Shares in prescription and consumer products company Alliance Pharma (APH:AIM) gained 3% to 87.4p after delivering better than expected full-year growth in pre-tax profit, up 2% to £33.5 million despite Covid-19 headwinds last year.
Full-year revenues to 31 December fell 5% to £137.5 million as already reported with the consumer product portfolio, representing two-thirds of sales up 1% while prescription medicines suffered from restrictions to healthcare services, falling 14%.
STRONG GROWTH IN KEY BRANDS
Scar treatment and prevention product Kelo-cote saw revenues grow 12% to £34.7 million due to strong demand from China from the second quarter onwards as lockdown restrictions were eased.
Medicated anti-dandruff shampoo product Nizoral also saw resilient demand in China with the brand generating 4% growth to £21 million.
The company continued the transition towards consumer health with the acquisition of Amberen in December 2020, which added a leading US Menopausal relief product to the portfolio.
Numis commented, ‘Alliance's brands are typically #1 or #2 in their respective markets, supported by strong science and clinical data with excellent safety.
‘These features offer durable, long-term growth through market share gains, as well as plenty of opportunities to expand certain brands into new geographic markets.’
RECORD CASH FLOW
Favourable working capital movements and strong second half growth in cash flow resulted in the business delivering record free cash flow of £34.1 million.
After funding the $110 million acquisition of Amberen, net debt at the year-end was 2.43 times earnings before interest, taxes, depreciation, and amortisation, comfortably within the three times banking limit.
In the absence of further acquisitions, the company expects leverage to fall back to below two times by the end of 2021.
The board has proposed a final dividend of 1.074 pence per share, taking the full-year payment to 1.61 pence per share.
