On September 20, 2022 Alliance Pharma plc (AIM: APH), the international healthcare group, reported its interim results for the six months ended 30 June 2022 ("the Period") (Press release, Alliance Pharma, SEP 20, 2022, View Source;lang=en-GB&companycode=uk-aph&v= [SID1234619694]). The Group navigated the challenges of H1 well and is on track to accelerate revenues in H2 as supply constraints ease and our marketing and product development initiatives stimulate greater demand. We remain on track to meet market expectations for full year financial performance, noting that the timing of certain orders in Q4 is dependent on the rate of recovery in those markets.

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OPERATING AND FINANCIAL HIGHLIGHTS

· H1 revenue growth impacted by lockdown in Shanghai, and associated temporary disruption to supply chain, therefore, as previously indicated, performance more heavily weighted to H2 due to order phasing

· Consumer Healthcare see-through revenue* up 1% to £57.4m (H1 21: £56.8m) with 15% growth in Other Consumer Healthcare revenues offsetting softer performance in key brands

·Robust Prescription Medicine performance with revenues of £24.1m in line with prior year (H1 21: £24.1m)

· Free cash flow of £5.1m (H1 21: £6.5m). Highly strategic acquisition of ScarAway and US rights to Kelo-cote for $19.4m (£14.8m) led to an increase in net debt and Group leverage of 2.05x at Period end.

DEVELOPING OUR BUSINESS

· Integration of ScarAway and US rights to Kelo-cote completed, with revenues in-line with expectations

·Last remaining Nizoral marketing authorisations transferred from J&J to Alliance in China and Vietnam, new top-tier Chinese distributor appointed and manufacturing supply consolidation progressing well which will result in improvements in efficiencies and COGS

· Several new complementary proprietary products launched, or planned to launch this year, including Kelo-cote Kids and Kelo-cote Scar Sheets in China, and Canker-X in the USA, all of which will contribute to ongoing organic growth

· ERP system successfully rolled out to further territories including North America

· Scope 1 and 2 emissions target set to achieve net zero in 2030, with an interim reduction of 65% by 2025

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

"I am pleased with the performance of the Group in the first half of 2022 against the backdrop of difficult global trading conditions. Our portfolio continues to provide a robust platform from which to grow our consumer healthcare brands. I was also delighted to close a highly strategic US acquisition in the Period which consolidates our position in the scar reduction market. The integration of ScarAway has gone very smoothly and we continue to evaluate opportunities to acquire selective complementary new products to enhance our Consumer Healthcare platform.

"The second half of 2022 has got off to an encouraging start as lockdowns and supply constraints have eased. We anticipate strong sales growth in H2 as our marketing campaigns yield benefits, we integrate our new distribution partners and launch new products to grow our market share. Our FY 22 expectation includes several large distributor orders in Q4 to meet increased demand, with the timing of these orders dependent on the rate of recovery in those markets. Our base business remains strong with further new product launches expected in 2023 to secure future growth."

* 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 all sales from Nizoral as if they had been invoiced by Alliance as principal. For statutory accounting purposes the product margin relating to Nizoral sales made on an agency basis is included within Revenue, in line with IFRS 15.

ANALYST MEETING & WEBCAST

A meeting for analysts will be held at 9.30am this morning, 20 September 2022, at Investec Bank plc, 30 Gresham Street, London EC2V 7QP. For further details, analysts should contact Buchanan at [email protected].