Alliance Pharma’s (APH) results for 2019 landed in line with analysts’ expectations. But, as is rapidly becoming standard practice, management has suspended dividend payments due to the coronavirus pandemic.
The group highlighted its strong cost controls and covenant headroom – both of which should give it some flexibility in the months ahead. And it added that although supply is holding up well “demand is harder to forecast”. For now, Alliance expects trading in 2020 to be second-half weighted.
Alliance’s portfolio of ‘international star’ brands performed strongly last year, offering up collective revenue growth of 43 per cent. That included anti-dandruff shampoo Nizoral, which the group acquired in June 2018. On an underlying basis, growth was 30 per cent.
That said, in the UK and Republic of Ireland, revenues slipped by 2 per cent to £51.4m – with weaker trading in some of the group’s heritage pharma products partly mitigated by better performances from its consumer products, such as mouth-ulcer treatment Aloclair.
In any case, overall gross profits increased by 19 per cent to £68.1m, and the group achieved some operational leverage – with underlying cash profits up by more than a fifth to £39.4m.
Broker Numis expects adjusted EPS of 4.8p for 2020, down 15 per cent from its previous estimate. Of course, forecasts may well change again.
| ALLIANCE PHARMA (AHP) | ||||
| ORD PRICE: | 72.5p | MARKET VALUE: | £ 384m | |
| TOUCH: | 71.8-72.5p | 12-MONTH HIGH: | 57p | LOW: 89p |
| DIVIDEND YIELD: | nil | PE RATIO: | 15 | |
| NET ASSET VALUE: | 52p* | NET DEBT: | 22% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 48.3 | 15.2 | 4.7 | 1.1 |
| 2016 | 97.5 | 22.2 | 3.9 | 1.2 |
| 2017 | 102 | 28.3 | 6.1 | 1.3 |
| 2018 | 118 | 22.8 | 3.7 | 1.5 |
| 2019 | 136 | 31.1 | 4.8 | nil |
| % change | +15 | +36 | +30 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £329m or 62p a share | ||||
