Alliance Pharma's (APH) flat full-year performance wasn't really so bad given the context of the rapid sales declines of its Deltacortril steroid product and production problems that halted deliveries of fast-growing cancer treatment, ImmuCyst. Overall, management pulled off a successful salvage operation - by holding down distribution costs and buying in new products in the second-half.
Deltacortril's decline had long been expected and relates to rising generic competition which meant sales here dropped to £1.8m from £4.7m. However, when the effects of this, and the ImmuCyst disruption, are stripped-out then the group's underlying revenues grew 13 per cent in the year - reflecting strong growth of its Hydromol dermatology range, where revenue rose 29 per cent to almost £5m. Acquisitions were also important and Alliance Pharma will benefit from the contribution of number of anti-malarial products acquired during the year from AstraZeneca. These, combined, should generate around £1.1m in cash profits, with Alliance's Opus acquisition contributing a further £2m. Chief executive John Dawson said that Alliance would continue its acquisition policy in 2013, with about £13.5m of headroom in its borrowing facilities that can be used to fund potential purchases.
Broker Investec Securities expects adjusted pre-tax profit of £12.7m for 2013, giving adjusted EPS of 3.9p (2012: £11.4m/3.6p).
ALLIANCE PHARMA (APH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 34.6p | MARKET VALUE: | £84.8m | |
| TOUCH: | 34.2-35p | 12-MONTH HIGH: | 35p | LOW: 22p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 21p* | NET DEBT: | 42% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 21.8 | 2.40 | 1.55 | nil |
| 2009 | 31.2 | 5.70 | 2.37 | 0.30 |
| 2010 | 49.8 | 12.8 | 3.96 | 0.57 |
| 2011 | 46.0 | 10.7 | 3.62 | 0.75 |
| 2012 | 44.8 | 10.8 | 3.61 | 0.83 |
| % change | -2 | +1 | -1 | +11 |
Ex-div: 12 Jun Payment: 11 Jul *Includes intangible assets of £80m, or 33p a share | ||||
