TIDMAPH
RNS Number : 9041M
Alliance Pharma PLC
17 January 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
For immediate release 17 January 2023
ALLIANCE PHARMA PLC
("Alliance" or the "Group")
Full Year Trading Update
Alliance Pharma plc (AIM: APH), the international healthcare
group, announces its unaudited trading update for the year ended 31
December 2022 ("the Year"), ahead of the expected announcement of
the Group's audited full year results on 21 March 2023.
The Group delivered see-through(1) revenues of GBP172.0m in the
Year (2021: GBP169.6m), in line with the trading update on 23
November 2022 (the "November Trading Update") and up 1% on the
prior year. Adjusting for currency, revenues declined 3%. Excluding
sales from ScarAway(TM) and the US rights to Kelo-cote(TM), both
acquired in March 2022 (the "US Acquisition"), like-for-like(2)
see-through revenues declined 6% at constant exchange rates
("CER").
Kelo-cote revenues grew 2% to GBP50.0m (2021: GBP48.8m) in the
Year, boosted by the US Acquisition and currency gains (-6% CER).
As previously reported in the November Trading Update, a slower
recovery in B2B demand for Kelo-cote in the China cross-border
e-commerce channel, coupled with a one-off destocking effect in
that channel, meant that like-for-like Kelo-cote revenues were down
17% CER.
End-consumer demand in the scar treatment market in e-commerce
in China remains strong, with 18% value growth in the three months
to end October (the latest available data) and Kelo-cote gaining
share in that period. Looking ahead, we expect Kelo-cote revenues
to build throughout the year with overall growth anticipated to be
above 20% in 2023, slightly ahead of the 18% CAGR delivered for the
four year period ending 31 December 2022, excluding the US
Acquisition.
Nizoral(TM) revenues recovered strongly in H2 2022 growing 15%
CER, partly due to the delayed orders from H1 falling into H2 and
as Alliance finalised the remaining marketing authorisation
transfers in China and Vietnam, paving the way for a new
distributor to be appointed in China in June 2022. Consequently
revenues grew 6% to GBP21.8m (2021: GBP20.6m) for the Year (3%
CER). The new Chinese distributor, and the completion of all
marketing authorisation transfers, provides a very strong platform
to drive high single digit revenue growth for Nizoral in 2023,
supported by new marketing initiatives and the introduction of
updated packaging.
In the US, Amberen(TM) generated net revenues of GBP14.9m (2021:
GBP19.2m), 22% below prior year (-30% CER), reflecting tougher
trading conditions in the bricks and mortar category and the loss
of a leading discount store account. Alliance is continuing to
invest in transitioning Amberen towards the higher growth
e-commerce channel and refreshing its marketing campaign and
packaging to accelerate this. Amberen now has an enhanced platform
from which to generate double-digit revenue growth on a
like-for-like basis in 2023 and beyond.
Other consumer brands continued the positive trajectory seen in
H1, delivering revenues for the Year of GBP38.4m (2021: GBP33.2m),
up 16% on the prior year (14% CER), with particularly strong growth
from Aloclair and Vamousse. This solid performance in other
consumer healthcare brands clearly illustrates the benefits of a
diversified portfolio, and we anticipate continued high
single-digit growth in this portfolio of products in 2023,
substantially ahead of the broader consumer healthcare market.
Total Consumer Healthcare revenues for the Year were GBP125.2m
(2021: GBP121.8m), up 3% on the prior year (-3% CER). The Kelo-cote
performance meant that like-for-like total Consumer Healthcare
revenues fell 7% CER. The Prescription Medicines business continues
to deliver stable revenues with GBP46.8m (2021: GBP47.8m), in the
Year, down 2% on the prior year on both a reported and currency
adjusted basis.
Underlying profit before tax is expected to be slightly above
GBP30m, in-line with the November Trading Update. Free cash flow
was GBP15.8m (2021: GBP30.2m) and, following the US Acquisition,
net debt increased to GBP102.0m at 31 December 2022 (31 December
2021: GBP87.0m). Group leverage(3) is expected to be in the range
of 2.5x-2.6x (31 December 2021: 1.7x), below the Group's banking
covenants of 3.0x. Net debt and Group leverage are both expected to
fall during 2023, reflecting the Group's anticipated strong cash
generation, with Group leverage expected to be below 2.0x by the
end of 2023.
Andrew Franklin, Chief Financial Officer of Alliance, commented
:
"Our portfolio continues to provide a robust platform from which
to grow our Consumer Healthcare brands and we are starting to see
the benefits of our investment in innovation and development.
Kelo-cote Kids Gel had a successful launch in China in 2022 and
will be introduced in the UK and Germany this year, whilst Canker-X
(part of the Aloclair brand franchise) was launched in the US this
month and is already being sold through Walgreens and RiteAid.
"2023 has started well for Alliance and we were pleased to
announce last week the appointment of Jeyan Heper as Chief
Operating Officer, starting on 1 February. Whilst there was a
sudden rise in COVID cases in China in December, following the
relaxation of the Zero-COVID policy, the level of infection in
major cities is reducing and normal life is beginning to resume.
Whilst end-market demand for consumer healthcare products in China
has been constrained, available evidence indicates that the
recovery has already commenced and the Board remains confident in
our full year expectations.
"Our free cash flow has remained robust, and is expected to
build strongly throughout 2023, which we anticipate will enable us
to reduce our net debt and leverage over the course of the
year."
(1) See-through revenue includes sales from Nizoral(TM) as if
they had been invoiced by Alliance as principal. For statutory
accounting purposes the product margin relating to Nizoral sales
made on an agency basis is included within Revenue, in line with
IFRS 15. Revenue for 2022 on a statutory reported basis is expected
to be GBP167.4, an increase of 3% on the prior year
(2) Like-for-like revenues exclude ScarAway and US Kelo-cote,
which were acquired in March 2022
(3) Adjusted net debt / enlarged Group EBITDA, calculated using
pro forma EBITDA on a trailing 12-month basis
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(withdrawal) act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under article 17 of MAR.
For further information:
Alliance Pharma plc + 44 (0)1249 466966
Head of Investor Relations: Cora McCallum + 44 (0)1249 705168
ir@allianceph.com
Buchanan + 44 (0)20 7466 5000
Mark Court / Hannah Ratcliff
alliancepharma@buchanan.uk.com
Numis Securities Limited + 44 (0)20 7260 1000
Nominated Adviser: Freddie Barnfield
/ Duncan Monteith
Corporate Broking: James Black
Investec Bank plc + 44 (0) 20 7597 5970
Corporate Broking: Patrick Robb
About Alliance
Alliance Pharma plc (AIM: APH) is an international healthcare
group. Our purpose is to improve the lives of consumers and
patients through making available a range of clinically valuable
healthcare products.
Our core focus is on the marketing of Consumer Healthcare
brands, complemented by a smaller Prescription Medicines business.
In total, we hold marketing rights to around 80 brands, with
revenues generated from a mix of direct, distributor and e-commerce
sales.
Headquartered in the UK, the Group employs around 250 people
based in locations across Europe, North America, and the Asia
Pacific region. By outsourcing our manufacturing and logistics
operations, we remain asset-light and focused on maximising the
value of our brands.
For more information on Alliance, please visit our website:
www.alliancepharmaceuticals.com
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