Interim results for the six months ended 30 June 2020 Strong performance from Consumer Healthcare brands; cash generation remains robust; full year results tracking in line with market expectations

Alliance Pharma plc (AIM: APH), the international healthcare group, is pleased to announce its interim results for the six months ended 30 June 2020.

OVERVIEW

The Group delivered a robust operational and financial performance in the first half of 2020, despite the challenges posed by COVID-19.

• Strong performance from Consumer Healthcare brands, with Kelo-cote™ revenues up 8% and see-through revenues down 3% overall
• Prescription Medicine revenues down 15%, reflecting delays in routine treatments as a result of COVID-19
• See-through revenue in total down 7% ( -7% CCY*) to £65.3m
• Good control of operating expenditure resulting in a resilient underlying EBITDA* performance down 4% to £18.1m (H1 2019: £18.8m)
• Underlying profit before tax up 7% to £16.3m (H1 2019: £15.2m); reported profit before tax down 96% to £0.6m (H1 2019: £15.2m), due to non-cash impairment and amortisation charges
• Free cash flow robust at £10.5m, with continued reduction in leverage to 1.34 times from 1.48 times at December 2019
• New line extension for Nizoral™ launched in China in July 2020; majority of Nizoral licence transfers on track to be completed by the end of the year
• Product portfolio reclassified into Consumer Healthcare brands and Prescription Medicines, in recognition of the different characteristics of these product types
• Interim dividend payment of 0.536p announced

FINANCIAL SUMMARY

* The performance of the Group is assessed using Alternative Performance Measures (“APMs”), which are measures that are not defined under IFRS, but are used by management to monitor ongoing business performance against both shorter term budgets and forecasts and against the Group’s longer term strategic plans. APMs are defined in note 17.

Specifically, see-through revenue includes sales from Nizoral™ as if they had been invoiced by Alliance. Under the terms of the transitional services agreement with Johnson & Johnson (J&J), Alliance receives the benefit of the net profit on sales of Nizoral from the date of acquisition up until the product licences in each of the Asia-Pacific territories transfer from J&J to Alliance. For statutory accounting purposes the product margin on Nizoral sales is included within Revenue, in line with IFRS 15.

Commenting on the interim results, Peter Butterfield, Chief Executive Officer of Alliance, said:

“Whilst first half revenues have, as expected, been impacted by COVID-19, the speed with which we transitioned the business to operating remotely, coupled with associated reductions in discretionary spend, have enabled us to deliver continued profitability in these unprecedented times.

“We are now starting to see further signs of recovery and expect trading to continue to recover as we move through the remainder of the year. Our robust cash generation and diverse and resilient product portfolio leave us well placed to resume our growth trajectory, as the markets for our products recover.

“Good progress continues to be made in bringing the Nizoral business fully under our control, together with the launch of our first line extension in China in July. We expect the majority of the product licence transfers to have been completed by the end of this year, which will enable us to start executing our marketing strategy for the brand.

“We continue to actively review acquisition opportunities, particularly for consumer healthcare brands in regions where we already have a presence, to further enhance our growth.”

CONFERENCE CALL & WEBCAST

A conference call for analysts will be held at 10.30am on 22 September 2020; analysts who require dial-in details, please contact Buchanan at alliancepharma@buchanan.uk.com.

A recorded webcast of the analyst conference call, including investor presentation slides, will be made available during the afternoon of 22 September 2020 at this link:

https://buchanan.enablecloud.co.uk/index.php?entryPoint=campaign_trackerv2&track=8f156f52-fc97-11ea-ac59-18a905591bc2&identifier=81016248-fc99-11ea-8d30-001a4bbe9414

The recorded webcast will also be made available at the investor section of Alliance’s website, https://buchanan.enablecloud.co.uk/index.php?entryPoint=campaign_trackerv2&track=8f1652a0-fc97-11ea-81cf-18a905591bc2&identifier=81016248-fc99-11ea-8d30-001a4bbe9414.

For more information, please contact Buchanan on 020 7466 5000 or email alliancepharma@buchanan.uk.com.