Alliance Pharma's interim results demonstrate strong underlying sales growth - Proactive Investors UK

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Interim results from Alliance Pharma (LON:APH) showed that the speciality pharmaceuticals firm improved first half sales to £24.4 million from £23.4 million in H1 2010.

Operating profit for the first six months to June 30 was £7.8 million, compared with £9 million in H1 2010, while pre-tax profit was greater at £7 million (H1 2010: £6 million).

The firm said that results for H1 2011 had inevitably been affected by the slowdown in sales of its Deltacortril enteric-coated gastro-resistant tablet that is used for a wide range of disorders; Deltacortril is facing increased competition after Teva launched a rival product product last autumn. But Alliance pointed out that the results show how profits it has enjoyed from Deltacortril during the past two years have been put to good use, with the firm investing in expanding its brand portfolio while also reducing debt.

Dermatology and oncology portfolios are both growing well, Alliance added, which is reflected by underlying sales growth of 29 per cent. 

The firm said that despite market changes affecting Deltacortril 2011 is "still expected to be the second-best year in Alliance's history" since the underlying business continues to grow well.

Meanwhile, Alliance also announced another acquisition today. It has acquired the UK marketing rights to six products from Beacon Pharmaceuticals for £2.4 million.

Alliance is funding the acquisition by drawing a loan from a £20 million revolving credit facility that it arranged in November 2010, bringing the current utilisation of the facility to £5 million.

According to Alliance, for the 12 months to 30 April the six Beacon products it has bought had combined sales of approximately £2 million and a gross profit of £0.9 million, with the bulk of these sales and profit relating to Rizuderm (a treatment for severe acne).

John Dawson, Alliance's chief executive officer, said that the acquisition would be immediately earnings enhancing, while the firm continues to evaluate further acquisition opportunities that will complement Alliance's organic growth.

07 Sep, 2011

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