Alliance Pharma PLC (LON:APH) has said its underlying pre-tax profit for 2020 is expected to be “marginally ahead of market expectations” as its consumer healthcare brands continued to perform strongly despite the impact of the coronavirus (COVID-19) pandemic.
In a trading update for the year to December 31, 2020, the AIM-listed group said its see-through revenues for the year were down 5% at £137.5mln as a result of the pandemic.
One bright spot were revenues for consumer products, which rose 1% to £93mln year-on-year, although this was offset by a 14% decline in prescription medicines to £44.5mln as COVID-19 impacted the delivery of routine treatments.
Despite the revenue decline, Alliance said cash flow in the year “remained very strong” at £34.1mln, up from £29.1mln last year, with second-half cash flows being “significantly stronger” than the first.
The company also highlighted that its acquisition of US healthcare firm Biogix Inc last month for US$110mln “creates scale” for its US business and is expected to be earnings enhancing in 2021 and “significantly earnings enhancing” from 2022.
"The group continued to deliver a robust operational and financial performance in the second half of 2020, despite the ongoing challenges of the pandemic. Whilst top-line revenue growth has been constrained overall, our consumer healthcare business has performed well given the market backdrop and we have seen some strong performances from a number of our brands, in particular Kelo-cote. Our free cash flow has remained very strong, enabling us to pay down more of our debt ahead of completing the Biogix acquisition close to the end of the year”, Alliance chief executive Peter Butterfield said in a statement.
"We're particularly pleased that we managed to complete such a large and strategically significant acquisition at the end of 2020, in addition to maintaining the performance of the base business as we navigated our way through the challenges of COVID-19. As we progress into 2021, we look forward to regaining the strong momentum and revenue growth of recent years, and to benefiting from the additional growth opportunities that Amberen brings into the group", he added.
The company’s shares jumped 2.4% to 89.3p in early deals on Wednesday.