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magazineAlliance Pharma remains on growth track
Alliance Pharma (APH:AIM) 77.4p
Gain to Date: +8%
Entry point: Buy at 71.6p, 3 October 2019
Pharmaceuticals firm Alliance Pharma (APH:AIM) continued its trend of strong revenue and profit growth when it reported results for the year ended 31 December 2019 on 7 April, with revenue up 16% to £144m and pre-tax profit up 36% to £31m.
Free cash generation was 81% higher at £29m, which reduced net debt to £59m from £86m last year and resulted in a net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio of 1.48 times, down from 2.3 times.
The international star brands portfolio performed well, delivering like-for-like growth of 30% and these key brands now account for 45% of group revenues, with the percentage expected to increase in the current year.
Local brands delivered a stable performance with revenues of £78.3m (2018: £73m) as the company discontinued a few products as part of the regular review and trimming of the portfolio. Cash generation from these assets is expected to remain strong, reflecting limited promotional investment.
Taking a prudent approach to the ongoing coronavirus pandemic, the board cancelled the final dividend for 2019 to preserve cash.
Remote working practices and a high level of connectivity means the company has seen minimal disruption to the business. The supply chain is said to be holding up well with no material impact in the current year expected.
SHARES SAYS: We remain buyers.
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