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magazineWhy Alliance Pharma is in good health
Alliance Pharma (APH:AIM) 71p
Gain to date: 13.6%
Original entry point: Buy at 62.5p, 21 December 2017
Alliance Pharma (APH:AIM) has issued a reassuring trading statement, saying that full year revenue for 2017 will be 6% higher on the previous year at £103.3m.
Alliance Pharma is one of our top stock picks for 2018 as we like its growth potential, which is expected to be supported by targeted marketing and bolt-on acquisitions.
The company acquires and licences pharmaceutical and healthcare products to deliver to patients.
Sales of scar reduction product Kelo-Cote jumped 33% to £13.3m in 2017. Age-related macular degeneration treatment MacuShield sales rose 37% to £7.3m in the same period.
The weaker pound had a beneficial effect on revenue, but had less of an impact on operating profit due to higher costs, leaving 2017 pre-tax profit in line with expectations.
Cash generation increased significantly from £13m in 2016 to £21.5m in 2017, helping to drive debt lower.
Numis analyst Sally Taylor says the recent acquisition of Smith & Nephew’s (SN.) topical gel Ametop and worldwide rights of TyraTech’s (TYR:AIM) head lice treatment Vamousse should help lift sales by 11.5% in 2018.
The analyst forecasts continued double-digit sales growth momentum for Kelo-Cote, MacuShield and Vamousse in 2018.
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Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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