TIDMAPH
RNS Number : 3767M
Alliance Pharma PLC
21 September 2021
For immediate release 21 September 2021
ALLIANCE PHARMA PLC
("Alliance" or the "Group")
Interim results for the six months ended 30 June 2021
Strong growth from Consumer Healthcare brands and integration of
Amberen complete
Full year outlook in line with market expectations
Alliance Pharma plc (AIM: APH), the international healthcare
group, announces its interim results for the six months ended 30
June 2021 (the "Period").
HIGHLIGHTS
-- The Group traded strongly in the Period with an excellent
performance from Kelo-cote(TM), an uplift in revenue from
Prescription Medicines and a significant contribution from recently
acquired Amberen(TM)
-- See-through revenue in total up 24% (+28% on a constant
currency basis ("CCY")) to GBP80.9m; like-for-like ("LFL")
see-through revenue, which excludes Amberen, up 9% (+12% CCY);
statutory revenue up 27% to GBP78.6m (H1 2020 GBP61.7m)
o Strong performance from Consumer Healthcare brands, with
see-through revenue up 30% overall (+35% CCY)
-- Kelo-cote revenue up 54% (+62% CCY)
-- LFL Consumer Healthcare revenue up 8% (+12% CCY)
o Prescription Medicines revenue up 12% (+12% CCY)
-- Underlying gross margin up 4.7 % to 63.8% of see-through
revenue (H1 2020: 59.1%), reflecting favourable changes in product
mix; statutory gross margin up 3.1% to 65.6% (H1 2020: 62.5%)
-- Underlying profit before tax up 24% to GBP20.1m (H1 2020:
GBP16.3m); reported profit before tax GBP16.5m (H1 2020:
GBP0.6m)
-- Free cash flow GBP6.5m (H1 2020: GBP10.5m), reflecting the
expected reversal of favourable working capital movements in Q4
2020 and the timing of sales within the Period
-- Leverage reduced to 2.21 times from 2.43 times at December
2020 and expected to fall below 2.0 times by the end of the
year
-- Amberen integration complete and trading in line with management expectations
-- Interim dividend payment of 0.563p, up 5% (interim dividend 2020: 0.536p)
REVENUE SUMMARY
Unaudited six months ended H1 2021 H1 2020 Growth CCY growth
30 June GBPm GBPm
Kelo-cote 21.9 14.2 +54% +62%
------------------------------------ -------- -------- ------- -----------
Amberen 9.5 - - -
------------------------------------ -------- -------- ------- -----------
Nizoral* 9.0 9.8 -8% -7%
------------------------------------ -------- -------- ------- -----------
Other consumer brands 16.4 19.8 -17%
------------------------------------ -------- -------- ------- -----------
Consumer Healthcare 56.8 43.8 +30% +35%
------------------------------------ -------- -------- ------- -----------
Prescription Medicines 24.1 21.5 +12% +12%
------------------------------------ -------- -------- ------- -----------
See-through revenue* 80.9 65.3 +24% +28%
------------------------------------ -------- -------- ------- -----------
LFL Consumer Healthcare revenue,
excluding Amberen 47.3 43.8 +8% +12%
------------------------------------ -------- -------- ------- -----------
LFL see-through revenue, excluding
Amberen 71.4 65.3 +9% +12%
------------------------------------ -------- -------- ------- -----------
FINANCIAL SUMMARY
Unaudited six months ended H1 2021 H1 2020 Growth
30 June GBPm GBPm
See-through Revenue* 80.9 65.3 +24%
----------------------------------- -------- ---------- -------
Statutory Revenue 78.6 61.7 +27%
----------------------------------- -------- ---------- -------
Gross profit 51.6 38.6 +34%
----------------------------------- -------- ---------- -------
Underlying EBITDA* 22.8 18.1 +26%
----------------------------------- -------- ---------- -------
Underlying profit before taxation 20.1 16.3 +24%
----------------------------------- -------- ---------- -------
Reported profit before taxation 16.5 0.6
----------------------------------- -------- ---------- -------
Underlying basic earnings per
share 2.99p 2.45p +22%
----------------------------------- -------- ---------- -------
Reported basic earnings per
share 1.54p (0.33)p
----------------------------------- -------- ---------- -------
Free cash flow* 6.5 10.5 -38%
----------------------------------- -------- ---------- -------
Leverage 2.21x 2.43x (31
Dec)
----------------------------------- -------- ---------- -------
Net debt* 105.4 109.4 (31
Dec)
----------------------------------- -------- ---------- -------
Interim dividend per share 0.563p 0.536p +5%
----------------------------------- -------- ---------- -------
* 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(TM) 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 :
"The Group has delivered another strong performance in the first
half of 2021, with the uplift in revenue from our enlarged Consumer
Healthcare business flowing through to pre-tax profits. We expect
this core part of our business to continue to grow strongly during
the remainder of the year, led by Kelo-cote and Amberen.
"We were very pleased with the first half performance from
Amberen, which was acquired in December 2020 and has traded in line
with our expectations. With the integration of the brand into our
US-based operations now complete, we can focus on maximising the
value of this key brand.
"Trading for the remainder of the financial year remains in line
with market expectations. We expect the combination of positive
trading and working capital movements to result in Group leverage
falling below 2.0x by the end of the year."
WEBCAST & ANALYST Q&A CALL
A pre-recorded presentation of the half year results, by Peter
Butterfield, Chief Executive Officer, and Andrew Franklin, Chief
Financial Officer, will be available at 7.05am today at the
investor section of Alliance's website,
https://www.alliancepharmaceuticals.com/investors/
and at
https://webcasting.buchanan.uk.com/broadcast/6127786112f0cb436ea67ef8
A Q&A call for analysts will be held at 10.00am today;
analysts who require joining details should contact Buchanan at
alliancepharma@buchanan.uk.com .
For further information:
Alliance Pharma plc + 44 (0)1249 466966
Peter Butterfield, Chief Executive
Officer
Andrew Franklin, Chief Financial Officer
www.alliancepharma.co.uk
Buchanan + 44 (0)20 7466 5000
Mark Court / Sophie Wills / Hannah
Ratcliff
Numis Securities Limited + 44 (0)20 7260 1000
Nominated Adviser: Freddie Barnfield
/ Duncan Monteith
Corporate Broking: James Black
Investec Bank plc + 44 (0) 20 7597 5970
Corporate Finance: Daniel Adams
Corporate Broking: Patrick Robb
About Alliance
Alliance Pharma plc (AIM: APH) is an international healthcare
group. Our purpose is to improve the lives of consumers and
patients through making available a range of clinically valuable
healthcare products.
Our core focus is on the marketing of Consumer Healthcare
brands, complemented by a smaller Prescription Medicines business.
In total, we hold marketing rights to around 80 brands, with
revenues generated from a mix of direct, distributor and e-commerce
sales.
Headquartered in the UK, the Group employs around 250 people
based in locations across Europe, North America, and the Asia
Pacific region. By outsourcing our manufacturing and logistics
operations, we remain asset-light and focused on maximising the
value of our brands.
More information on Alliance can be found on our website:
www.alliancepharmaceuticals.com
CHIEF EXECUTIVE'S STATEMENT
Trading performance
Overview
The Group delivered another strong performance in the Period,
with see-through revenue up 24% to GBP80.9m (H1 2020: GBP65.3m),
despite the impact of currency headwinds and continuing lockdowns,
particularly in the APAC region; on a constant currency basis,
revenue was up 28%. Like-for-like revenue, excluding Amberen, which
was acquired by the Group at the end of 2020, was up 9% (up 12% on
a constant currency basis).
Gross profit increased by 34% to GBP51.6m (H1 2020: GBP38.6m),
the increase outstripping revenue growth due to favourable changes
in product mix. This was balanced by an increase in operational
costs, primarily reflecting the inclusion of the Amberen cost base.
Coupled with small increases in depreciation charges and financing
costs, underlying profit before tax increased 24% to GBP20.1m (H1
2020: GBP16.3m), with the profit before tax margin being maintained
at 25%.
Consumer Healthcare performance
Overall, see-through revenue across our Consumer Healthcare
brands increased by 30% in the Period to GBP56.8m (H1 2020:
GBP43.8m) and by 35% on a constant currency basis. On a
like-for-like basis, excluding Amberen, see-through revenue
increased by 8% (12% CCY).
Our leading brands generally performed well during the Period,
with a particularly strong performance from Kelo-cote and an
encouraging start by Amberen since acquisition in December
2020.
Kelo-cote - scar prevention and treatment
Kelo-cote growth accelerated strongly in the Period, with sales
up 54% to GBP21.9m (H1 2020: GBP14.2m), notwithstanding the impact
of adverse currency movements. On a constant currency basis, sales
were up 62% due to continued strong demand from China, reflected
both in the growth of domestic sales and in significant growth in
cross-border e-commerce ("CBEC") sales.
Kelo-cote is very well established in China, with high brand
awareness and usage. The growth in domestic and CBEC sales reflects
the increasing trend for consumers in China and elsewhere to buy
more of the brand, and healthcare products generally, online. This
trend has been accelerated by the global pandemic.
In recognition of the success of CBEC in facilitating export
sales from the EU to consumers in China, and the significant
opportunity China offers as a growth driver for this key brand, we
have recently entered into a new CBEC distribution agreement for
Kelo-cote, which gets us closer to the customer and gives us
further control of our distribution chain. We expect this to
further accelerate top-line growth in this key market in the medium
term.
Performance across the rest of APAC, South America and EMEA was
more mixed, primarily due to the continuing impacts of the global
pandemic, and the timing of distributor orders. Sales to a number
of APAC countries, including Hong Kong and South Korea, benefited
from a post-COVID-19 recovery, whilst distributor order phasing
benefited sales to South America notwithstanding the resurgence of
the pandemic negatively impacting in-market demand. In EMEA, strong
performances from a number of European territories including France
(domestic and export sales) and the UK were partially offset by
distributor order phasing adversely affecting sales to the Middle
East and Africa.
Amberen - vitamin mineral supplement for the relief of menopause
symptoms (US)
Amberen made an encouraging start during its first period of
trading under the Group's ownership, generating sales of GBP9.5m,
up 10% on a constant currency basis versus sales for the last six
months under its previous ownership and in line with management's
expectations.
Growth from the Perimenopause product, launched in June 2020,
has been particularly encouraging with the product now having a 7%
market share, double that at acquisition. Just 12 months after
launch, it is now the fifth largest SKU in the category by
value.
Full year sales expectations continue to be weighted towards the
second half, reflecting an increased focus on media investment and
online marketing.
Nizoral - medicated anti-dandruff shampoo
Nizoral see-through sales were 8% lower than for the prior
period, at GBP9.0m (H1 2020: GBP9.8m), 7% lower on a constant
currency basis, due to a combination of distributor order phasing,
manufacturing delays, and the ongoing impacts of COVID-19 on
demand, particularly in India, and on the processing of regulatory
approvals in Vietnam and the Philippines.
We are now starting to roll out our strategic brand plan for
Nizoral, with consumer activation underway in South Korea,
Australia, Taiwan and the Philippines as part of a growth strategy
centred around consumer and healthcare professional activation,
e-commerce, and innovation and development.
Excellence in execution will be key to realising the growth
opportunities for the brand across the 14 culturally diverse
markets in the APAC region in which it is sold, and particularly in
China, which is currently the brand's largest market and one that
represents a significant growth opportunity for Nizoral.
Other Consumer Healthcare brands
Performance across our other Consumer Healthcare brands was
mixed, particularly for those products sold principally through
international distributors . We saw a strong performance from
MacuShield (eye health supplement), with first half sales up 54% on
those for the prior period at GBP4.4m (H1 2020: GBP2.8m),
reflecting the recovery of UK retail sales adversely affected in
the first half of 2020 by COVID-19 and the normalisation of
distributor stocking post Brexit. However, other brands, including
Vamousse, Aloclair and Oxyplastine, continued to be adversely
affected by COVID-19 and the knock-on impact of the pandemic on
distributor stocking and order phasing.
Vamousse ( prevention and treatment of head lice ) sales were
down 28% (-22% CCY) versus the prior period at GBP2.3m (H1 2020:
GBP3.2m), reflecting ongoing trading challenges due to COVID-19,
with the incidence of head lice, and hence the demand for treatment
and prevention products, continuing to be suppressed by school
closures, particularly in the US, the product's primary market.
That said, the head lice category in the US is now starting to show
month-on-month growth and Vamousse continues to track ahead of
category performance, having gained 1.6 percentage points of market
share over the 52 weeks to 19 June 2021.
Aloclair ( treatment for mouth ulcers ) saw sales fall by 40% in
the Period to GBP2.7m (H1 2020: GBP4.6m), as distributors continued
to respond to changes in local trading conditions as a result of
COVID-19. As lockdowns ease, we would expect demand to normalise
.
Sales of Oxyplastine (treatment for skin irritations, including
nappy rash) fell by 58% to GBP0.9m in the Period (H1 2020:
GBP2.2m), due to import restrictions and COVID-19 related impacts
on distributor sales to Algeria, historically the brand's largest
market. Both Oxyplastine and Aloclair tend to generate relatively
low margins, thereby limiting the impact of the reduction in
revenues at the gross margin level.
Prescription Medicines performance
Sales from our Prescription Medicines portfolio increased by 12%
in the Period to GBP24.1m (H1 2020: GBP21.5m), reflecting a partial
return to the delivery of routine treatments and normalisation of
daily life compared with the early stages of the pandemic.
We continue to actively manage this part of our portfolio,
periodically discontinuing or disposing of smaller products that
deliver very low sales and margins. However, the cash generation
from these assets remains good and, coupled with their limited
requirement for promotional investment, they will continue to play
an important part in our overall product portfolio.
Regional performance
EMEA
Across the EMEA region as a whole, first half sales were up 11%
versus those for the prior period at GBP49.9m (H1 2020:
GBP44.8m).
This was primarily due to the uplift in Prescription Medicines
sales, with this region accounting for 95% of all Prescription
Medicines sales in the Period, coupled with a significant uplift in
CBEC sales of Kelo-cote from the EU to China, and the uplift in
MacuShield sales, which originate primarily in EMEA (the largest
market is the UK).
APAC
See-through sales across the APAC region as a whole were up 6%
versus the prior period at GBP17.9m (H1 2020: GBP16.9m),
notwithstanding the continuing impacts of local lockdowns across
much of this region.
APAC is primarily a Consumer Healthcare region, with consumer
products accounting for approximately 95% of total see-through
sales in the region. The dominant brands are Kelo-cote and Nizoral
(which is only sold by Alliance in APAC), which collectively
account for almost 90% of the region's see-through sales.
The uplift in sales reflects growth in Kelo-cote sales, both in
China and across the wider APAC region, coupled with a slight
decline in Nizoral sales, primarily due to distributor order
phasing.
AMER
Sales in the AMER region increased by GBP9.4m to GBP13.0m (H1
2020: GBP3.6m), reflecting the acquisition of Amberen, which
contributed GBP9.5m to sales in the Period. On a like-for-like
basis, sales were marginally down on the prior period at GBP3.5m,
with the decline in Vamousse sales in the US being largely offset
by increased sales of Kelo-cote to South America, and increased
Aloclair sales. This region now accounts for just under a quarter
of our Consumer Healthcare revenue.
Current trading and outlook
The second half of the year has started well, and we remain
confident in our ability to meet market expectations in terms of
revenue, underlying profits and net debt.
We now have a significant new opportunity to drive further
growth for Kelo-cote through our CBEC business and to start to
realise the growth potential in Nizoral through 2022 and
beyond.
Amberen has got off to an encouraging start, and we remain
confident in our ability to leverage the growth potential in this
key brand going forward.
With the integration of Amberen now complete, we continue to
look for opportunities to selectively add to our Consumer
Healthcare portfolio, leveraging the platform we have built across
EMEA, APAC and, more recently, the US.
Operational developments
Group infrastructure, systems and processes
Our new Innovation & Development process is now fully up and
running, increasing our ability to extend the reach of our larger
consumer brands through brand extensions (new formulations,
targeting related sub-sectors, or new presentations) in addition to
refreshing existing products to maintain consumer appeal.
We have also started to roll out our new Digital Excellence
training programme to our global marketing teams, to ensure our
staff have the necessary skills and knowledge in this area to drive
sustainable long- term value.
Our ERP system has now gone live and is already starting to
deliver business benefits through the standardisation of processes,
with the high level of preparation undertaken pre-go-live ensuring
a virtually seamless changeover. Work continues on refining some of
the reporting requirements and rolling the system out to a few
remaining smaller entities.
We have recently completed further substantial upgrading and
refurbishment works at our UK headquarters, improving the
building's environmental credentials whilst also reconfiguring
space to better accommodate post-pandemic working arrangements. We
have recently secured new, larger offices in Cary, North Carolina,
to accommodate our growing US team.
Amberen integration
Operationally, integration of Amberen into the business is now
complete. A number of new hires have recently been made in the US
to strengthen our operating capabilities to better support Amberen
and Vamousse and also to enhance our ability to scale up as and
when a suitable US acquisition opportunity arises.
Ways of working
At the start of July, we rolled out a new hybrid working model
for our employees around the globe to enable them to balance home
working with a return to the office. We will continue to refine
this during the remainder of the year, as our understanding of what
works best, both for our employees and for the business,
increases.
Building a sustainable business
We have continued to work on developing our sustainable business
strategy in the Period, under the direction of the ESG Board
Committee, revisiting our materiality assessment, carrying out an
external ESG gap analysis and engaging with many of our key
investors in order to develop a Balanced Scorecard for the business
and inform future areas of focus. More detail can be found in the
accompanying results presentation.
Board changes
As previously announced, Kristof Neirynck, a highly experienced
consumer brands executive, will be joining the Group on 1 December
2021 as an independent Non-Executive Director. Kristof brings
almost 20 years of international consumer brand experience
including complex omni-channel business models, direct-to-consumer
strategies and CBEC sales into China to the Group. His experience
will be invaluable as we look to further develop and grow our
business, in particular our CBEC activities, over the coming
years.
Peter Butterfield
Chief Executive Officer
21 September 2021
FINANCIAL REVIEW
Summary underlying income statement
Unaudited six months ended 30 June H1 2021 H1 2020 Growth
GBPm GBPm
See-through Revenue* 80.9 65.3 +24%
------------------------------------- -------- -------- -------
Statutory Revenue 78.6 61.7 +27%
------------------------------------- -------- -------- -------
Gross profit 51.6 38.6 +34%
------------------------------------- -------- -------- -------
Operating expenses (including IFRS
2 share options charge) (28.8) (20.5) +41%
------------------------------------- -------- -------- -------
Underlying EBITDA* 22.8 18.1 +26%
------------------------------------- -------- -------- -------
Depreciation (1.1) (0.8) +32%
------------------------------------- -------- -------- -------
Underlying EBIT* 21.7 17.2 +26%
------------------------------------- -------- -------- -------
Finance costs (1.6) (1.0) +58%
------------------------------------- -------- -------- -------
Underlying profit before taxation 20.1 16.3 +24%
------------------------------------- -------- -------- -------
Reported profit before taxation 16.5 0.6
------------------------------------- -------- -------- -------
Underlying basic earnings per share 2.99p 2.45p +22%
------------------------------------- -------- -------- -------
Reported basic earnings per share 1.54p (0.33)p
------------------------------------- -------- -------- -------
Interim dividend per share 0.563p 0.536p +5%
------------------------------------- -------- -------- -------
* 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(TM) 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 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.
Underlying profitability metrics are presented as we believe
this provides investors with useful information about the
performance of the business. For 2021, underlying results exclude
the amortisation of intangible assets; for 2020, underlying results
exclude the amortisation and impairment of intangible assets.
Further detail can be found in note 6.
The Group delivered a strong financial performance in the
Period, with see-through revenue increasing 24% to GBP80.9m (H1
2020: GBP65.3m) and statutory revenue increasing 27% to GBP78.6m
(H1 2020: GBP61.7m). Like-for-like revenue excluding Amberen
increased by 9%. Whilst operating expenses increased, due mainly to
the inclusion of the Amberen cost base coupled with small increases
in depreciation and finance costs, underlying profit before tax as
a percentage of sales was maintained with underlying profit before
tax increasing 24% to GBP20.1m (H1 2020: GBP16.3m).
Group revenue was adversely impacted by exchange rate movements,
principally the strengthening of Sterling against the US Dollar,
which depressed see-through revenue by approximately GBP2.4m. On a
constant currency basis, see-through revenue increased 28% overall
and 12% on a like-for-like basis.
Gross profit increased by a larger percentage than sales at 34%
to GBP51.6m (H1 2020: GBP38.6m), with gross margin increasing from
59.1% to 63.8% of see-through revenue, reflecting favourable
changes in product mix. Gross margin relative to statutory revenue
was 65.6% (H1 2020: 62.5%).
Operating costs (defined as underlying administration and
marketing expenses, excluding depreciation charges) were up by
GBP7.4m versus the prior Period at GBP27.3m (H1 2020: GBP19.9m) due
primarily to the inclusion of the Amberen cost base, coupled with
the resumption of discretionary spend deferred or cancelled in H1
2020 in response to the global pandemic and increased levels of
investment in the business more generally. As a result, operating
costs as a percentage of sales increased 3.4% to 33.9% of
see-through sales (H1 2020: 30.5%).
The IFRS 2 share options charge for the Period was GBP1.5m, up
GBP0.9m versus that for the prior period (H1 2020: GBP0.6m).
Net of the increase in operating costs and the share options
charge, underlying earnings before interest, taxes, depreciation
and amortisation (EBITDA) increased 26% in the Period to GBP22.8m
(H1 2020: GBP18.1m), whilst underlying operating profit increased
by a similar percentage to GBP21.7m (H1 2020: GBP17.2m) and
reported operating profit increased by GBP16.5m to GBP18.1m (H1
2020: GBP1.6m).
Depreciation
Depreciation charges for the Period were GBP1.1m, up GBP0.3m on
the prior period (H1 2020: GBP0.8m).
Finance costs
Finance costs were up by GBP0.6m compared with the prior period
at GBP1.6m (H1 2020: GBP1.0m), GBP0.3m of which related to an
increase in borrowing costs, reflecting the higher level of
borrowings following the Amberen acquisition and the remainder
relating primarily to lower net gains on currency movements in the
Period of GBP0.2m (H1 2020: GBP0.6m).
The average interest charge on gross debt during the Period
(including non-utilisation fees) was 2.04% (H1 2020: 2.78%).
Non-underlying items
Non-underlying items in the Period comprise amortisation charges
for Prescription Medicines and certain other brand assets; for the
prior period, non-underlying items comprise amortisation charges
and impairment charges.
Reconciliation of underlying to reported profit before tax
Unaudited six months ended 30 June H1 2021 H1 2020
GBPm GBPm
Underlying profit before taxation 20.1 16.3
--------------------------------------- -------- --------
Non-underlying items:
--------------------------------------- -------- --------
Amortisation of intangible assets (3.6) (3.6)
--------------------------------------- -------- --------
Impairment of intangible assets and
goodwill - (12.1)
--------------------------------------- -------- --------
Total (3.6) (15.6)
--------------------------------------- -------- --------
Reported profit before taxation 16.5 0.6
--------------------------------------- -------- --------
Taxation
The underlying tax charge for the Period was GBP4.1m (H1 2020:
GBP3.3m), which equates to an effective tax rate of 20.5% (H1 2020:
20.0%). The total tax charge for the Period was GBP8.3m (H1 2020:
GBP2.4m) and includes a GBP5.1m charge following the decision to
increase the UK tax rate from 19% to 25% (this charge relates
primarily to an increase in the deferred tax balances on intangible
assets) partially offset by a tax credit on non-qualifying
amortisation of GBP0.9m.
Earnings per share
Underlying basic earnings per share, the measure used by the
Board in assessing earnings performance, was 2.99p, an increase of
22% on the prior period (H1 2020: 2.45p), reflecting the increase
in the Group's underlying profit after tax coupled with a modest
increase in the number of shares in issue.
Reported basic earnings per share increased by 1.87p to 1.54p
(H1 2020: (0.33p)) due to the impact of non-underlying items on
reported earnings in the Period versus the prior period.
Dividend
The Board is pleased to announce that it is declaring an interim
dividend payment of 0.563p per share for 2021, an increase of 5% on
the 0.536p interim dividend for 2020. The Board will continue to
assess the level of future cash distributions having regard to
overall business performance and future outlook.
The interim dividend for 2021 will be paid on 7 January 2022, to
shareholders on the register on 24 December 2021.
Balance sheet
Intangible assets reduced by GBP5.7m in the Period to GBP407.2m
(31 December 2020: GBP412.9m), reflecting amortisation charges of
GBP3.6m together with GBP1.9m due to exchange rate movements and a
GBP0.2m true-up for working capital relating to the Amberen
acquisition.
Further detail is provided in note 10.
Working capital
Net working capital at 30 June 2021 was GBP27.7m, an increase of
GBP8.4m on that at the start of the Period (31 December 2020:
GBP19.3m), reflecting an expected increase in receivables as a
result of sales timings.
Inventories, net of provisions, amounted to GBP23.2m at 30 June
2021 (31 December 2020: GBP22.9m), the minimal movement reflecting
our decision to maintain the higher levels of finished goods
inventory, raw materials and componentry built up during 2020 in
order to mitigate against any disruption to our supply chain
following the UK's departure from the EU.
As noted above, receivables increased by GBP8.5m, reflecting the
timing of sales, with second quarter 2021 sales being weighted
towards the end of the quarter, versus fourth quarter 2020 sales,
which were weighted towards the start of the quarter. We expect
receivables to reduce by the end of the year, based on expected
sales timings. There was minimal movement in payables, which
increased by GBP0.4m.
Cash flow and net debt
Free cash flow for the Period was GBP6.5m (H1 2020: GBP10.5m),
the reduction reflecting the expected reversal of the favourable
working capital movements in the fourth quarter of 2020 and the
timing of sales within the Period. Net debt reduced by GBP4.0m to
GBP105.4m as at 30 June 2021 and Group leverage reduced to 2.21
times at the end of June (31 December 2020: 2.43 times). We
continue to expect leverage to fall below 2.0 times by the end of
the year.
Treasury and capital management
The Group's operations are financed by retained earnings and
bank borrowings, with additional equity being raised on a periodic
basis to part-fund larger acquisitions. Borrowings are denominated
in Sterling, Euro and US Dollars.
Group risk management policy is to hedge up to 75% of estimated
future foreign currency EBITDA exposure, for up to the next 18
months at any point in time. The Group uses forward foreign
exchange contracts to implement this policy which are generally
designated as cash flow hedges.
The Group benefits from a GBP165m Revolving Credit Facility
(RCF) and a GBP50m Accordion Facility, expiring in July 2024. This
facility provides flexibility for the Group to pursue its
acquisition strategy over the next couple of years to complement
future organic growth. GBP32m of this RCF remained unutilised as at
30 June 2021.
We apply the cash generated from our trading operations in
reinvesting in our current portfolio of brands, with investment
being primarily targeted at our larger Consumer Healthcare brands,
acquiring new Consumer Healthcare brands, to complement our
existing portfolio and leverage our operating platform, paying down
debt and paying dividends to our shareholders.
Andrew Franklin
Chief Financial Officer
21 September 2021
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2021
Unaudited Unaudited
Six months ended Six months ended
30 June 2021 30 June 2020
==================================== =====================================
Underlying Non-Underlying Underlying Non-Underlying
GBP000s GBP000s GBP000s GBP000s
Note (Note Total (Note Total
6) GBP000s 6) GBP000s
============================== ========== ============== ======== ========== ============== =========
Revenue 4 78,629 - 78,629 61,708 - 61,708
Cost of sales (27,029) - (27,029) (23,117) - (23,117)
============================= ========== ============== ======== ========== ============== =========
Gross profit 51,600 - 51,600 38,591 - 38,591
============================= ========== ============== ======== ========== ============== =========
Operating expenses
Administration and marketing
expenses (28,469) - (28,469) (20,747) - (20,747)
Amortisation of intangible
assets 6 - (3,584) (3,584) - (3,577) (3,577)
Impairment of goodwill
and intangible assets 6 - - - - (12,057) (12,057)
Share-based employee
remuneration (1,476) - (1,476) (595) - (595)
Operating profit/(loss) 21,655 (3,584) 18,071 17,249 (15,634) 1,615
============================= ========== ============== ======== ========== ============== =========
Finance costs
Interest payable and
similar charges 5 (1,773) - (1,773) (1,558) - (1,558)
============================= ========== ============== ======== ========== ============== =========
Finance income 5 217 - 217 572 - 572
============================= ========== ============== ======== ========== ============== =========
(1,556) - (1,556) (986) - (986)
============================= ========== ============== ======== ========== ============== =========
Profit/(loss) before taxation 20,099 (3,584) 16,515 16,263 (15,634) 629
============================== ========== ============== ======== ========== ============== =========
Taxation 7 (4,126) (4,149) (8,275) (3,253) 856 (2,397)
============================= ========== ============== ======== ========== ============== =========
Profit/(loss) for the period
attributable to equity
shareholders 15,973 (7,733) 8,240 13,010 (14,778) (1,768)
============================== ========== ============== ======== ========== ============== =========
Earnings per share
Basic (pence) 9 2.99 1.54 2.45 (0.33)
Diluted (pence) 9 2.94 1.52 2.42 (0.33)
============================= ========== ============== ======== ========== ============== =========
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2021
Unaudited Unaudited
Six months Six months
ended ended
30 June 2021 30 June 2020
GBP000s GBP000s
=========================================== ============= =============
(Loss)/profit for the period 8,240 (1,768)
Other comprehensive income
Items that may be reclassified to profit
or loss:
Interest rate swaps - cash flow hedge (net
of deferred tax) - (10)
Forward exchange forward contracts - cash
flow hedge (net of deferred tax) 303 (762)
Foreign exchange translation differences
(net of deferred tax) (1,790) 2,863
=========================================== ============= =============
Total comprehensive income for the period 6,753 323
=========================================== ============= =============
Unaudited Consolidated Balance Sheet
As at 30 June 2021
Audited
Unaudited 31 December
30 June 2021 2020
Note GBP000s GBP000s
================================= ==== ============= ============
Assets
Non-current assets
Goodwill and intangible
assets 10 407,168 412,872
Property, plant and equipment 11 19,344 15,921
Deferred tax asset 2,064 2,139
Other non-current assets 612 682
================================= ==== ============= ============
429,188 431,614
Current assets
Inventories 23,223 22,917
Trade and other receivables 12 33,562 25,114
Derivative financial instruments 597 310
Cash and cash equivalents 27,390 28,898
================================= ==== ============= ============
84,772 77,239
================================= ==== ============= ============
Total assets 513,960 508,853
================================= ==== ============= ============
Equity
Ordinary share capital 5,353 5,329
Share premium account 150,964 150,645
Share option reserve 9,146 8,426
Other reserve (329) (329)
Cash flow hedging reserve 542 239
Translation reserve (2,845) (1,055)
Retained earnings 117,338 117,703
================================= ==== ============= ============
Total equity 280,169 280,958
================================= ==== ============= ============
Liabilities
Non-current liabilities
Loans and borrowings 15 132,768 138,238
Other liabilities 14 3,083 3,200
Deferred tax liability 59,429 56,181
================================= ==== ============= ============
195,280 197,709
================================= ==== ============= ============
Current liabilities
Corporation tax 3,642 1,435
Trade and other payables 13 29,122 28,736
Derivative financial instruments - 15
Dividend payable 5,747 -
================================= ==== ============= ============
38,511 30,186
================================= ==== ============= ============
Total liabilities 233,791 227,895
================================= ==== ============= ============
Total equity and liabilities 513,960 508,853
================================= ==== ============= ============
Unaudited Consolidated Statement of Cash Flows
For the six months ended 30 June 2021
Unaudited
Unaudited Six months
Six months ended
ended 30 June
30 June 2021 2020
Note GBP000s GBP000s
========================================== ==== ============= ===========
Operating activities
Profit for the period before tax 16,515 629
Interest payable and similar charges 5 1,773 1,558
Interest income 5 (21) (10)
Foreign exchange gain 5 (196) (562)
Depreciation of property, plant
and equipment 11 1,100 831
Amortisation and impairment of
intangible assets 10 3,584 15,634
Loss on disposal of intangibles - 309
Share-based employee remuneration 1,476 595
Change in inventories (306) (2,674)
Change in trade and other receivables (8,879) 1,798
Change in trade and other payables (553) (1,687)
========================================== ==== ============= ===========
Cash generated from operations 14,493 16,421
========================================== ==== ============= ===========
Tax paid (2,236) (1,964)
========================================== ==== ============= ===========
Cash flows from operating activities 12,257 14,457
========================================== ==== ============= ===========
Investing activities
Acquisitions (consideration adjustment) 183 -
Interest received 5 21 10
Purchase of property, plant and
equipment 11 (4,284) (1,949)
Proceeds from the disposal of intangibles 500 385
========================================== ==== ============= ===========
Net cash used in investing activities (3,580) (1,554)
========================================== ==== ============= ===========
Financing activities
Interest paid and similar charges (1,481) (1,974)
Loan issue costs 15 - (330)
Proceeds from exercise of share
options 343 712
Capital lease payments (436) (426)
Dividend paid 8 (2,858) (2,837)
Repayment of borrowings 15 (5,362) (5,930)
========================================== ==== ============= ===========
Net cash used in financing activities (9,794) (10,785)
========================================== ==== ============= ===========
Net movement in cash and cash equivalents (1,117) 2,118
========================================== ==== ============= ===========
Cash and cash equivalents at beginning
of period 28,898 17,830
========================================== ==== ============= ===========
Effects of exchange rate movements (391) 576
========================================== ==== ============= ===========
Cash and cash equivalents at end
of period 27,390 20,524
========================================== ==== ============= ===========
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 June 2021
Cash
Ordinary Share Share flow
Share Premium Option Other Hedging Translation Retained Total
Capital account reserve reserve reserve reserve earnings Equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
==================================== ======== ======== ======== ======== ============ ========= ========
Balance 1 January
2021 (audited) 5,329 150,645 8,426 (329) 239 (1,055) 117,703 280,958
============================= ===== ======== ======== ======== ======== ============ ========= ========
Issue of shares 24 319 - - - - - 343
Dividend paid/payable - - - - - - (8,605) (8,605)
Share options charge
(including deferred
tax) - - 720 - - - - 720
============================= ===== ======== ======== ======== ======== ============ ========= ========
Transactions with
owners 24 319 720 - - - (8,605) (7,542)
============================= ===== ======== ======== ======== ======== ============ ========= ========
Profit for the period - - - - - 8,240 8,240
============================= ===== ======== ======== ======== ======== ============ ========= ========
Other comprehensive income
============================================== ======== ======== ======== ============ ========= ========
Foreign exchange forward
contracts - cash flow
hedge (net of deferred
tax) - - - - 303 - - 303
Foreign exchange translation
differences - - - - - (1,790) - (1,790)
============================= ===== ======== ======== ======== ======== ============ ========= ========
Total comprehensive
income for the period - - - - 303 (1,790) 8,240 6,753
============================= ===== ======== ======== ======== ======== ============ ========= ========
Balance 30 June 2021
(unaudited) 5,353 150,964 9,146 (329) 542 (2,845) 117,338 280,169
============================= ===== ======== ======== ======== ======== ============ ========= ========
Cash
Ordinary Share Share flow
Share Premium Option Other Hedging Translation Retained Total
Capital account reserve reserve reserve reserve earnings Equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
==================================== ======== ======== ======== ======== ============ ========= ========
Balance 1 January
2020 (audited) 5,294 149,036 7,208 (329) 462 (4) 112,513 274,180
============================= ===== ======== ======== ======== ======== ============ ========= ========
Issue of shares 17 696 - - - - - 713
Dividend paid - - - - - - (2,837) (2,837)
Share options charge
(including deferred
tax) - - 510 - - - - 510
============================= ===== ======== ======== ======== ======== ============ ========= ========
Transactions with
owners 17 696 510 - - - (2,837) (1,614)
============================= ===== ======== ======== ======== ======== ============ ========= ========
Loss for the period - - - - - - (1,768) (1,768)
============================= ===== ======== ======== ======== ======== ============ ========= ========
Other comprehensive income
============================================== ======== ======== ======== ============ ========= ========
Interest rate swaps
-
cash flow hedge (net
of deferred tax) - - - - (10) - - (10)
Foreign exchange forward
contracts - cash flow
hedge (net of deferred
tax) - - - - (762) - - (762)
Foreign exchange translation
differences - - - - - 2,863 - 2,863
============================= ===== ======== ======== ======== ======== ============ ========= ========
Total comprehensive
income for the period - - - - (772) 2,863 (1,768) 323
============================= ===== ======== ======== ======== ======== ============ ========= ========
Balance 30 June 2020
(unaudited) 5,311 149,732 7,718 (329) (310) 2,859 107,908 272,889
============================= ===== ======== ======== ======== ======== ============ ========= ========
Notes to the Half Year Report
For the six months ended 30 June 2021
1. General information
Alliance Pharma plc ('the Company') and its subsidiaries
(together 'the Group') acquire, market, and distribute consumer
healthcare products and prescription medicines. The Company is a
public limited company, limited by shares, registered,
incorporated, and domiciled in England and Wales in the UK. The
address of its registered office is Avonbridge House, Bath Road,
Chippenham, Wiltshire, SN15 2BB.
The Company is listed on the London Stock Exchange, Alternative
Investment Market ('AIM').
The information in these financial statements does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006 and is unaudited. These financial statements
have been prepared in accordance with the AIM rules, and IAS 34 has
not been adopted. A copy of the Group's statutory accounts for the
year ended 31 December 2020, prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 ('Adopted IFRS'), has been
delivered to the Registrar of Companies. The auditors' report on
those accounts was unqualified and did not contain statements under
section 498(2) or section 498(3) of the Companies Act 2006.
These consolidated financial statements for the six-month period
ended 30 June 2021 have been approved for issue by the Board of
Directors on 17 September 2021.
2. Going concern
The Group has access to a GBP165m fully Revolving Credit
Facility ('RCF'), with an additional GBP50m accordion facility,
expiring in July 2024.
The RCF is drawn in short to medium-term tranches of debt which
are repayable within 12 months of draw-down. These tranches of debt
can be rolled over provided certain conditions are met, including
covenant compliance. The Group considers that it is highly unlikely
it would be unable to exercise its right to roll over the debt.
This due to mitigating actions it could take to maintain compliance
with these conditions, including future covenant requirements, even
in downside scenarios.
The Directors have prepared cashflow forecasts for a period of
12 months from the date of approval of these financial statements
(the forecast period), that include current estimates of the
continued impact of COVID-19 on the Group's trading position. These
indicate that the Group will have sufficient funds to meet its
liabilities as they fall due, and will continue to comply with its
loan covenants, throughout the forecast period.
Consequently, the Directors are confident that the Group will
have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the date of approval of the
financial statements and have therefore determined it is
appropriate to adopt the going concern basis in preparing the
financial statements.
3. Accounting policies
Judgements and estimates
The Group segregates its portfolio of assets into two areas:
Consumer Healthcare brands and Prescription Medicines.
For the majority of Consumer Healthcare brand assets, indefinite
useful lives are considered to be appropriate. This is due to the
expected long-term growth profile of the Consumer Healthcare
business and the enduring nature of the brands, which are supported
by continuing marketing spend.
For Prescription Medicines brand assets, finite useful lives of
up to 20 years have been adopted from 1 January 2020. The
determination of this lifespan takes into account all relevant
factors for each individual asset, including typical pharmaceutical
asset life cycles and the potential development of alternative
treatments over time.
The carrying value of the Prescription Medicines and certain
other brand assets is amortised to the profit and loss account over
their useful lives.
The Group conducts regular impairment reviews for all intangible
brand assets. The results of recent reviews are detailed in note
6.
Non-underlying items
All amortisation and impairment charges for intangible assets
are included as non-underlying items. The revaluation of deferred
tax balances following substantial tax legislation changes are also
included as non-underlying items. The Directors believe that this
classification of underlying and non-underlying items, when
considered together with total statutory results, provides
investors, analysts and other stakeholders with helpful
complementary information to understand better the financial
performance and position of the Group from period to period, and
allows the Group's performance to be more easily compared against
the majority of its peer companies. These measures are also used by
management for planning and reporting purposes. They may not be
directly comparable with similarly described measures used by other
companies.
Other accounting policies
The remaining accounting policies applied in these interim
financial statements are the same as those published by the Group
in the 31 December 2020 Annual Report. The Annual Report is
available on the Group's website:
www.alliancepharmaceuticals.com.
4. Revenue
Unaudited Unaudited
Six months Six months
ended 30 ended 30
June 2021 June 2020
Revenue information by brand GBP000s GBP000s
=========================================== =========== ===========
Consumer healthcare brands:
Kelo-cote 21,871 14,181
Amberen 9,491 -
Nizoral* 6,738 6,209
MacuShield 4,367 2,837
Vamousse 2,332 3,217
Aloclair 2,722 4,553
Other Consumer healthcare brands 7,057 9,195
=========================================== =========== ===========
Total Revenue - Consumer healthcare brands 54,578 40,192
=========================================== =========== ===========
Prescription medicines:
Hydromol 3,384 3,300
Flamma Franchise 3,575 2,897
Forceval 2,675 2,322
Other Prescription medicines 14,417 12,997
=========================================== =========== ===========
Total Revenue - Prescription medicines 24,051 21,516
=========================================== =========== ===========
Total Revenue 78,629 61,708
=========================================== =========== ===========
Unaudited
Six months Unaudited
ended Six months
30 June ended 30
2021 June 2020
Revenue information by geography GBP000s GBP000s
====================================== =========== ===========
Europe, Middle East and Africa (EMEA) 49,940 44,791
Asia Pacific and China (APAC) 15,653 13,299
Americas (AMER) 13,036 3,618
====================================== =========== ===========
Total Revenue 78,629 61,708
====================================== =========== ===========
* Nizoral is shown on a net profit basis in statutory revenue.
Nizoral revenue presented on a see-through income statement basis
is included as an alternative performance measure in note 17.
5. Finance costs
Unaudited Unaudited
Six months Six months
ended 30 ended 30
June 2021 June 2020
GBP000s GBP000s
===================================== =========== ===========
On loans and overdrafts (1,408) (1,139)
Amortised finance issue costs (318) (267)
Net fair value losses on derivatives - (109)
Interest on lease liabilities (47) (43)
===================================== =========== ===========
Interest payable and similar charges (1,773) (1,558)
===================================== =========== ===========
Interest income 21 10
Net exchange gain 196 562
===================================== =========== ===========
Finance income 217 572
===================================== =========== ===========
Net finance costs (1,556) (986)
===================================== =========== ===========
6. Non-underlying items
The Group presents a number of non-IFRS measures which exclude
the impact of significant non-underlying items. This is to allow
investors to understand the underlying performance of the Group,
and can exclude items such as: amortisation and impairment of
intangibles; gains or losses on disposal; remeasurement and
accounting for the passage of time in respect of contingent
considerations; and the revaluation of deferred tax balances
following substantial tax legislation changes.
This assessment requires judgement to be applied by the
Directors as to which transactions are non-underlying and whether
this classification enhances the understanding of the users of the
financial statements.
Unaudited Unaudited
Six months Six months
ended 30 ended 30
June 2021 June 2020
GBP000s GBP000s
============================================== =========== ===========
Amortisation of intangible assets 3,584 3,577
Impairment of goodwill and intangible assets - 12,057
============================================== =========== ===========
Total non-underlying items before taxation 3,584 15,634
============================================== =========== ===========
Taxation on amortisation and impairment items (903) (2,298)
Impact of UK tax rate change from 17% to
19% - 1,442
Impact of UK tax rate change from 19% to
25% 5,052 -
============================================== =========== ===========
Non-underlying taxation 4,149 (856)
============================================== =========== ===========
Total non-underlying items after taxation 7,733 14,778
============================================== =========== ===========
Amortisation of intangible assets
As disclosed in note 3, finite useful lives of up to 20 years
have been adopted from 1 January 2020 for Prescription Medicines
and certain other brand assets. The carrying value of the
Prescription Medicines and certain other brand assets is amortised
to the profit and loss account over their useful lives.
Impairment of goodwill and intangible assets
The Group conducts regular impairment reviews for all intangible
assets and no impairment charges arose as a result of the review
carried out in the current period.
The review carried out in the period to 30 June 2020, together
with the change in useful life assumption for Prescription Medicine
assets, resulted in impairment losses as the carrying value of
certain cash-generating units exceeded estimated recoverable
amounts. Recoverable amounts are the greater of value in use and
fair value less costs to sell over the assets' useful lives.
The key Prescription Medicines assets impacted were:
Haemopressin and Optiflo intangible asset impaired by
GBP5.3m.
Nu-seals intangible asset impaired by GBP3.6m.
Goodwill and other intangible assets were also impaired by
GBP3.2m.
Impact of UK tax rate change from 17% to 19%
The taxation charge includes the impact on deferred tax of the
increase in the main rate of UK corporation tax from 17% to 19%,
following the abandonment of the proposed reduction to 17% in the
March 2020 Budget.
Impact of UK tax rate change from 19% to 25%
In the Budget on 3 March 2021, a further change to UK
corporation tax rates was announced, increasing the main rate of
corporation tax from 19% to 25% with effect from 1 April 2023. The
impact on deferred tax of this further rate increase is included in
these financial statements as a non-underlying item.
7. Taxation
Analysis of charge for the period is as follows:
Unaudited Unaudited
Six months ended 30 Six months ended 30
June 2021 June 2020
============= ==================================== ====================================
Non-Underlying Non-Underlying
GBP000s GBP000s
Underlying (Note Total Underlying (Note Total
GBP000s 6) GBP000s GBP000s 6) GBP000s
============== ========== ============== ======== ========== ============== ========
Corporation
tax 4,126 - 4,126 2,439 - 2,439
Deferred tax - 4,149 4,149 814 (856) (42)
============== ========== ============== ======== ========== ============== ========
Taxation 4,126 4,149 8,275 3,253 (856) 2,397
============== ========== ============== ======== ========== ============== ========
The difference between the total tax charge and the amount
calculated by applying the standard rate of UK corporation tax to
profit before tax is as follows:
Unaudited
Unaudited Six months
Six months ended
ended 30 30 June
June 2021 2020
GBP000s GBP000s
======================= ============ ============
Profit before taxation 16,515 629
======================= ============ ============
Profit before taxation multiplied by standard
rate of corporation tax in the United Kingdom
at 19% (2019: 19%) 3,138 120
Effects of:
Non-deductible items and adjustments 988 163
Non-qualifying amortisation and impairment (903) 672
UK rate change impact (note 6) 5,052 1,442
=============================================== ===== =====
Total tax charge 8,275 2,397
=============================================== ===== =====
8. Dividends
The Board has declared an interim dividend payment of 0.563p per
share for the 2021 financial year. This will be paid to
shareholders in January 2022.
Six months
ended
30 June
2021
Pence/share GBP000s
============================================= ============ ==========
Amounts recognised as distributions to shareholders
in 2021
=========================================================== ==========
Interim dividend for the 2020 financial year 0.536 2,858
Final dividend for the 2020 financial year 1.074 5,747
============================================= ============ ==========
8,605
============================================= ============ ==========
The interim dividend for 2020 was paid on 7 January 2021. The
final dividend for 2020 was paid on 8 July 2021.
Six months
ended
30 June
2020
Pence/share GBP000s
==================================================== ============ ==========
Amounts recognised as distributions to shareholders
in 2020
Interim dividend for the 2019 financial year 0.536 2,837
==================================================== ============ ==========
The interim dividend for 2019 was paid on 10 January 2020.
9. Earnings per share ('EPS')
Basic EPS is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of Ordinary
Shares outstanding during the period. For diluted EPS, the weighted
average number of Ordinary Shares in issue is adjusted to assume
conversion of all dilutive potential Ordinary Shares.
A reconciliation of the weighted average number of Ordinary
Shares used in the measures is given below:
Weighted average number
of shares 000s
================ =========================
Six months
Six months ended
ended 30 June
30 June 2021 2020
================ ============= ==========
For basic EPS 534,189 530,303
Share options 8,667 6,875
================ ============= ==========
For diluted EPS 542,855 537,178
================ ============= ==========
Six months
Six months to
to 30 June
30 June 2021 2020
GBP000s GBP000s
========================================== ============= ==========
Earnings for basic and diluted EPS 8,240 (1,768)
Non-underlying items (note 6) 7,733 14,778
========================================== ============= ==========
Earnings for underlying basic and diluted
EPS 15,973 13,010
========================================== ============= ==========
The resulting EPS measures are:
Six months
Six months to
to 30 June
30 June 2021 2020
Pence Pence
======================= ============== ===========
Basic EPS 1.54 (0.33)
======================= ============== ===========
Diluted EPS 1.52 (0.33)
======================= ============== ===========
Underlying basic EPS 2.99 2.45
======================= ============== ===========
Underlying diluted EPS 2.94 2.42
======================= ============== ===========
10. Goodwill and intangible assets
Consumer Prescription
Healthcare Medicines
brands brands
Goodwill and distribution and distribution
GBP000s rights rights Total
GBP000s GBP000s GBP000s
========================================= ========== ================= ================= ========
Cost
At 1 January 2021 (audited) 32,404 258,203 152,890 443,497
Acquisitions (consideration adjustment*) (183) - - (183)
Exchange adjustments (201) (952) (784) (1,937)
========================================= ========== ================= ================= ========
At 30 June 2021 (unaudited) 32,020 257,251 152,106 441,377
========================================= ========== ================= ================= ========
Amortisation and impairment
At 1 January 2021 (audited) 1,144 6,459 23,022 30,625
Amortisation for the period (note
6) - 103 3,481 3,584
========================================= ========== ================= ================= ========
At 30 June 2021 (unaudited) 1,144 6,562 26,503 34,209
========================================= ========== ================= ================= ========
Net book amount
At 30 June 2021 (unaudited) 30,876 250,689 125,603 407,168
========================================= ========== ================= ================= ========
At 1 January 2021 (audited) 31,260 251,744 129,868 412,872
========================================= ========== ================= ================= ========
* The consideration adjustment relates to a working capital
adjustment in relation to the Biogix acquisition.
11. Property, plant and equipment
Computer Fixtures, Right-of-use
software fitting Plant lease
and equipment and equipment & machinery assets Total
The Group GBP000s GBP000s GBP000s GBP000s GBP000s
============================ ============== ============== ============ ============ =========
Cost
At 1 January 2021 (audited) 13,048 2,511 32 6,739 22,330
Additions 3,289 933 62 275 4,559
Effect of movements in
exchange rates - - (5) - (5)
============================ ============== ============== ============ ============ =========
At 30 June 2021 (unaudited) 16,337 3,444 89 7,014 26,884
============================ ============== ============== ============ ============ =========
Depreciation
At 1 January 2021 (audited) 1,620 1,408 8 3,373 6,409
Provided in the period 414 245 34 407 1,100
Effect of movements in
exchange rates 23 - (15) 23 31
============================ ============== ============== ============ ============ =========
At 30 June 2021 (unaudited) 2,057 1,653 27 3,803 7,540
============================ ============== ============== ============ ============ =========
Net book amount
At 30 June 2021 (unaudited) 14,280 1,791 62 3,211 19,344
============================ ============== ============== ============ ============ =========
At 1 January 2021 (audited) 11,428 1,103 24 3,366 15,921
============================ ============== ============== ============ ============ =========
12. Trade and other receivables
Unaudited Audited
30 June 31 December
2021 2020
GBP000s GBP000s
=============================== ========== =============
Trade receivables 29,147 19,834
Other receivables 1,375 1,544
Prepayments and accrued income 3,040 3,736
=============================== ========== =============
33,562 25,114
=============================== ========== =============
13. Trade and other payables
Unaudited Audited
30 June 31 December
2021 2020
GBP000s GBP000s
====================================== ========== =============
Trade payables 10,168 11,275
Other taxes and social security costs 2,574 2,440
Accruals and deferred income 14,077 13,639
Other payables 1,190 418
Lease liabilities 1,113 964
====================================== ========== =============
29,122 28,736
====================================== ========== =============
14. Other non-current liabilities
Unaudited Audited
30 June 31 December
2021 2020
GBP000s GBP000s
============================== ========== =============
Lease liabilities 2,610 2,731
Other non-current liabilities 473 469
============================== ========== =============
3,083 3,200
============================== ========== =============
15. Loans and borrowings
The Group has access to a GBP165m fully Revolving Credit
Facility ('RCF'), with an additional GBP50m accordion facility,
expiring in July 2024.
The bank facility is secured by a fixed and floating charge over
the Company's and Group's assets registered with Companies
House.
The Group also has access to an overdraft facility of
GBP4.0m.
Movements in borrowings are analysed as follows:
GBP000s
========================================= =======
At 1 January 2021 (audited) 138,328
Repayment of borrowings (5,362)
Amortisation of prepaid arrangement fees 305
Exchange movements* (503)
========================================= =======
At 30 June 2020 (unaudited) 132,768
========================================= =======
* Exchange movements on loans and borrowings are reported in
other comprehensive income and accumulated in the translation
reserve.
The carrying amount of the group's borrowings are denominated in
the following currencies:
Unaudited Audited
30 June 31 December
2020 2020
GBP000s GBP000s
================= ========== =============
GBP 100,817 105,317
USD 25,138 25,322
EUR 8,099 9,281
Loan issue costs (1,286) (1,592)
================= ========== =============
132,768 138,238
================= ========== =============
16. Contingent liabilities
On 23 May 2019, the UK's Competition and Markets Authority
('CMA') issued a Statement of Objection alleging anti-competitive
agreements against the Group and certain other pharmaceutical
companies in relation to the sale of prescription prochlorperazine.
Prochlorperazine is one of the Group's smaller products and had
peak sales in 2015 of GBP1.9m and sales of GBP0.3m in 2020.
The Group confirms that it has had no involvement in the pricing
or distribution of prochlorperazine since 2013, when it was
outlicensed by the Group. Prior to 2013, prochlorperazine was
marketed directly by the Group.
The Group has reviewed the CMA Statement of Objection in detail
and is working with the CMA to resolve its alleged objections.
The Group's assessment as at the date of this report, based on
currently available information, is that there are no matters for
which a provision is required (31 December 2020: GBPnil). However,
given the inherent uncertainties involved in assessing the outcomes
of such matters there can be no assurance regarding the outcome of
any ongoing inspections/investigations and the position could
change over time.
17. Alternative performance measures
The performance of the Group is assessed using Alternative
Performance Measures ('APMs'). The Group's results are presented
both before and after non-underlying items. Adjusted profitability
measures are presented excluding non-underlying items as we believe
this provides both management and investors with useful additional
information about the Group's performance and aids a more effective
comparison of the Group's trading performance from one period to
the next and with similar businesses.
In addition, the Group's results are described using certain
other measures that are not defined under IFRS and are therefore
considered to be APMs. These measures are used by management to
monitor ongoing business performance against both shorter-term
budgets and forecasts but also against the Group's longer-term
strategic plans.
APMs used to explain and monitor Group performance are:
Reconciliation
Measure Definition to GAAP measure
================= ===================================================== ================
Underlying Earnings before interest, tax and non-underlying Note A below
EBIT and items ('EBIT'), then depreciation, amortisation
EBITDA and underlying impairment ('EBITDA').
Calculated by taking profit before tax and
financing costs, excluding non-underlying
items and adding back depreciation and amortisation.
================= ===================================================== ================
Free cash Free cash flow is defined as cash generated Note B below
flow from operations less cash payments made for
financing costs, capital expenditure and
tax.
================= ===================================================== ================
Net debt Net debt is defined as the Group's gross Note C below
bank debt position net of finance issue costs
and cash.
================= ===================================================== ================
See-through Under the terms of the transitional services Note D below
income statement agreement with 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 the Asia-Pacific territories
transfer from J&J to Alliance. The net product
margin is recognised as part of statutory
revenue.
The see-through income statement recognises
the underlying sales and cost of sales which
give rise to the net product margin, as management
consider this to be a more meaningful representation
of the underlying performance of the business,
and to reflect the way in which it is managed.
================= ===================================================== ================
A. Underlying EBIT and EBITDA
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2021 2020
Reconciliation of Underlying EBIT and EBITDA GBP000s GBP000s
============================================= =========== ===========
Profit before tax 16,515 629
Non-underlying items (note 6) 3,584 15,634
Net finance costs (note 5) 1,556 986
============================================= =========== ===========
Underlying EBIT 21,655 17,249
Depreciation (note 11) 1,100 831
Underlying EBITDA 22,755 18,080
============================================= =========== ===========
B. Free cash flow
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2021 2020
Reconciliation of free cash flow GBP000s GBP000s
================================= =========== ===========
Cash generated from operations 14,493 16,421
Financing costs (1,481) (1,974)
Capital expenditure (4,284) (1,949)
Tax paid (2,236) (1,964)
================================= =========== ===========
Free cash flow 6,492 10,534
================================= =========== ===========
C. Net debt
Unaudited Audited
30 June 31 December
2021 2020
Reconciliation of net debt GBP000s GBP000s
=================================== ========= =============
Loans and borrowings - non-current (132,768) (138,238)
Cash and cash equivalents 27,390 28,898
=================================== ========= =============
Net debt (105,378) (109,430)
=================================== ========= =============
D. See-through income statement
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2021 2021
statutory See-through see-through
values adjustment values
GBP000s GBP000s GBP000s
==================== =========== =========== ============
Revenue 78,629 2,224 80,853
Cost of sales (27,029) (2,224) (29,253)
==================== =========== =========== ============
Gross profit 51,600 - 51,600
==================== =========== =========== ============
Gross profit margin 65.6% - 63.8%
==================== =========== =========== ============
There is no impact from the see-through adjustment on income
statement lines below gross profit.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FLFVDAIIIFIL
(END) Dow Jones Newswires
September 21, 2021 02:00 ET (06:00 GMT)
Alliance Pharma (LSE:APH)
Historical Stock Chart
From Apr 2024 to May 2024
Alliance Pharma (LSE:APH)
Historical Stock Chart
From May 2023 to May 2024