Alliance Pharma Update on Q4 trading

Update on Q4 trading

Alliance Pharma plc (AIM: APH), the international healthcare group, provides the following update on Q4 trading.

The interim results statement on 20 September 2022 indicated that the Company’s expectations for the current financial year included several large distributor orders in Q4, with the timing of these orders dependent on the rate of recovery in those markets.

Whilst the B2C market demand for Kelo-cote in China has been strong, the B2B market demand has recovered more slowly than the Company or its distribution partners anticipated. Sales have also been impacted by a one-off destocking effect. As a result, some of the larger Q4 orders referenced in the interim results statement will not materialise. Overall, the rest of the business continues to trade in-line with the Company’s expectations.

Assuming no change to the underlying operating environment, the Board now anticipates that revenues for the year ending 31 December 2022 will be at least £170m, with underlying profit before tax of at least £30m and free cash flow of at least £15m. This would result in year-end leverage of c.2.5x, comfortably below the Group’s banking covenants of 3.0x.

The Company remains confident that the B2B market for Kelo-cote will recover to pre-pandemic levels during 2023, which, combined with continued strong growth in B2C sales, leaves FY2023 Kelo-cote expectations unchanged.

Further detail regarding FY2022 trading performance and the outlook for FY2023 will be provided in the full year trading update on 17 January 2023.

Andrew Franklin, Chief Financial Officer of Alliance, said:

“Whilst 2022 has presented challenges to Alliance through COVID related lockdowns in China and supply chain disruptions, the underlying business remains robust and the Board remains confident in achieving our medium-term revenue and profit targets.”

For further information:

Alliance Pharma plc

+ 44 (0)1249 466966

Cora McCallum, Head of Investor Relations & Corporate Communications

+ 44 (0)1249 705168

ir@allianceph.com