Alliance Pharma's growth potential remains underappreciated
Pharmaceutical specialist Alliance Pharma’s (APH:AIM) recent first-half results (21 Sep) demonstrate the strength of the business with like-for-like revenue growth in the consumer healthcare division (70% of the business) and prescription medicines division both up 12% year-on-year.
The star performer in the first half was scar prevention and treatment brand Kelo-cote which saw like-for-like revenues up 62% driven by strong demand in China.
The increasing propensity of Chinese customers to buy their health products online was a key driver and the company estimates that the market has the potential to grow by a compound annual growth rate of 17% a year out to 2025.
The company signed a new distribution deal in August which it said gets it closer to the customer and provides greater control of its distribution chain in China.
The 2020 Amberen acquisition has been fully integrated and is delivering in line with management expectations. After launching the Perimenopause treatment in June, the company’s market share has doubled to 7%, demonstrating the potential US opportunity.
SHARES SAYS: We believe that Alliance Pharma’s growth potential remains undiminished while the shares still trade
at a discount to peers according to Numis.