It's been a while since we took a look at the numbers at Aim-traded Alliance Pharma (APH), but a recent surge in the share price has put the group firmly back in investors' minds. Aside from a short, if bullish, trading update in July, there is little concrete information to explain the recent momentum. "Historically we've had a couple of issues," admits chief executive John Dawson, "and the share price was treading water as a result." Now, however, Mr Dawson believes there's general confidence in the group and investors are "making up for lost time".
By way of a refresher, Alliance is not a research and development group. It simply sells drugs that have already been licensed and have an established foothold on the market. It was recently forced to terminate a 14-year long distribution agreement with Novartis (CH: NOVN), but rising sales of dermatology range Hydromol and recently acquired eye-care product MacuShield more than offset this.
As the business grows, Alliance is also investing more in building its stock, and improving its supply chain management. This expenditure tempered gross margin growth in the first half, but Mr Dawson said the issue should be resolved come 2016.
Analysts at Numis Securities expect pre-tax profit of £11.2m this year, giving EPS of 3.3p, compared with £10.8m and 3.4p in 2014.
| ALLIANCE PHARMA (APH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 57p | MARKET VALUE: | £150m | |
| TOUCH: | 56-58p | 12-MONTH HIGH: | 61p | LOW: 32p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 28p* | NET DEBT: | 36% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 21.4 | 5.4 | 1.68 | 0.333 |
| 2015 | 22.8 | 5.5 | 1.65 | 0.366 |
| % change | +6 | +1 | -2 | +10 |
Ex-div: 20 Dec Payment: 14 Jan *Includes intangible assets of £101m, or 38p a share | ||||
