was up 10% in the period.

READ: Alliance provides confident assessment of prospects

Within that, sales of Alliance International Star Brands almost doubled to £30.9mln (H1 18: £17.3mln) due to the additions of anti-dandruff shampoo Nizoral and Xonvea morning sickness pills.

Kelo-Cote also enjoyed a strong first half, with sales climbing by 20% to £13.1mln as its popularity in the Asia Pacific continues to grow.

Sales of Alliance’s Local Brands, home to around 90 products, increased by 6% versus last year to £39.4mln (H1 18: £37.2mln).

Debts cut

Underlying free cash flow was also “strong” at £14.5mln (H1 18: £10.1mln), which allowed bosses to trim net debt by almost £12mln during the first half to £74.1mln.

As a result, leverage – which is calculated by adjusted net debt divided by underlying earnings – fell to 1.95 times, and it is expected to come down further as the year progresses.

Alliance also announced it has agreed a new £165mln credit facility with its lenders together with a £50mln ‘accordion’ should more money be required.

The new facility replaces the old one, which ran through until December 2020, and is available until July 2023.

Well-positioned

“We have seen continued momentum in our business during the first half of 2019, with sales up 29% compared with the previous year and growth coming largely from our consumer healthcare products, which now account for over half of our portfolio,” said chief executive Peter Butterfield.

“As we continue to deliver good organic growth and strong cashflows, the business will continue to de-lever quickly over the course of the next six months leaving us well positioned to drive future growth opportunities.”

Alliance expects to announce its interim results for the six months ended 30 June 2019 on 24 September 2019.

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