Source - RNS
RNS Number : 7587J
Alliance Pharma PLC
14 September 2016
 

For immediate release

14 September 2016

 

ALLIANCE PHARMA PLC

("Alliance" or the "Company")

 

Interim Results for the six months ended 30 June 2016

 

Alliance Pharma plc (AIM: APH), the specialty pharmaceutical company, is pleased to announce its interim results for the six months ended 30 June 2016.

 

Highlights:

 

·      Half year revenue up 104% at £46.4m (H1 2015: £22.8m)

 o Ex-Sinclair products have made an immediate contribution to our results, in line with our expectations and enabling revenues to more than double

o Underlying revenue growth of 6% in the original Alliance portfolio

·      Our largest-selling brand is now the scar reduction product, Kelo-cote™, which achieved H1 sales of £4.1m from a widely spread international base

·      Hydromol™, our emollient range, maintained its double digit growth rate, with H1 sales of £3.5m

·      MacuShield™, our nutritional supplement product for age related macular degeneration (AMD), delivered H1 sales of £2.0m (£1.4m in the five months after we acquired it in February 2015)

·      Half year EBITDA up 109% at £13.2m (H1 2015: £6.3m)

·      Half year PBT up 113% at £11.7m (H1 2015: £5.5m)

·      Basic earnings per share 2.04p (H1 2015: 1.65p)

·      Interim dividend up 10% to 0.403p (H1 2015: 0.366p)

·      Net bank debt £79.0m (31 December 2015: £71.5m)

Driven jointly by increases in working capital and Sterling's weakness

 

Commenting on the results, Andrew Smith, Alliance Pharma's Chairman, said:

 

"Alliance Pharma is a transformed business with sales and profits in the first half of 2016 having doubled from those of 2015.  We are already seeing opportunities to exploit our expanded international capabilities.  We were delighted to announce yesterday the signing of an EU licensing and distribution agreement for Diclectin with Duchesnay Inc., which provides the opportunity to launch this product in a further nine EU territories.  This agreement highlights the potential of our strengthened European base."  

 

For further information:

 

Alliance Pharma plc

+ 44 (0) 1249 466966

 

John Dawson, Chief Executive

Andrew Franklin, Chief Financial Officer

Sarah Robinson, Company Secretary

 

 

Buchanan

 

+ 44 (0) 20 7466 5000

Mark Court / Sophie Cowles / Jane Glover

 

 

 

Numis Securities Limited

 

 

+ 44 (0) 20 7260 1000

Nominated Adviser: Michael Meade / Freddie Barnfield

 

Corporate Broking: James Black / Toby Adcock

 

 

 

 

Notes to editors:

 

About Alliance

Alliance, founded in 1998, is an international specialty pharmaceutical company based in Chippenham, Wiltshire, UK. The Company has sales in more than 100 countries worldwide via direct sales, joint ventures and a network of distributors.  Alliance has a strong track record of acquiring the rights to established niche products and it currently owns or licenses the rights to approximately 90 pharmaceutical and consumer healthcare products. The Company continues to explore opportunities to expand its product portfolio.

 

Alliance joined the AIM market of the London Stock Exchange in December 2003 and trades under the symbol APH.

 

 

 

 

Chairman's and Chief Executive's Statement

Alliance Pharma in 2016 is twice the size that it was in 2015. We are a transformed business looking forward to greatly increased opportunities in 2016 and beyond. The integration of the Sinclair Healthcare Products business acquired in December 2015 has brought us 27 new products, increasing our portfolio to some 90 products, and extended our reach from around 40 countries to over 100. We are now a truly international business, with half of our sales in markets outside the UK.

 

The original Alliance products performed strongly in the first half and the ex-Sinclair products have made an immediate contribution to our results, in line with our expectations.

 

Integration of the Sinclair operations is advancing well. We have maintained the flow of the business and will be independent from Sinclair in terms of the cash generating activities in Q4 this year. Other items such as packaging and livery changes that depend upon regulatory approvals will take up to 18 months to be complete in all the territories.

 

Most of the key positions within the organisation have now been filled and we are working hard to implement standard ways of working and to develop a common culture, building on the best of the two organisations.

 

Trading performance

 

In the first half of 2016, sales more than doubled to £46.4m (H1 2015: £22.8m). The ex-Sinclair products contributed sales of £20.6m, in line with expectations, while the balance of £25.8m represented over 13% growth in the original Alliance portfolio. This strong performance reflected 6% underlying growth, augmented by 7% from one-off events such as the full year effects of products acquired in 2015 or products with restored availability. 

 

The weakening of Sterling against the Euro and the US Dollar that developed during the half year had the effect of increasing sales by 2% when compared to the rates at the start of the year. The impact to profit before tax is significantly less due to the benefit to sales being offset by increased costs denominated in these currencies.

 

Our three strategic growth brands all performed well. Our largest-selling brand is now the scar reduction product, Kelo-cote™, which achieved H1 sales of £4.1m from a widely spread international base. Hydromol™, our emollient range, maintained its double digit growth rate, with H1 sales of £3.5m predominantly from the UK. And MacuShield™, our nutritional supplement product for age related macular degeneration (AMD) delivered H1 sales of £2.0m, the majority of which originated from the UK and Ireland. This compared with £1.4m in the five months after we acquired it in February 2015.

 

UK

 

The UK remains our largest territory returning sales of £24.0m (H1 2015: £18.3m).

 

In addition to Hydromol, mentioned above, other notable achievements included:

 

The consumer healthcare brands performing well. Ashton & Parsons Infants' Powders grew by 51% to £1.1m in H1 as we signed-up more national retail chains and supported them with advertising investment. Brand loyalty is strong and we expect further growth as awareness of the brand spreads. Additionally, Anbesol, our treatment for mouth ulcers and teething, had sales of £0.8m in H1, an increase of 10% over the prior year.

 

In ophthalmology, UK MacuShield sales were £1.3m, compared with £1.0m for the first five months of 2015.

 

We were able to bring our bladder cancer treatment, ImmuCyst™, back to the market in February as our supplier, Sanofi Pasteur, resumed production after a 3½-year suspension. Production remains restricted, so we will not be able to expand our market share beyond about 25% and we are thus managing sales carefully to ensure continuity of care to every patient who begins a course of treatment. Volumes have been building steadily and we are confident that we will sell all our available supplies, yielding revenues of around £1 million in 2016.

 

Sales of Forceval capsules continued their strong recovery from stock-outs, with UK sales up 36% to £1.3m in H1 2016.

 

Western Europe (excl. UK)

 

Sales for the rest of Western Europe totalled £11.7m (H1 2015: £2.3m).

 

In France sales were £4.5m with the largest seller being the burns treatments Flammazine / Flammacerium at £1.4m.

 

In the Republic of Ireland, sales were £2.4m. Nu-Seals achieved sales of £1.1m compared with £1.0m in the prior year as the threat of generic substitution seems to have abated. Additionally MacuShield performed strongly with sales of £0.4m compared with £0.2m in the first five months of 2015.

 

In the Germany, Austria, Switzerland (DACH) region, sales were £2.0m with the largest product being Flammazine at £0.9m.

 

Spain and Italy recorded sales of £1.4m and £1.3m respectively with Aloclair, the mouth ulcer treatment, being the largest product in each country with sales of £0.8m and £0.9m respectively.

 

International

 

Total sales outside of Western Europe were £10.7m (H1 2015: £2.2m).

 

Kelo-cote was the largest selling international product recording sales of £3.2m, with £0.6m coming from Latin America, £0.9m coming from China and £0.8m from Southeast Asia. 

 

Flammazine sold £1.1m with £0.5m coming from Central and Eastern Europe (CEE) and £0.5m from the Middle East and Africa (MEA); and Aloclair £1.0m with £0.5m from CEE. International sales for Syntometrine were £0.7m and the range of child nutrition products acquired from Sinopharm in China last year achieved sales of £0.4m.

 

 

Financial performance

 

Pre-tax profits more than doubled to £11.7m (H1 2015: £5.5m). This was a particularly encouraging result in the first period following the acquisition of the Sinclair products.

 

Gross margin was 56.0%, resulting in gross profit of £26.0m (H1 2015: £13.8m, 60.5%). This lower gross margin percentage is in line with our expectations as the Sinclair business has a slightly lower average gross margin than our original Alliance business. We expect average margin for the combined business to be in the range 55%-60% going forward.

 

Operating costs for the half year totalled £13.4m compared with £7.7m in the first half of 2015. Marketing investment was mainly directed at Kelo-cote, Hydromol, MacuShield, Diclectin, Ashton & Parsons, the re-introduction of ImmuCyst and the Flamma franchise. Transition costs, including interim staff, totalled £1.3m.  Whilst there have been transition costs associated with the integration of the Sinclair acquisition that will not recur in 2017, they will be compensated by the full year effect of employees recruited during this year.

 

Earnings before interest, taxes, depreciation and amortisation (EBITDA), defined as Operating Profit (incl. share of Joint Venture profit) less Depreciation and Amortisation, was £13.2m (H1 2015: £6.3m). This represents 28.5% of sales, placing us close to the top of our 25-30% target range.

 

Alliance remains a strongly cash-generative business. However, cash generation in the short term has been constrained by an increase in working capital from the balance of trade debtors and creditors associated with the acquisition of the Sinclair products. Working capital, with the exception of inventory, was not purchased as part of the Sinclair acquisition and we have therefore seen a build-up in H1 that we expect to now stabilise. Despite this, cash flow from Operating Activities in the first half increased to £4.2m (H1 2015: £2.8m). 

 

Net debt rose to £79.0m from £71.5m at the end of 2015. The increase was partly due to increases in working capital levels and partly due to Sterling's weakness following the EU referendum, as approximately half our debt is denominated in Euros and US Dollars. At constant exchange rates, the 2016 half year figure would have been approximately £75.8m. The movement in foreign denominated loans and subsidiaries is largely accounted for within equity, therefore there is minimal P&L impact from the exchange rate movement on our loans.

 

The bank debt/EBITDA ratio remained stable over the period, being 2.8 times at the end of the first half and also 2.8 times at the end of 2015 (both including historic Sinclair pro forma EBITDA). The ratio at half year was adversely impacted by Sterling's weakness on net debt and the increase in working capital. From the second half of 2016 onwards we expect to reduce this figure progressively as cash generation increases and working capital stabilises.

 

At the end of the period we had unused bank facilities of £20.5m. This gives us ample headroom to finance bolt-on additions if attractive opportunities arise.

 

 

Dividend

 

In line with our progressive dividend policy, and given the strong progress made in the first half of 2016, we are making an interim payment of 0.403p per ordinary share (H1 2015: 0.366p). This represents an increase of 10% on last year's figure while maintaining dividend cover at more than 3 times earnings.

 

The interim dividend will be paid on 12 January 2017 to shareholders on the register on 23 December 2016.

 

 

Strategy

 

Our strategy is to build our portfolio by acquiring products that are already established in their market or by in-licensing already-developed products for launch. We deploy our capital to grow our cash generating portfolio, leaving activities such as manufacturing, storage and logistics to be outsourced to leading specialist organisations in these fields.

 

In building our portfolio we balance two elements: the first being brands with growth potential in which we invest and the second being well-established niche brands that will maintain their sales for many years with little or no promotion, thus providing a cash generating "bedrock" that feeds the growth activities. By balancing the two elements, we can invest in targeted marketing to grow sales while maintaining good cash generation and profitability.

 

Under our long-established 'buy and build' strategy we supplement organic growth with acquisitions that allow us to accelerate expansion and adjust the balance of our portfolio. The Sinclair transaction in December 2015 was our 31st and largest-ever acquisition. We made no acquisitions in H1 2016.

 

The Sinclair business brought us brands in both the 'growth' and 'bedrock' categories, leaving the balance broadly unchanged. Since the acquisition we have been refining our strategies for individual brands, to determine which products and which markets will be the focus of our marketing investment.

 

Sinclair has greatly expanded our international footprint - lifting non-UK sales from about 19% of turnover to approximately 50%, giving us a market presence in some 60 additional countries and giving us critical mass in the major EU territories. This creates new opportunities to broaden the marketing and distribution of brands - although careful analysis and planning is necessary, as a successful niche brand from one country may face a very different competitive landscape in other markets. Our greater scale and footprint also bring strategic advantages. Alliance is now a credible candidate for larger and more complex acquisitions in a wider range of territories; and we are also well placed to broaden the scope of existing agreements, as indicated by yesterday's announcement to acquire the licensing and distribution rights to Diclectin in a further nine EU countries

 

We continue to make good progress towards UK registration for Diclectin. This well-established product, which has been a routinely used treatment in Canada for over 30 years for nausea and vomiting of pregnancy. In the United States, it was licensed by the FDA in 2013 under the name Diclegis with a Category A safety rating for drugs used during pregnancy, and has performed strongly since launch.  We expect UK registration next year, enabling us to begin sales in the second half.

 

In the meantime, in the UK consumer health market, we are preparing to relaunch Lypsyl in the second half of this year. We have re-engineered the product and upgraded the pack design to enhance its shelf presence. The lip balm market is a crowded one, but Lypsyl still enjoys high consumer awareness - the trademark was first registered 125 years ago - and we are confident that this rejuvenated brand can reclaim a strong position.

 

The significantly greater scale of our business has highlighted the need for investment in a new enterprise resource planning (ERP) system to manage the enlarged portfolio and facilitate further expansion in the future. We will start this project in early 2017 once the majority of the Sinclair integration has completed.

 

Team

 

Prior to the acquisition of the Sinclair products, we had fine-tuned the leadership of the major functions within the business and also had in place Country Managers for France and Germany. This greatly facilitated our absorption of the Sinclair products business. As part of the Sinclair transaction, Dario Opiparo transferred to us as Country Manager for Italy. We promoted Steve Lobb to Head of UK & Ireland; Alex Duggan to Head of Strategy for our Global Consumer Brands; and Karim Husny to be Head of our International Business. Thus we have been able to hit the ground running in taking over the new business that effectively doubled the size of our operation. To complement the foregoing, we have appointed Luis Silva as Country Manager for Spain, Roger Lim as Regional Business Manager for Southeast Asia and we expect to appoint a new head of our enlarged China business in the near future. We thus have in place senior managers who can provide market insight and knowledge across all our geographic interests.

 

Charity

 

We continue to donate products regularly to International Health Partners, which distributes medicines to doctors in the world's neediest areas. We also support employee fundraising for local causes including Wiltshire Air Ambulance and national charities such as British Heart Foundation and The Alzheimer's Society.

 

Outlook

 

We are confident in the outlook for Alliance. We are putting together a high calibre team within an efficient organisation using class-leading systems to support further profitable transformation over the next few years. In addition we will be investing in Diclectin to provide a new platform for future growth.

 

In terms of the business environment, it is still too early to assess the long-term impact of the UK's decision to renegotiate its relationship with the European Union, which is reported will take considerable time. However, with operations in France, Germany, Italy and Spain, we do not expect market access to be a problem - and all our licences are held within individual member states.

 

For the rest of this year, our focus will be on assimilating the ex-Sinclair business and beginning to exploit the opportunities it opens up for us. We do not anticipate any further substantial acquisitions in the very near term, but remain alert to bolt-on opportunities that add value. As we move through into next year, we will be looking for the kind of product acquisitions and in-licensing deals across Europe, such as Diclectin, that might not have been open to us before. The past six months have begun the transformation of Alliance, and we are encouraged by its progress so far.

 

 

 

Unaudited Consolidated Income Statement

For the six months ended 30 June 2016

 

 

 

 

 

 

        Unaudited        

Six months

ended

30 June 2016

 

 

 

Unaudited 

Six months

ended

30 June 2015

 

 

 

 

 

 

Total

 

 

 

 

Total

 

Note

£ 000s

£ 000s

Revenue

 

46,372

22,795

Cost of sales

 

(20,392)

(8,996)

Gross profit

 

25,980

13,799

 

 

 

 

Operating expenses

 

 

 

Administration and marketing expense

 

(12,862)

(7,232)

Amortisation of intangible assets

 

(84)

(99)

Share-based employee remuneration

 

(404)

(385)

 

 

(13,350)

(7,716)

 

 

 

 

Operating profit

 

12,630

6,083

 

 

 

 

Share of joint venture profits

 

343

26

 

 

 

 

Operating profit including share of joint venture profits

 

12,973

6,109

 

 

 

 

 

 

 

 

Finance Costs

 

 

 

Interest payable and similar charges

4

(1,660)

(722)

Interest income

4

54

35

Other finance income

4

375

102

 

 

(1,231)

(585)

 

 

 

 

Profit on ordinary activities before taxation

 

11,742

5,524

 

 

 

 

Taxation

5

(2,169)

(1,152)

Profit for the year attributable to equity shareholders

 

9,573

4,372

Earnings per share

 

 

 

Basic (pence)

9

2.04

1.65

Diluted (pence)

9

2.02

1.64

 

 

 

 

Unaudited Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2016

 

 

 

 

  Unaudited         

Six months

ended

30 June 2016

Unaudited

Six months

ended

30 June 2015

 

 

 

£ 000s

£ 000s

 

 

 

 

 

Profit for the period

 

 

9,573

4,372

 

Other items recognised directly in equity:

 

 

 

 

 

Items that may be reclassified to profit or loss:

 

Interest rate swaps - cash flow hedge

 

 

(509)

80

Deferred tax on interest rate swaps

 

 

102

(16)

Foreign exchange translation differences

 

 

1,129

(3)

 

 

 

 

 

Total comprehensive income for the period

 

 

10,295

4,433

 

 

 

 

 

 

 

 

Unaudited Consolidated Balance Sheet

As at 30 June 2016

 

 

 

 

Unaudited

30 June 2016

 

Audited

31 December 2015

 

 

Note

 

£000s

 

£000s

Assets

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible assets

6

 

266,830

 

259,945

Property, plant and equipment

 

 

1,182

 

1,013

Joint Venture investment

 

 

1,808

 

1,465

Joint Venture receivable

 

 

1,462

 

1,462

Deferred tax asset

 

 

520

 

418

Other non-current assets

 

 

328

 

122

 

 

 

272,130

 

264,425

Current assets

 

 

 

 

 

Inventories

 

 

16,216

 

12,910

Trade and other receivables

7

 

22,718

 

11,630

Cash and cash equivalents

 

 

3,936

 

3,229

 

 

 

42,870

 

27,769

Total assets

 

 

315,000

 

292,194

 

 

 

 

 

 

Equity

 

 

 

 

 

Ordinary share capital

 

 

4,684

 

4,682

Share premium account

 

 

108,332

 

108,308

Share option reserve

 

 

3,014

 

2,610

Reverse takeover reserve

 

 

(329)

 

(329)

Other reserve

 

 

(505)

 

(98)

Translation reserve

 

 

1,161

 

32

Retained earnings

 

 

51,659

 

47,237

Total equity

 

 

168,016

 

162,442

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Long term financial liabilities

11

 

59,380

 

58,968

Other liabilities

 

 

114

 

1,496

Deferred tax liability

 

 

39,519

 

37,413

Derivative financial instruments

 

 

630

 

120

 

 

 

99,643

 

97,997

Current liabilities

 

 

 

 

 

Cash and cash equivalents

 

 

2,300

 

31

Financial liabilities

11

 

21,269

 

15,776

Corporation tax

 

 

2,022

 

2,075

Trade and other payables

8

 

21,750

 

13,873

 

 

 

47,341

 

31,755

 

 

 

 

 

 

Total liabilities

 

 

146,984

 

129,752

 

 

 

 

 

 

Total equity and liabilities

 

 

315,000

 

292,194

 

 

 

 

 

Unaudited Consolidated Statement of Cash Flows

For the six months ended 30 June 2016

 

 

 

Unaudited

Six months

ended

30 June 2016

Unaudited

Six months

ended

30 June 2015

 

 

£ 000s

£ 000s

 

 

 

 

 

 

 

 

Operating activities

 

 

 

Result for the period before tax

 

11,742

5,524

Interest payable

 

1,660

722

Interest receivable

 

(54)

(35)

Other finance costs

 

(375)

(102)

Depreciation of property, plant and equipment

 

181

136

Amortisation of intangible assets

 

84

99

Share-based employee remuneration

 

404

385

Change in inventories

 

(3,306)

(1,369)

Change in investments

 

(343)

(26)

Change in trade and other receivables

 

(11,088)

(768)

Change in trade and other payables

 

7,429

(815)

Tax paid

 

(2,101)

(964)

Cash flows from operating activities

 

4,233

2,787

 

 

 

Investing activities

 

 

 

Interest received

 

54

35

Payment of deferred consideration

 

(4,503)

-

Development costs capitalised

 

(46)

(7)

Purchase of property, plant and equipment

 

(325)

(248)

Purchase of other intangible assets

 

-

(6,500)

Purchase of other non-current assets

 

(203)

-

Net cash used in investing activities

 

(5,023)

(6,720)

 

 

 

 

Financing activities

 

 

 

Interest paid and similar charges

 

(1,353)

(588)

Loan issue costs

 

(280)

-

Proceeds from exercise of share options

 

26

97

Dividend paid

 

(1,714)

(880)

Receipt from borrowings

 

4,500

5,500

Repayment of borrowings

 

(3,000)

(1,500)

Net cash used in financing activities

 

(1,821)

2,629

 

 

 

 

Net movement in cash and cash equivalents

 

(2,611)

(1,304)

Cash and cash equivalents at beginning of period

 

3,198

1,020

Effects of exchange rate movements

 

1,049

(27)

Cash and cash equivalents at end of period

 

1,636

(311)

 

 

 

 

 

 

 

 

 

Unaudited Consolidated Statement of Changes in Equity

For the six months ended 30 June 2016

 

 

Ordinary Share capital

Share Premium account

Share Option reserve

Reverse takeover reserve

Other reserve

               Translation Reserve

Retained earnings

Total

equity

 

£ 000s

£ 000s

£ 000s

£ 000s

£ 000s

£ 000s

£ 000s

£ 000s

 

 

 

 

 

 

 

 

 

Balance 1 January 2015 (audited)

2,641

29,388

1,995

(329)

(103)

-

37,188

70,780

 

 

 

 

 

 

 

 

 

 

 

Issue of shares

3

94

-

-

-

-

-

97

 

Dividend payable/paid

-

-

-

-

-

-

(2,643)

(2,643)

 

Share options charge

-

-

385

-

-

-

-

385

 

Transactions with owners

3

94

385

-

-

-

(2,643)

(2,161)

 

Profit for the period

-

-

-

-

-

-

4,372

4,372

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

Interest rate swaps - cash flow hedge

-

-

-

-

80

-

-

80

 

Deferred tax on interest rate swaps

-

-

-

-

(16)

-

-

(16)

 

Foreign exchange translation differences

-

-

-

-

-

-

(3)

(3)

 

Total comprehensive income for the period

-

-

-

-

64

 

-

4,369

4,433

 

Balance 30 June 2015 (unaudited)

2,644

29,482

2,380

(329)

(39)

-

38,914

73,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance 1 January 2016 (audited)

4,682

108,308

2,610

(329)

(98)

32

47,237

162,442

 

 

 

 

 

 

 

 

 

 

 

Issue of shares

2

24

-

-

-

-

-

26

 

Dividend payable/paid

-

-

-

-

-

-

(5,151)

(5,151)

 

Share options charge

-

-

404

-

-

-

-

404

 

Transactions with owners

2

24

404

-

-

-

(5,151)

(4,721)

 

Profit for the period

-

-

-

-

-

-

9,573

9,573

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

Interest rate swaps - cash flow hedge

-

-

-

-

(509)

-

-

(509)

 

Deferred tax on interest rate swaps

-

-

-

-

102

-

-

102

 

Foreign exchange translation differences

-

-

-

-

-

1,129

-

1,129

 

Total comprehensive income for the period

-

-

-

-

(407)

 

1,129

9,573

10,295

 

Balance 30 June 2016 (unaudited)

4,684

108,332

3,014

(329)

(505)

1,161

51,659

168,016

 

                     

 

 

 

 

 

Notes to the Half Yearly Report

For the six months ended 30 June 2016

 

1.         Nature of operations

 

Alliance Pharma plc ("the company") and its subsidiaries (together "the Group") acquire, market and distribute pharmaceutical products. The company is a public limited company incorporated and domiciled in England. 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).

 

2.         General information

 

The information in these financial statements does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and is un-audited. 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 period ended 31 December 2015, prepared under International Financial Reporting Standards as adopted by the European Union, 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.

 

This interim financial report for the six month period ended 30 June 2016 (including comparatives for the six months ended 30 June 2015) was approved by the Board of Directors on 13 September 2016.

 

The current rate of cash generation by the Group comfortably exceeds the capital and debt servicing needs of the business (though there cannot, of course, be absolute certainty that the rate of cash generation will be maintained).  The Board remains confident that all the bank covenants will continue to be met for at least the next 12 months.  The Group has a £5m Working Capital Facility of which £2.2m is undrawn at the balance sheet date and which the Board believes should comfortably satisfy the Group's working capital needs for at least the next 12 months.

 

3.         Accounting policies

 

The same accounting policies and methods of computation are followed in the interim financial report as published by the company in its 31 December 2015 Annual Report. The Annual report is available on the company's website alliancepharmaceuticals.com.

 

4.         Finance Costs                      

 

Unaudited

Six months

ended

 30 June 2016

Unaudited

Six months

ended

30 June 2015

 2015

 

£000s

£000s

Interest payable and similar charges

 

 

        On loans and overdrafts

(1,397)

(536)

        Amortised finance issue costs

(177)

(52)

        Notional interest

(86)

(134)

 

(1,660)

(722)

Interest income

54

35

 

 

 

Other finance income

 

 

        Foreign exchange movements

375

102

 

375

102

Finance costs - net

(1,231)

(585)

 

            Notional interest relates to the unwinding of the deferred consideration on the MacuVision acquisition. 

 

 

Notes to the Half Yearly Report (continued)

For the six months ended 30 June 2016

 

5.         Taxation

 

Analysis of charge in period.

 

 

 Unaudited

Six months ended

30 June 2016

 Unaudited

Six months

ended

30 June 2015

 

£ 000s

£ 000s

United Kingdom corporation tax at  20%/20.5%

 

 

    In respect of current period

2,046

920

Current tax

2,046

920

 

 

 

Deferred  tax

123

232

Taxation

2,169

1,152

 

 

 

 

6.         Intangible assets

 

 

Goodwill

Technical know-how, trademarks and distribution rights

Development costs

Total

 

 

£ 000s

£ 000s

£ 000s

£ 000s

Cost

 

 

 

 

 

At 1 January 2016 (audited)

 

26,035

237,324

438

263,797

Additions

 

-

-

47

47

Exchange adjustments

 

-

6,922

-

6,922

At 30 June 2016 (unaudited)

 

26,035

244,246

485

270,766

 

 

 

 

 

 

Amortisation

 

 

 

 

 

At 1 January 2016 (audited)

 

-

3,852

-

3,852

Amortisation for the period

 

-

84

-

84

At 30 June 2016 (unaudited)

 

-

3,936

-

3,936

 

 

 

 

 

 

Net book amount

 

 

 

 

 

At 30 June 2016 (unaudited)

 

26,035

240,310

485

266,830

At 1 January 2016 (audited)

 

26,035

233,472

438

259,945

 

 

 

 

Notes to the Half Yearly Report (continued)

For the six months ended 30 June 2016

 

7.         Trade and other receivables

 

 Unaudited

30 June 2016

 Audited

31 December 2015

 

£ 000s

£ 000s

 

 

 

Trade receivables

19,597

8,783

Other receivables

352

1,062

Prepayments and accrued income

1,710

525

Amounts owed by Joint Venture

1,059

1,260

 

22,718

11,630

 

8.         Trade and other payables

 

 Unaudited

30 June 2016

 Audited

31 December 2015

 

£ 000s

£ 000s

 

 

 

Trade payables

5,829

1,153

Other taxes and social security costs

1,173

905

Accruals and deferred income

6,489

5,663

Other payables

1,262

728

Deferred consideration

2,184

5,026

Amounts due to Joint Ventures

1,375

398

Dividend payable

3,438

-

 

21,750

13,873

 

 

 

Notes to the Half Yearly Report (continued)

For the six months ended 30 June 2016

           

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 year.  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:

 

Six months

ended

30 June 2016

Six months

ended

30 June 2015

 

Weighted average number of shares 000s

Weighted average number of shares 000s

For basic EPS

468,297

264,216

Share options

6,329

3,097

For diluted EPS

474,626

267,313

                                                                                         

 

Six months to

30 June 2016

Six months to

30 June 2015

 

£ 000s

£ 000s

Earnings for basic and diluted EPS

9,573

4,372

 

 

The resulting EPS measures are:

 

Six months to

30 June 2016

Six months to

30 June 2015

 

Pence

Pence

Basic EPS

2.04

1.65

Diluted EPS

2.02

1.64

 

 

 

 

Notes to the Half Yearly Report (continued)

For the six months ended 30 June 2016

 

10.       Dividends

 

Six months

ended

30 June 2016

Six months

ended

30 June 2015

 

 

 

 

 

 

 

 

Pence/share

£ 000s

 Pence/share      £000s

 

 

Amounts recognised as distributions to owners in the year

 

 

 

 

Interim dividend for the prior financial year

0.366

1,714

0.333

880

 

Final dividend for the prior financial year

 

0.734

3,438

0.667

 

1,763

 

 

 

 

 

 

 

5,152

 

2,643

 

 

 

 

 

                     

The final dividend for the prior financial year was approved by the Board of Directors on 31 March 2016 and subsequently by the shareholders at the Annual General Meeting on 25 May 2016. This dividend has been included as a liability as at 30 June 2016, in accordance with IAS 10 Events After the Balance Sheet Date, and was paid on 13 July 2016 to shareholders who were on the register of members at 17 June 2016.

 

 

11.       Borrowings

 

            Movements in borrowings are analysed as follows:  

 

 

Six months

ended

30 June 2016

 £ 000s

 

 

At 1 January 2016 (audited)

74,744

Repayment of borrowings

(3,000)

Revolving Credit Facility drawdown

4,500

Amortisation of prepaid arrangement fees

176

Additional prepaid arrangement fee

(280)

Exchange movements

4,509

At 30 June 2016 (unaudited)

                        80,649

 

 

 

The carrying amount of the group's borrowings are denominated in the following currencies:

 

 Unaudited

30 June 2016

 Audited

31 December 2015

 

£ 000s

£ 000s

 

 

 

GBP

38,581

37,185

USD

27,068

24,324

EUR

15,000

13,235

 

80,649

74,744

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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