Alliance Pharma (APH) H1 2024 earnings summary

Executive summary

• New CEO appointed in May 2024, bringing extensive consumer health experience and initiating organizational changes to accelerate growth and decision-making.

• Achieved 5% constant currency revenue growth in H1 2024, with see-through revenues of £84.8m, led by strong Kelo-Cote performance; on track to meet full-year guidance.

• Focus on building a high-performing consumer health business with a consumer-first mindset, enhanced innovation, and global category expansion.

• Gross margin expanded to 59.8% from 56.8% year-over-year, supporting increased investment in marketing and innovation.

• Three significant product launches in H1: Amberen Energy, Mood and Sleep gummy, MacuShield Omega 3, and ScarAway Kids gel.

Financial highlights

• H1 2024 revenues up 3% reported to £84.8m, 5% at constant currency; gross margin rose 300bps to 59.8%.

• EBITDA increased 6% to £19.1m (22.5% margin); underlying profit before tax up 23% to £12.7m.

• Underlying basic EPS up 14% to 1.8p; free cash flow for H1 was £8.8m.

• Net debt reduced by £8m to £83.2m; leverage down to 1.81x from 2.05x at 2023 year-end.

• Reported profit after tax declined 8.7% to £4.7m due to non-underlying items including amortisation and impairment.

Outlook and guidance

• Full-year 2024 guidance unchanged; underlying profits expected in line with 2023.

• Leverage targeted to fall to around 1.5x by year-end, with further reduction to below 1x by end of 2025.

• Continued focus on cash generation, debt reduction, and investment in marketing, innovation, and talent.

• Dividend remains paused to prioritize debt reduction.

• Technical guidance: share-based payments £1m–£2m, depreciation/amortisation £3m–£4m, interest cost £9m–£10m, capex £1m–£2m, net bank debt £65m–£75m.