www.alliancepharma.co.uk
Alliance Pharma plc is a United Kingdom-based pharmaceutical company. The Company is engaged in the development, marketing and distribution of pharmaceutical products. Its brands include Nu-Seals, Forceval, Hydromol, Deltacortril, Symmetrel, Syntocinon, Naseptin, Syntometrine, Synacthen and Slow-K.
Alliance Pharma should be even stronger in H2, according to Numis analyst Jonathan Kwok
Alliance Pharma’s (LON:APH) record interims will be followed by an even stronger performance in the second half of the financial year, according to Jonathan Kwok of Numis Securities.
The bullish prediction reflects a full six month contribution from Cambridge Labs, which was bought in February for £16.4m, the analyst said.
Earlier Alliance unveiled a 166 per cent jump in pre-tax profits to £7.7 million on the back of 77 per cent rise in sales to £23.4 million.
More importantly for investors, the dividend rises 143 per cent to 0.17p. Numis predicts a 0.5p payout for the full-year, giving a yield of around 1.3 per cent.
Kwok has nudged up his 2010 sales forecast to £50.3 million from £50 million but keeps its year-end pre-tax profit forecast unchanged at £14.2 million.
Alliance is a pharmaceuticals firm with a number of niche brands, including Deltacortril steroid tablets and Nu-Seals, a low dose aspirin product used to prevent the re-occurrence of a heart attack.
Kwok said: “Progress looks on track to be marginally better than our full-year 2010 projection, particularly in the high margin Deltacortril.”
Earlier Alliance chairman Michael Gatenby said, “As we anticipated ... 2010 is proving to be an outstanding year.
"We are delighted to announce yet another set of record results, reflecting a strong performance from the existing business and the benefits of two significant acquisitions.”
Gatenby said the company intends to continue adding brands that fit its growth strategy, and it is well placed to fund further acquisitions, when they find the right deals.
The gross margin was 61 per cent, which is in line with the preceding six-months but up from the 53 per cent reported for the comparative period of 2009.
“In the first half of the year sales have grown strongly, benefiting from the Cambridge Laboratories acquisition in February, an initial first half year contribution from Buccastem and Timodine,” the Alliance chairman said.
“The business is trading very profitably and generating such strong cash flow that net debt has reduced during the first half despite the investment in acquiring Cambridge Laboratories.”
“In uncertain times our non-promoted portfolio, which is largely unaffected by economic conditions, provides a continuing source of stability ... our increasingly substantial portfolio of promoted products has enhanced growth potential.”
“In addition, Alliance is well positioned to take advantage of current market conditions by seeking out further acquisition opportunities”.
Alliance Pharma was founded in 1998, and since then the acquisitive pharmaceutical company has established a strong track record of acquiring the rights to established niche products.
Most recently, the company added 18 new prescription products to its portfolio through the Cambridge Laboratories acquisition in February 2010.
Specifically, through its growth strategy Alliance aims to acquire or license established prescription products in niche areas that are “too small to attract competition, with the majority requiring little or no promotional support”.
Alliance currently owns or licenses over 50 prescription products across a broad range of therapeutic areas – including ‘Anti Infective’, Cardiovascular, Obstetrics & Gynaecology, Toxicology, Oncology, Rheumatology and many others.
