Alliance Pharma PLC has announced its interim results for the six months ended 30 June 2023. The company reported that revenue growth for the Kelo-Cote franchise and Nizoral was in line with expectations, while Amberen revenues returned to growth in Q2. However, there were mixed performances in certain smaller products due to regulatory issues and manufacturing delays. In-market demand for Kelo-Cote is expected to continue growing in H2 2023, and the company has extended its distribution agreement to secure its full-year revenue expectations. The board's expectations for the group's performance for the full year remain unchanged.
In terms of financials, the company reported underlying revenue of £82.4 million for the period, a 1% increase compared to the same period last year. Gross profit was £46.9 million, a decrease of 7% compared to the previous year. Profit before taxation was £10.3 million, a decrease of 48% compared to the previous year. Basic earnings per share were 1.58p, a decrease of 46% compared to the previous year. The company reported robust free cash flow of £11.0 million and a decrease in net debt to £94.5 million.
The company highlighted that the revenue growth in H1 2023 was impacted by Kelo-Cote destocking in China and temporary manufacturing delays due to regulatory issues in certain smaller products. However, in-market demand for Kelo-Cote in China is recovering, with market share gains seen in e-commerce channels. The consumer healthcare segment saw a 1% increase in revenue, driven by strong growth in Nizoral. Prescription medicine revenues decreased by 7% on a constant exchange rate basis.
Alliance Pharma also provided an update on its business development activities. Nizoral is gaining market share in China, supported by new marketing campaigns and refreshed packaging. Amberen is returning to growth, with a new product range extension set to launch in Q4 2023. The company has launched new TV advertising campaigns for Kelo-Cote in the UK and MacuShield in Ireland. It has also made significant progress in brand innovation, with further range enhancement expected in Q4 2023. The company has successfully rolled out its ERP system in APAC, with plans to roll it out in China in 2024.
In terms of sustainability, Alliance Pharma has offset all scope 1 and 2 emissions for 2022 through carbon credits and has started fitting photovoltaic panels to its headquarters in Chippenham, UK, as part of its goal to become net zero for scope 1 and 2 emissions by 2030.
CEO Peter Butterfield commented on the results, stating that the recovery in China and the market share gains made by Kelo-Cote are encouraging. He also mentioned the progress of Nizoral and the robust platform provided by the wider portfolio of consumer healthcare brands. Butterfield expects strong sales growth in H2 2023 as marketing campaigns yield benefits and new products are launched to grow market share. The company anticipates continued strong free cash flow and a reduction in net debt and leverage by the end of the year. The board's expectations for full-year operating performance remain unchanged.