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Alliance Pharma will ‘continue adding brands’ after a 166% jump in first half profits

Alliance Pharma (LON: APH) has revealed ‘yet another’ set of record financial results

, with a 77% increase in first half sales to £23.4m (H109: £13.2m) and a dramatic 166% rise in pretax profit to £7.7m (H109: £2.9m).

"We are delighted to announce yet another set of record results, reflecting a strong performance from the existing business and the benefits of two significant acquisitions,” Alliance chairman Michael Gatenby said.

In his statement, Gatenby highlighted that the company intends to continue adding brands that fit its growth strategy, and it is well placed to fund further acquisitions, when they find the right deals.

Alliance Pharma was founded in 1998, and since then the acquisitive pharmaceutical company has established a strong track record of acquiring the rights to established niche products. 

Most recently, the company added 18 new prescription products to its portfolio through the Cambridge Laboratories acquisition in February 2010.

Specifically, through its growth strategy Alliance aims to acquire or license established prescription products in niche areas that are “too small to attract competition, with the majority requiring little or no promotional support”.

“As we anticipated ...2010 is proving to be an outstanding year for Alliance,” Gatenby stated.

“In the first half of the year sales have grown strongly, benefiting from the Cambridge Laboratories acquisition in February, an initial first half year contribution from Buccastem and Timodine”

“The business is trading very profitably and generating such strong cash flow that net debt has reduced during the first half despite the investment in acquiring Cambridge Laboratories.”

In the six months ended 30th June 2010, Alliance’s strong sales performance
has seen adjusted earnings per share (NYSEARCA:EPS) almost double, rising 98% to 2.54p (H109: 1.28p). Similarly, operating cash flow grew by more than 100% to £7.8m (H109: £3.7m).

Gross margin was 61%, which is in line with the preceding six-months and up from the 53% reported for the comparative period of 2009.

Due to this record performance, Alliance has decided to increase its interim dividend by 143% to 0.17 pence per share (H109: 0.07 pence).

Alliance currently owns or licenses over 50 prescription products across a broad range of therapeutic areas – including ‘Anti Infective’, Cardiovascular, Obstetrics & Gynaecology, Toxicology, Oncology, Rheumatology and many others.

In reference to its outlook, Alliance said it is “well on the way to making 2010 another record year”.

“In uncertain times our non-promoted portfolio, which is largely unaffected by economic conditions, provides a continuing source of stability ... our increasingly substantial portfolio of promoted products has enhanced growth potential.”

“In addition, Alliance is well positioned to take advantage of current market conditions by seeking out further acquisition opportunities”.