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Sinclair expands Alliance Pharma's geographical reach

As well as helping lift revenue and profitability, the products acquired from Sinclair Pharma have helped to increase Alliance's geographical reach
September 14, 2016

Alliance Pharma (APH) continues to ride the wave of growth supplied by the major acquisition of the consumer healthcare division of Sinclair Pharma (SPH), completed in December 2015. The 27 ex-Sinclair products contributed £20.6m to the top line and one of these products, Kelo-cote, is now the group's biggest-selling scar treatment brand, generating sales of £4.1m in the period.

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That's not to detract from progress seen in the original Alliance business. The 6 per cent underlying growth was augmented by the other products bought in 2015, including nutritional supplement MacuShield, which generated revenues of £2m. There's also good news for Diclectin, the pregnancy nausea product, currently being registered in the UK. Alliance has recently acquired the licensing rights to the drug in nine more EU countries which, according to chief executive John Dawson, is thanks to the enlarged global footprint brought by the Sinclair acquisition. Now non-UK sales make up approximately 50 per cent of total revenue, up from 19 per cent this time last year.

Impressive reported numbers do mask some disappointments. While Sinclair products "performed as expected", year-on-year figures were actually down. In addition, net debt continues to rise, although this was largely a result of currency movements. These issues haven't worried broker Numis, who has raised forecast numbers after taking into account the extension of Diclectin. Pre-tax profits are now expected at £23.6m for the year to December 2016, giving EPS of 4p (from £11.5m and 3.6p in 2015).

 

ALLIANCE PHARMA (APH)

ORD PRICE:51.8pMARKET VALUE:£243m
TOUCH:51-51.8p12-MONTHHIGH:58pLOW: 41p
DIVIDEND YIELD:2.2%PE RATIO:10
NET ASSET VALUE:35.7p*NET DEBT:47%

Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201522.85.51.650.37
201646.411.72.040.40
% change+103+113+24+10

Ex-div: 22 Dec

Payment: 12 Jan

*Includes intangible assets of £267m, or 57p a share