REG - Alliance Pharma PLC - Preliminary Results
08/04/2025 07:00
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RNS Number : 0085E Alliance Pharma PLC 08 April 2025
For immediate release
8 April 2025
ALLIANCE PHARMA PLC
("Alliance" or the "Group")
Preliminary Results for the year ended 31 December 2024
Performance in line with expectations
Alliance Pharma plc (AIM: APH), the international healthcare group, presents
its preliminary results for the year ended 31 December 2024 (the "Year" or the
"Period"). As previously communicated in our full year trading update on 31
January 2025, underlying Group profit in FY2024 was in-line with FY2023,
in-line with expectations for the Year. With structural changes implemented to
improve efficiency, and a number of new senior management hires, the Group is
well positioned for growth over the medium term.
FINANCIAL SUMMARY
Year ended 2024 2024 2023 2023 Growth underlying Growth reported(1)
Underlying (£m) Reported (£m) Underlying (£m) Reported (£m)
Revenue (see-through basis)(1) 180.3 180.3 182.7 182.7 -1% -1%
Revenue (statutory basis) 178.8 178.8 180.7 180.7 -1% -1%
Gross profit 109.3 109.3 105.0 105.0 4% 4%
Profit/(loss) before taxation ("PBT") 31.5 (14.5) 31.5 (48.8) 0% NM(2)
Basic earnings per share (p) 4.4 (2.0) 4.6 (6.1) -4% NM(2)
Free cash flow(1) 29.1 21.3 37%
Cash from operations 44.3 36.9 20%
Net debt(1,3) 60.1 91.2 -34%
OPERATING AND FINANCIAL SUMMARY
· Group see-through revenue(1) of £180.3m (2023: £182.7m), up 1% at
constant exchange rates ("CER"). Group statutory revenue of £178.8m (2023:
£180.7m), up 2% CER.
· Strong growth in Kelo-Cote(TM), Aloclair(TM) and MacuShield(TM),
although declines in other Consumer Healthcare brands, namely Nizoral(TM), led
to see through Consumer Healthcare revenues down 2% CER to £130.7m (2023:
£136.4m).
· Prescription Medicine revenues of £49.6m (FY23: £46.3m), up 8%
CER, with strong growth in Hydromol(TM) and Forceval(TM,) offsetting weakness
in Lefuzhi(TM) and Ashton & Parsons(TM).
· Underlying PBT of £31.5m in-line with prior year (2023: £31.5m) as
expected and reported loss before tax of £14.5m (2023: £48.8m loss)
following non-underlying items before tax of £46.0m (2023: £80.3m),
principally intangible amortisation and impairment charges.
· Free cash flow increased 37% to £29.1m (2023: £21.3m).
· Net debt reduced to £60.1m moving Group leverage to 1.39x at 31
December 2024 (1.81x at 30 June 2024, 2.05x at 31 December 2023).
DEVELOPING OUR BUSINESS
· Senior management changes implemented to improve efficiency, to
bring the consumer closer to the heart of the business and to accelerate
decision making.
· Portfolio streamlined with the divestment of eight tail-end brands for
£2.8m in December 2024 and the discontinuation of six brands.
· Innovation pipeline continues to deliver with 4.9% of consumer
health sales from products launched within three years (2023: 2.6%).
Significant new launches in the year include Nizoral(TM) Derma Daily,
Amberen® gummies and MacuShield Omega 3.
· 60% reduction in Scope 1 and 2 emissions (versus 2018 baseline), on
track to meet interim 65% reduction target by 2025 and achieve net zero in
2030. 15% reduction in Scope 3 emissions (versus 2022 baseline), on track to
meet interim reduction target of 25% by 2030.
· Re-certified as a Great Place To Work® in UK, France, China and
Singapore.
· Successful appeal of Competition and Markets Authority ("CMA")
decision in May 2024, clearing Alliance, and former CEOs Peter Butterfield and
John Dawson, of any wrongdoing.
· On 10 January 2025 we announced a recommended acquisition of the
Group by Aegros Bidco Ltd, a newly incorporated company indirectly owned by
DBAY Affiliates, our largest shareholder, and the ERES IV Fund. The requisite
number of shareholders voted to accept this offer on 13 March 2025 and we
expect that Alliance will cease trading on AIM by end H1 2025.
Commenting on the results, Nick Sedgwick, Chief Executive Officer ("CEO") of
Alliance, said:
"2024 has been an important year for Alliance as we implemented the necessary
changes to accelerate decision making and to bring the consumer closer to the
heart of the business. I am delighted by the number of highly skilled senior
managers that have joined Alliance, many of whom have already made a
significant impact on the business, and I see further opportunity to deliver
efficiency gains and capability improvements over time."
(1) The performance of the Group is assessed using Alternative Performance
Measures ("APMs"), which are measures that are not defined under IFRS, but are
used by management to monitor ongoing business performance against both
shorter term budgets and forecasts and against the Group's longer term
strategic plans. APMs are defined in note 14.
Specifically, see-through revenue includes all sales from Nizoral as if they
had been invoiced by Alliance as principal. For statutory accounting purposes
the product margin relating to Nizoral sales made on an agency basis is
included within Revenue, in line with IFRS 15.
Underlying measures exclude certain items classed as non-underlying to allow
the Group's financial performance to be compared against the majority of its
peers. For further detail on non-underlying items please see note 4.
(2). Not meaningful to show as a percentage movement given the significant
changes in numbers which have been explained elsewhere
(3) Net debt excludes lease liabilities
For further information:
Alliance Pharma plc + 44 (0)1249 466966
Head of Investor Relations & Corporate Communications: + 44 (0)1249 705168
Cora McCallum
ir@allianceph.com
Burson Buchanan + 44 (0)20 7466 5000
Mark Court / Sophie Wills
alliancepharma@buchanan.uk.com
Deutsche Numis (Nominated Adviser and Joint Broker) + 44 (0)20 7260 1000
Freddie Barnfield / Duncan Monteith / Sher Shah
Investec Bank plc (Joint Broker) + 44 (0) 20 7597 5970
Patrick Robb / Maria Gomez de Olea
About Alliance
Alliance Pharma plc (AIM: APH) is a growing consumer healthcare company. Our
purpose is to empower people to make a positive difference to their health and
wellbeing by making our trusted and proven brands available around the world.
We deliver organic growth through investing in our priority brands and
channels, in related innovation, and through selective geographic expansion to
increase the reach of our brands. Periodically, we may look to enhance our
organic growth through selective, complementary acquisitions.
Headquartered in the UK, the Group employs around 290 people based in
locations across Europe, North America, and the Asia Pacific region. By
outsourcing our manufacturing and logistics we remain asset-light and focused
on maximising the value we can bring, both to our stakeholders and to our
brands.
For more information on Alliance, please visit our website:
www.alliancepharmaceuticals.com (http://www.alliancepharmaceuticals.com)
Trading performance
The Group delivered see-through(1) revenues in the Period of £180.3m (FY23:
£182.7m), up 1% at constant exchange rates ("CER") and down 1% on a reported
basis versus the prior period. Whilst revenues declined in some of our brands,
namely Nizoral, we delivered strong performance in Kelo-Cote, MacuShield,
Hydromol, Aloclair and Forceval.
Group revenue was adversely affected by exchange rate movements throughout
2024, principally the strengthening of Sterling against the US Dollar and
Euro, which decreased see-through revenue by approximately £3.4m. Statutory
revenue decreased 1% to £178.8m (2023: £180.7m).
Revenue summary
Year ended 31 December 2024 2023 Growth CER growth
£m £m
Kelo-Cote franchise 65.4 63.2 4% 6%
Amberen 10.1 11.2 -10% -7%
Nizoral* 16.4 21.7 -24% -21%
MacuShield 10.2 9.2 11% 11%
Other Consumer brands 28.6 31.1 -8% -6%
Total Consumer Healthcare 130.7 136.4 -4% -2%
Hydromol 10.3 9.0 14% 14%
Other Prescription Medicines 39.3 37.3 5% 6%
Total Prescription Medicines 49.6 46.3 7% 8%
See-through revenue 180.3 182.7 -1% 1%
Statutory revenue - Consumer Healthcare 129.2 134.3 -4% -2%
Statutory revenue - Group 178.8 180.7 -1% 2%
*Nizoral statutory revenue includes revenue generated on an agency basis.
Nizoral revenue presented on a see-through income statement basis is included
as an alternative performance measure in note 14.
Consumer Healthcare
Total Consumer Healthcare see-through revenues for the Year were £130.7m
(2023: £136.4m), down 4% on the prior year (-2% CER). On a statutory basis,
reported Consumer Healthcare revenues were £129.2m, down 4% from the previous
year (2023: £134.3m) and down 2% CER.
Kelo-Cote franchise revenues grew 6% CER to £65.4m (FY23: £63.2m) in-line
with previous guidance of mid-single digit revenue growth. Whilst we remain
committed to moving to smaller, more regular orders in China, this is taking
longer than anticipated.
Nizoral see-through revenues declined 21% CER to £16.4m (FY23: £21.7m) due
to the timing of distributor orders. Amberen revenues declined 7% CER to
£10.1m (FY23: £11.2m) due to softer trading on Amazon following the loss of
the Buy Box to unauthorised resellers, which has now been resolved, and slower
adoption of new product development than anticipated.
MacuShield revenues grew 11% CER to £10.2m (2023: £9.2m) boosted by new
product launches in addition to increased focus and investment to optimise
Amazon distribution in the UK.
Other Consumer brands declined 6% CER to £28.6m (FY23 restated: £31.1m) due
to weakness in Lefuzhi and Ashton & Parsons.
Prescription Medicines
Prescription Medicine revenues increased 8% CER to £49.6m (FY23: £46.3m).
Hydromol revenues increased 14% CER to £10.3m (FY23: £9.0m) as we launched
our first ever direct to consumer communications campaign to target consumers
and boost sales via Amazon. Forceval delivered another solid performance with
revenues up 20% CER to £7.9m (FY23: £6.6m), and Other Prescription Medicines
revenue showed strong recovery as previously out of stock products became
available.
Profit and loss development
Whilst see-through revenues decreased 1% in the Year, gross profit increased
4% to £109.3m (2023: £105.0m) due to favourable product mix and a reduction
in COGS relating to Nizoral following the move in manufacturing. Gross margin
increased by 310 basis points to 60.6% of see-through revenue (2023: 57.5%)
and gross margin relative to statutory revenue was 61.1% (2023: 58.1%).
However, with a deliberate focus on increasing investment to support our key
brands and operations, operating costs (defined as underlying administration
and marketing expenses, excluding depreciation and underlying amortisation
charges) increased 9% versus the prior year to £64.5m (2023: £59.1m).
With a £0.8m increase in share option charges versus prior year (2024:
£1.6m, 2023: £0.9m) underlying earnings before interest, taxes,
depreciation, and underlying amortisation (EBITDA) decreased 4% to £43.1m
(2023: £45.0m), whilst underlying operating profit (EBIT) decreased by 5% to
£39.9m (2023: £41.9m). Reported operating loss decreased by £30.3m to give
an £8.1m loss (2023: £38.4m loss), after non-underlying items of £48.0m
(2023: £80.3m).
Net finance costs of £8.4m (2023: £10.4m) include a £0.8m decrease in
interest payable to £9.2m (2023: £10.0m), due to lower debt balances, with
net exchange gains of £0.8m (£0.5m loss in 2023).
As a result of lower finance costs, underlying profit before tax was unchanged
at £31.5m (2023: £31.5m), resulting in a 30 basis point margin increase to
17.5% of see-through revenues (2023: 17.2%). Reported profit before tax
increased to a £14.5m loss (2023: £48.8m loss), primarily due to lower
non-underlying impairment charges in 2024.
With an underlying tax charge of £7.9m (2023: £6.9m) equating to an
underlying effective tax rate of 25.2% (2023: 22.0%), underlying basic
earnings per share decreased 4% to 4.36p (2023: 4.55p). Reported basic
earnings per share was a loss of 1.99p (2023: 6.13p loss) a reduced loss
versus the prior year due to the lower impact from non-underlying items on
reported earnings in 2024 versus 2023.
Further detail on non-underlying items is provided below and in note 4.
Non-underlying items
Non-underlying items in the year principally comprised impairment charges
identified as a result of the annual impairment review, amortisation charges
for Prescription Medicines and certain other brand assets, together with
restructuring costs (see note 4).
For 2024, net impairment charges of £36.5m (2023: £79.3m) includes a charge
of £23.5m in relation to Amberen (2023: £46.4m), together with £13.0m (net
of £2.4m impairment reversals) relating to a number of other products and
associated goodwill. These impairments were driven by changes to their
financial outlook and updates to central overhead allocations.
Following a comprehensive review of our portfolio to identify brands that were
highly complex to maintain, had high risk of unreliable supply and yielded low
profitability, we made the decision to discontinue six assets and divest
eight. The disposal of these eight brands yielded cash proceeds of £2.8m in
December 2024 and a profit on disposal (net of costs to sell and residual net
book value of disposed assets) of £2.4m, which has been included as a
non-underlying item.
Balance sheet development
Intangible assets decreased by £46.4m in the year to £253.6m (31 December
2023: £300.0m) reflecting net non-underlying amortisation and impairment
charges of £43.0m, underlying amortisation of £1.9m, exchange rate-related
revaluation adjustments of £0.7m and £0.8m net book value of disposals.
Net working capital at 31 December 2024 was £40.1m, a decrease of £3.3m on
that at the start of the year (31 December 2023: £43.4m).
Inventories, net of provisions, decreased £3.2m to £22.5m at 31 December
2024 (31 December 2023: £25.7m).
Trade and other receivables decreased by £5.3m to £49.4m, reflecting the
timing of sales and cash receipts in the second half of the year, versus the
equivalent period in 2023. Trade and other payables decreased £5.2m on the
prior year to £31.8m.
Cash generation
Free cash flow (see note 14 for definition) for the year rose 37% to £29.1m
(2023: £21.3m), due to the strong trading performance in H2 and improved
working capital. Cash generated from operations increased by 20% to £44.3m
(2023: £36.9m).
This solid cash generation supported a reduction in net debt (excluding lease
liabilities) of £31.1m to £60.1m at 31 December 2024 (31 December 2023:
£91.2m), with Group leverage (the ratio of net bank debt to EBITDA)
decreasing to 1.39 times (31 December 2023: 2.05 times). Interest rate cover
(the ratio of EBITDA to finance charges) increased to 5.03 times (31 December
2023: 4.82 times) reflecting the decrease in net interest cost on lower debt.
Net debt and Group leverage are both expected to fall further during 2025,
with Group leverage expected to be below 1.0 times by the end of 2025.
Corporate developments
The arrival of our new CEO, Nick Sedgwick, in May 2024, has provided fresh
perspective. Whilst the business has transitioned to a predominantly consumer
healthcare company, much of the infrastructure and mindset had remained more
aligned with the legacy prescription medicines business. Consequently, we are
working to adapt the Company's culture and capabilities to support our
ambition to become a high-performing consumer healthcare company, placing the
consumer firmly at the heart of all strategic decisions.
This change of focus and refined strategy means we have moved away from
referring to the three key brands we have previously mentioned (the Kelo-Cote
franchise, Nizoral and Amberen) and, from mid-2024, we pivoted our corporate
strategy to focus on five strategic priority categories (scar care, scalp
care, dry skin care, eye health and women's health) which align with our five
largest brands in revenue terms (Kelo-Cote, Nizoral, Hydromol, MacuShield and
Amberen).
Throughout 2024 we restructured the senior leadership team to remove layers of
complexity and to bring key functions closer to the CEO. The senior leadership
team, which we now call the Executive Committee, now comprises 12 people, up
from five previously, of which 58% are female, up from 20%. To underline our
commitment to globalising the business, five of these roles are based outside
the UK.
On 23 May 2024 we announced the successful conclusion of our appeal before the
Competition Appeal Tribunal ("CAT") of a decision by the UK's CMA. In a
unanimous judgment, the CAT upheld Alliance's appeal, finding that there was
no agreement to exclude competition from the market and no breach of
competition law. The CMA's decision and £7.9m penalty imposed on Alliance
have been set aside. In particular, the CAT found that Alliance's two key
witnesses, former Alliance CEOs Peter Butterfield and John Dawson, were both
impressive and compelling, with their evidence singled out by the Tribunal in
its concluding remarks. Director disqualification proceedings brought by the
CMA against Peter and John, the first limb of which was joined to the appeal,
have also fallen away. The CMA has confirmed that it will not appeal the CAT
decision.
In 2021 we provided for the potential penalty but reversed this provision in
the FY2023 accounts.
On 10 January 2025 we announced the recommended cash offer by DBAY Advisors
Ltd for the entire issued and to be issued share capital of Alliance. This
offer was accepted by shareholders on 13 March with 80% of shareholders,
holding 92% of voted shares in value, voting in favour of the transaction. We
will now work through the remaining regulatory steps and anticipate that
Alliance will cease trading on AIM by the end of H1 2025.
Innovation and Development (I&D)
We continue to actively invest in our business to maintain strong organic
revenue growth and currently spend some £1m-£2m per annum on I&D, with a
view to generating 10% of net consumer sales from new product innovation in
the future. However, this is one area in which we anticipate increasing
investment to accelerate growth and have appointed a Chief Innovation and
Scientific Affairs Officer, who joined Alliance in January 2025, to support
this ambition.
In 2024, revenues from new product development reached £6.4m (2023: £3.5m),
representing 4.9% of consumer health care sales (2023: 2.6%).
We launched three significant new products during 2024, all of which provide
potential for significant organic growth in future years.
The latest gummy in the Amberen range, Amberen Energy, Mood and Sleep, was
launched in the US in Q2 24 targeting the perimenopausal consumer. We have
partnered with Walmart to promote the product on its social media platforms,
and are working with a leading social media influencer, Dr. Eva Beaulieu, to
expand the brand's reach.
In the UK, we have expanded the MacuShield range with the launch of MacuShield
Omega 3. The product was first placed in Boots, both in store and online, then
listed on Amazon from May 2024 ahead of Prime Day in July 2024. The launch was
supported by an extensive PR campaign and is expected to broaden the brand's
reach rather than cannibalise sales of the base brand.
In September 2024 we launched Nizoral Derma Daily, to expand the reach of the
medicated anti-dandruff Nizoral brand into the larger, adjacent, derma
cosmetic market. The initial launch focussed on Thailand, Taiwan, Singapore,
Hong Kong and Malaysia. We expect to launch in China in 2025.
In addition, ScarAway Kids scar gel was launched in the US on Amazon in late
February 2024 expanding the range of the flagship gel listing.
Continuing our sustainability journey
We continue to make good progress on our sustainability journey, publishing
our third, voluntary, stand-alone TCFD report for 2024 by end June 2025.
Throughout 2024 we have focused on developing our social and governance
strategies. Having established a partnership with Slave Free Alliance (SFA) in
2023, in H1 2024, the SFA conducted a high-level risk assessment on 15
suppliers deemed most at risk from a modern slavery perspective. In H2 2024 we
fulfilled our ambition to conduct at least five modern slavery audits in
person from this group of 15 high risk suppliers, of which four were completed
in H1 2024, and one in H2 2024, with no red flags. We anticipate conducting
another five audits in 2025 from the remaining ten high risk suppliers we have
identified.
We have also joined the UN Global Compact, which is the world's largest global
corporate sustainability initiative. This commits Alliance to meet fundamental
responsibilities in the four areas of human rights, labour, the environment
and anti-corruption.
During the Period, we were pleased to have completed the NHS Evergreen
Sustainable Supplier Assessment. This self-assessment and reporting tool
resulted in Alliance receiving a level 2 accreditation recognising our
comprehensive net zero targets and reporting for carbon emissions. This
accreditation is key to remaining a trusted provider to the NHS, supporting us
to align with their long-term sustainability priorities and their pathway to
net zero emissions.
For further detail, please see the Sustainability section of our website.
Building a strong alliance of colleagues
Our business, and the delivery of our strategy, is only possible due to our
network of talented, dedicated colleagues. Throughout 2024 we restructured the
senior leadership team.
The Chief Operating Officer role has been removed, to streamline the
management structure and accelerate decision making, and both the Heads of
North America and China have been replaced to support our growth ambitions.
A Chief Transformation Officer was appointed in December 2024; she has spent
the first three months of 2025 reviewing all existing structures and processes
to identify opportunities to optimise our approach and to drive scale
benefits.
Further senior appointments in early 2025 include a Chief Marketing Officer,
Chief Innovation and Scientific Affairs Officer and Chief Supply Officer.
We are working to develop a comprehensive people strategy and have begun to
develop our belonging and inclusion policy, partnering with an external
consultant to conduct a baseline assessment to inform our future strategy. We
have introduced belonging and inclusion questions within our new exit
interview procedure as part of a plan to understand and improve diversity
metrics beyond our annual engagement survey. We have also introduced a
Celebration Day as part of our employee offering, which gives all colleagues
an additional day off in the year to celebrate an event of their choice to
promote diversity in lifestyle, cultural or religious beliefs.
Work continues on our recognition and reward program with three new awards to
recognise outstanding behaviour and performance through peer-to-peer, manager
and Executive Committee team rewards. We have also launched a global wellness
programme which includes training for mental health first aiders in each of
our locations and a schedule of wellness webinars.
Our investment in colleague engagement continues to pay dividends as evidenced
by our re-certification as a Great Place to Work in the UK, France, China and
Singapore. In the 2024 survey we were pleased to have received an overall
Trust Index rating of 70% (2023: 74%) with 67% of participants globally saying
that Alliance was a Great Place to Work (2023: 73%).
On behalf of the Board, we would like to thank all those colleagues who helped
us to deliver our achievements in 2024.
Board and executive changes
As announced in February 2024, Jo LeCouilliard stepped down from the Board
with the appointment of Camillo Pane as the new independent Chair of Alliance
that month. Camillo Pane has over 30 years of relevant sector experience. He
has held a number of senior positions at Reckitt Benckiser, including Senior
Vice President and Global Category Officer for Consumer Health, before moving
to Coty Inc, one of the largest beauty companies in the world, where, as CEO,
he led the merger with Procter & Gamble Specialty Beauty. Most recently,
he was Group CEO of Health & Happiness Group, a global health and
nutrition company listed on the Hong Kong Stock Exchange with revenues of
around $2bn.
On 8 May 2024 we announced that Peter Butterfield, CEO, had decided to leave
the business and, on 13 May 2024, Nick Sedgwick joined as Alliance's new CEO.
Nick brings 30 years of consumer goods experience predominantly in health
across European, US and global roles at major multinational companies such as
Reckitt, Coty and Nestlé. Most recently Nick was Regional Director for UK and
Ireland Consumer Health at Reckitt during which time he increased revenue and
improved profitability in the second largest market for the company. Prior to
this, Nick worked at Coty holding a number of senior roles including Senior
Vice President for Global Sales and Commercial Capabilities, Senior Vice
President Sales for the US business and General Manager Consumer Beauty for UK
and Ireland. Throughout his career, Nick has worked in multiple countries,
always delivering high revenue growth through consumer-centric strategies,
high performance teams and excellence in execution.
In order to accelerate the globalisation of the business, simplify the
management structure and to bring the consumer closer to the heart of the
business, the Board decided that the role of COO was no longer required.
Consequently, Jeyan Heper left the business on 31 August 2024.
Outlook for 2025
Group performance in the three months to end March is in-line with the Board's
expectations. With our strategic transformation now well underway we
anticipate an acceleration in organic revenue growth and further efficiency
gains over the medium term.
INCOME STATEMENT
Note Year ended 31 December 2024 Year ended 31 December 2023
Underlying Non-Underlying Total Underlying Non-Underlying Total
£000s £000s £000s £000s £000s £000s
(Note 4) (Note 4)
Revenue 2, 14 178,836 - 178,836 180,680 - 180,680
Cost of sales (69,550) - (69,550) (75,661) - (75,661)
Gross profit 109,286 - 109,286 105,019 - 105,019
Operating expenses
Administration and marketing expenses 4 (65,839) (5,009) (70,848) (60,366) 6,147 (54,219)
Amortisation of intangible assets 4 (1,908) (6,469) (8,377) (1,903) (7,198) (9,101)
Impairment of goodwill and intangible assets 4 - (38,896) (38,896) - (79,252) (79,252)
Impairment reversals of goodwill and intangible assets 4 - 2,383 2,383 - - -
Share-based employee remuneration (1,646) - (1,646) (889) - (889)
Operating profit/(loss) 39,893 (47,991) (8,098) 41,861 (80,303) (38,442)
Finance expense 5 (9,225) - (9,225) (10,471) - (10,471)
Finance income 5 837 - 837 113 - 113
Net finance expense (8,388) - (8,388) (10,358) - (10,358)
Profit on disposal of intangible assets 4 - 2,026 2,026 - - -
Profit/(loss) before taxation 3 31,505 (45,965) (14,460) 31,503 (80,303) (48,800)
Taxation 4, 6 (7,925) 11,656 3,731 (6,915) 22,579 15,664
Loss for the period attributable to equity shareholders 23,580 (34,309) (10,729) 24,588 (57,724) (33,136)
Earnings per share
Basic (pence) 8 4.36 (1.99) 4.55 (6.13)
Diluted (pence) 8 4.32 (1.99) 4.54 (6.13)
All of the activities of the Group are classed as continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 December 2024 31 December 2023
£000s £000s
Loss for the year (10,729) (33,136)
Other comprehensive income
Items that may be reclassified to profit or loss
Foreign exchange translation differences (gross) (1,177) (6,221)
Foreign exchange translation differences (deferred tax) 319 1,202
Interest rate swaps - cash flow hedge (gross) 1,116 (1,771)
Interest rate swaps - cash flow hedge (deferred tax) (279) 443
Foreign exchange forward contracts - cash flow hedge (gross) (1,580) 497
Foreign exchange forward contracts - cash flow hedge (deferred tax) 395 (122)
Total comprehensive deficit for the year (11,935) (39,108)
CONSOLIDATED BALANCE SHEET
Note 31 December 2024 31 December 2023
£000s £000s
Assets
Non-current assets
Goodwill and intangible assets 9 253,608 299,978
Property, plant and equipment 5,436 5,721
Deferred tax 5,645 4,648
Derivative financial instruments - 77
Other non-current assets 122 404
264,811 310,828
Current assets
Inventories 22,519 25,711
Trade and other receivables 49,380 54,716
Derivative financial instruments 69 1,232
Cash and cash equivalents 32,360 22,436
104,328 104,095
Total assets 369,139 414,923
Equity
Ordinary share capital 12 5,406 5,404
Share premium account 151,703 151,684
Share option reserve 12,844 11,159
Other reserve (329) (329)
Cash flow hedging reserve (1,170) (822)
Translation reserve 6,553 7,411
Retained earnings 32,637 43,366
Total equity 207,644 217,873
Liabilities
Non-current liabilities
Loans and borrowings 10 92,477 113,646
Derivative financial instruments 759 1,771
Other liabilities 2,822 3,200
Deferred tax liability 28,746 37,863
124,804 156,480
Current liabilities
Corporation tax 2,738 2,454
Trade and other payables 31,844 37,066
Derivative financial instruments 1,130 413
Provisions 11 979 637
36,691 40,570
Total liabilities 161,495 197,050
Total equity and liabilities 369,139 414,923
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary share capital Share premium account Other reserve Cash flow hedging reserve Translation reserve Share option reserve Retained earnings Total equity
£000s £000s £000s £000s £000s £000s £000s £000s
Note
Balance 1 January 2023 5,400 151,650 (329) 131 12,430 10,141 86,094 265,517
Issue of shares 12 4 34 - - - - - 38
Dividend paid 7 - - - - - - (9,592) (9,592)
Share options charge (including deferred tax) - - - - - 1,018 - 1,018
Transactions with owners 4 34 - - - 1,018 (9,592) (8,536)
Loss for the year - - - - - - (33,136) (33,136)
Other comprehensive income
Interest rate swaps - cash flow hedge (net of deferred tax) - - - (1,328) - - - (1,328)
Foreign exchange forward contracts - cash flow hedge (net of deferred tax) - - - 375 - - - 375
Foreign exchange translation differences (net of deferred tax) - - - - (5,019) - - (5,019)
Total comprehensive deficit for the year - - - (953) (5,019) - (33,136) (39,108)
Balance 31 December 2023 5,404 151,684 (329) (822) 7,411 11,159 43,366 217,873
Balance 1 January 2024 5,404 151,684 (329) (822) 7,411 11,159 43,366 217,873
Issue of shares 12 2 19 - - - - - 21
Share options charge (including deferred tax) - - - - - 1,685 - 1,685
Transactions with owners 2 19 - - - 1,685 - 1,706
Loss for the year - - - - - - (10,729) (10,729)
Other comprehensive income
Interest rate swaps - cash flow hedge (net of deferred tax) - - - 837 - - - 837
Foreign exchange forward contracts - cash flow hedge (net of deferred tax) - - - (1,185) - - - (1,185)
Foreign exchange translation differences (net of deferred tax) - - - - (858) - - (858)
Total comprehensive deficit for the year - - - (348) (858) - (10,729) (11,935)
Balance 31 December 2024 5,406 151,703 (329) (1,170) 6,553 12,844 32,637 207,644
CONSOLIDATED CASH FLOW STATEMENT
Note Year ended Year ended
31 December 2024 £000s 31 December 2023
£000s
Cash flows from operating activities
Cash generated from operations 13 44,291 36,934
Tax paid (5,575) (5,524)
Cash flows from operating activities 38,716 31,410
Investing activities
Interest received 62 -
Acquisitions and deferred consideration - (222)
Purchase of property, plant and equipment (841) (696)
Proceeds from the disposal of intangible assets 2,835 -
Net cash from/(used in) investing activities 2,056 (918)
Financing activities
Interest paid and similar charges (8,798) (9,433)
Capital lease payments (853) (867)
Proceeds from exercise of share options 21 37
Dividend paid 7 - (9,592)
Loan issue costs (19) (1,338)
Repayment of borrowings (21,235) (18,000)
Net cash provided used in financing activities (30,884) (39,193)
Net movement in cash and cash equivalents 9,888 (8,701)
Cash and cash equivalents at 1 January 22,436 31,714
Exchange losses on cash and cash equivalents 36 (577)
Cash and cash equivalents at 31 December 32,360 22,436
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2024
1. General information
Alliance Pharma plc ("the Company") and its subsidiaries (together "the
Group") acquire, market and distribute consumer healthcare products and
prescription medicines. The Company is a public limited Company, limited by
shares, registered, incorporated and domiciled in England and Wales in the UK.
The address of its registered office is Avonbridge House, Bath Road,
Chippenham, Wiltshire, SN15 2BB. The Company is listed on the AIM Stock
Exchange. These consolidated financial statements have been approved for issue
by the Board of Directors on 7 April 2025.
The financial information set out in the announcement does not constitute the
Group's statutory accounts for the year ended 31 December 2024 or 31 December
2023. The auditors reported on those accounts and their report was (i)
unqualified, (ii) did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
(iii) did not contain statements under section 498 (2) or (3) of the Companies
Act 2006. The statutory accounts for the year ended 31 December 2024 have not
yet been delivered to the Registrar of Companies.
Going concern
There have been no changes to the £150.0m fully Revolving Credit Facility
("RCF") and £65.0m Accordion which have been in place throughout 2024. This
facility is available until August 2026, with one further extension option of
either one or two years.
The RCF is drawn in short- to medium-term tranches of debt which are repayable
within 12 months of draw-down. Under the terms of the facility agreement, the
lenders are obliged to revolve maturing loans and the Group is not obliged to
make any loan repayments, provided certain conditions are met, including
covenant compliance. Consequently, the Directors have presented the RCF as a
non-current liability.
The Directors have prepared cash flow forecasts for a period of 12 months from
the date of approval of these financial statements (the going concern period)
based on a forecast consistent with the Amberen and Nizoral impairment
assessment assumptions, and exclusive of any innovation and development cash
inflows. These forecasts indicate that the Group will have sufficient funds,
given the RCF financing available, to meet its liabilities as they fall due
for that period.
Furthermore, the Directors have considered severe but plausible downside
scenarios, including a scenario that models a 16% reduction in EBITDA for the
Group for the remainder of 2025, arising from potential disruption in the
Group's distribution partner network. Even under this severe but plausible
downside scenario, forecasts indicate that the Group will have sufficient
funds to meet its liabilities as they fall due and will continue to comply
with its existing loan covenants throughout the forecast period. The Directors
have also considered a reverse stress test scenario which indicates that a
decline in monthly EBITDA against forecast from March 2025 of over 40% would
be needed to result in a breach of existing loan covenants. The Directors
consider this remote. In addition, there are mitigating actions that
Management can take in order to maintain covenant compliance in even more
extreme downside scenarios.
In light of the recommended cash offer by DBAY Advisors Ltd for the entire
issued and to be issued share capital of Alliance, the Directors have also
prepared cash flow forecasts for a period of 12 months from the date of
approval of these financial statements, considering the proposed debt
structure and associated finance costs of the Group under this new ownership
model. At the time of preparing these financial statements and should the DBAY
offer proceed, it is proposed that the current RCF is repaid in full using a
combination of new debt and equity. The proposed new debt structure assumes a
new Term Debt Facility of £215m, an undrawn £40m Acquisition Facility and a
£30m fully Revolving Credit Facility ("RCF") of which £5m is intended to be
immediately drawn down. The Directors do not consider that the proposed
transaction introduces any additional severe but plausible downside scenarios
to those considered under the existing ownership structure. Having modelled
these same scenarios under this revised cash flow forecast, the Directors
still consider that the Group will have sufficient funds to meet its
liabilities as they fall due and will continue to comply with its new loan
covenants throughout the forecast period. The Directors also considered a
reverse stress test scenario within these revised cash flow forecasts, which
indicates that a decline in monthly EBITDA against forecast from March 2025 of
over 24% would be needed to result in a breach of the new loan covenants. The
Directors consider this remote and again, there are mitigating actions that
Management can take in order to maintain covenant compliance in even more
extreme downside scenarios. The Directors have also considered any change of
control clauses in existing contractual arrangements and do not consider that
there is any material exposure to the Group in this regard. Specifically,
the existing RCF and associated facilities are intended to be repaid in full
without redemption penalty, with a new DBAY financing facility put in its
place.
Consequently, the Directors consider it highly unlikely that the Group would
be unable to exercise its right to roll over the existing or any new debt
under the Group's current or future proposed DBAY ownership structure.
Furthermore, the Directors consider it highly unlikely that the Group would be
unable to secure the new debt under the proposed DBAY ownership structure. The
Directors are therefore confident that the Group will have sufficient funds to
continue to meet its liabilities as they fall due for at least 12 months from
the date of approval of the financial statements. The Directors have,
therefore, determined it is appropriate to adopt the going concern basis in
preparing the financial statements
2. Revenue and segmental information
The Group's reportable segments are the strategic business units that
represent different parts of the overall product portfolio, these being
Consumer Healthcare brands and Prescription Medicines. The business units are
managed separately as each portfolio requires different expertise to deliver
the corresponding product offering as a result of the inherently different
characteristics of these product types.
Operating segments reflect the way in which information is presented to and
reviewed by the Chief Operating Decision Maker ('the CODM') for the purpose of
making strategic decisions and assessing Group-wide performance. The Group's
Board of Directors ("the Board") is the Group's CODM. The Group evaluates
performance of the operational segments on the basis of revenue and gross
profit. Underlying gross profit is consistent with that reported on a
statutory basis. Other than intangible assets, assets and liabilities are
reported to the Board at Group level and are not separated segmentally.
Revenue information By Brand Year ended Year ended
31 December 2024 31 December 2023
£000s £000s
Consumer Healthcare brands:
Kelo-Cote franchise(#) 65,426 63,209
Amberen(#) 10,121 11,218
Nizoral(#)* 14,933 19,648
MacuShield(#) 10,184 9,199
Aloclair 9,537 7,959
Vamousse 4,272 4,407
Other consumer healthcare brands 14,761 18,692
Total revenue - Consumer healthcare brands 129,234 134,332
Prescription Medicines:
Hydromol(#) 10,277 9,042
Flamma Franchise 6,655 5,990
Forceval 7,919 6,606
Other prescription medicines 24,751 24,710
Total revenue - Prescription medicines 49,602 46,348
Total Revenue 178,836 180,680
*Nizoral statutory revenue includes revenue generated on an agency basis.
Nizoral revenue presented on a see-through income statement basis is included
as an alternative performance measure in note 14.
(#)denotes star brands
Revenue information by Geography
Classification by geography is based on customer location.
Year ended Year ended
31 December 2024 31 December 2023
£000s £000s
Europe, Middle East and Africa (EMEA) 83,418 79,199
Asia Pacific and China (APAC) 65,926 72,422
Americas (AMER) 29,492 29,059
Total Revenue 178,836 180,680
Operating Segment Results
Year ended 31 December 2024
Consumer Healthcare Prescription Medicines
£000s £000s Total
£000s
Revenue 129,234 49,602 178,836
Cost of Sales (45,519) (24,031) (69,550)
Gross Profit 83,715 25,571 109,286
Year ended 31 December 2023
Consumer Healthcare Prescription Medicines
£000s £000s Total
£000s
Revenue 134,332 46,348 180,680
Cost of Sales (51,605) (24,056) (75,661)
Gross Profit 82,727 22,292 105,019
Major customers
The net revenues from the Group's largest customers in the year ended 31
December 2024 (customers separately comprising more than 10% of the Group's
revenue) are as follows:
Year ended Year ended
31 December 2024 31 December 2023
£000s £000s
Major customer 1 (Consumer healthcare sales in APAC) 21,913 20,200
Major customer 2 (Consumer healthcare sales in APAC) 21,114 21,201
3. Profit/(loss) before taxation
Profit /(loss) before taxation is stated after charging/(crediting): Year ended Year ended
31 December 2024 31 December 2023
£000 £000
Amounts receivable by the Company's auditor and its associates in respect of
- The audit of these financial statements 766 1,388
- The audit of the financial statements of subsidiaries 285 269
- Other assurance services (covenant compliance and other regulatory 10 21
compliance services)
Amortisation of intangible assets 8,377 9,101
Impairment of intangible assets 38,896 79,252
Impairment reversals for intangible assets (2,383) -
Restructuring costs 4,570 -
Profit on disposal of intangible assets (2,026) -
CMA provision release - (7,900)
Share options charge 1,646 889
Depreciation of plant, property and equipment 1,318 1,225
(Gain)/loss on foreign exchange transactions (775) 480
4. Non-underlying items
The Group presents a number of non-IFRS measures which exclude the impact of
significant non-underlying items. This is to provide investors with a view of
the measures used by management to monitor the ongoing business performance,
and can exclude items such as: amortisation and impairment of acquired
intangible assets; restructuring costs; significant gains or losses on
disposal; one-off project costs; remeasurement and accounting for the passage
of time in respect of contingent considerations; and the revaluation of
deferred tax balances following substantial tax legislation changes. This
assessment requires judgement to be applied by the Directors as to which
transactions are non-underlying and whether this classification enhances the
understanding of the users of the financial statements.
Year ended Year ended
31 December 2024 31 December 2023
£000s £000s
Amortisation of intangible assets (6,469) (7,198)
Impairment of goodwill and intangible assets (38,896) (79,252)
Non-underlying impairment reversals for the period 2,383 -
Restructuring costs(1) (4,570) -
Profit on disposal of intangible assets 2,026 -
CMA provision release - 7,900
Other(1) (439) (1,753)
Total non-underlying items before taxation (45,965) (80,303)
Taxation on non-underlying items 11,656 22,579
Total non-underlying items after taxation (34,309) (57,724)
(1) These items are recognised in administration and marketing expenses within
the Income Statement, totalling £5.0m in 2024 (2023: £6.1m).
Amortisation of intangible assets
The amortisation costs of acquired intangible assets are a significant item
considered unrelated to trading performance, and as such have been presented
as non-underlying. This classification is in line with the majority of peer
companies of the Group.
Impairment of goodwill and intangible assets
The impairment reviews for the Group's intangible assets resulted in
impairment losses as the carrying value of certain cash-generating units
exceeded estimated recoverable amounts. See note 9. The impairment losses are
significant items resulting from changes in assumptions for future recoverable
amounts. As such, they are considered unrelated to 2024 trading performance
and have been presented as non-underlying. This classification is in line with
the majority of peer companies of the Group.
Non-underlying impairment reversals for the period
The Group has performed an assessment on assets which have had impairments
recorded in previous periods to determine if any reversals of impairments were
required. No impairment reversals were recorded in 2023. See note 9. Reversals
of impairments are significant items resulting from changes in assumptions for
future recoverable amounts and as such, they are considered unrelated to 2024
trading performance, and have been presented as non-underlying. This
classification is in line with the majority of peer companies of the Group.
Restructuring costs
Restructuring costs include one-off costs relating to the recommended
acquisition of the Group and the restructure of the senior leadership team, as
well as professional support relating to finance and other transformation
activities. These costs are considered unrelated to 2024 trading performance,
and have been presented as non-underlying.
Profit on disposal of intangible assets
Significant gains or losses on the disposal of intangible assets not
previously held for sale are considered unrelated to 2024 trading performance,
and have been presented as non-underlying. Profit or loss on disposal of
intangible assets primarily consists of proceeds of the disposal, less costs
to sell, less the net book value of other brand assets.
CMA provision release
The provision of £7.9m relating to the CMA Infringement Decision was released
in the prior year following the announcement that the Group's appeal had been
upheld. This was considered unrelated to 2023 trading performance and was
presented as non-underlying in the prior year.
Other non-underlying items
Other non-underlying costs primarily relate to one-off legal and professional
costs, as well as provision for damages caused by flooding of Avonbridge
House. These costs are significant items considered unrelated to trading
performance, and as such have been presented as non-underlying.
5. Finance income and expense
Year ended Year ended
31 December 2024 31 December 2023 £000s
£000s
Finance expense
Interest payable on loans and overdrafts (8,482) (9,418)
Amortised finance issue costs (319) (461)
Finance costs on interest rate swaps (277) -
Interest expense (39) -
Interest on lease liabilities (108) (112)
Net exchange losses - (480)
(9,225) (10,471)
Finance income
Interest income 62 113
Net exchange gains 775 -
837 113
Finance expense - net (8,388) (10,358)
6. Taxation
Analysis of the charge for the period is as follows:
Year ended Year ended
31 December 2024 31 December 2023
£000s £000s
Corporation tax
In respect of current period 5,856 4,810
Adjustment in respect of prior periods 8 193
5,864 5,003
Deferred tax
Origination and reversal of temporary differences (9,415) (20,662)
Adjustment in respect of prior periods (180) (5)
Taxation (3,731) (15,664)
The difference between the total tax charge shown above and the amount
calculated by applying the
standard rate of UK corporation tax to the profit before tax is as follows:
Year ended Year ended
31 December 2024 31 December 2023
£000s £000s
Loss before taxation (14,460) (48,800)
Loss before taxation multiplied by the blended standard (3,615) (11,468)
rate of corporation tax in the United Kingdom of 25%
(2023: 23.5%)
Effect of:
Non-deductible expenses 709 (587)
Adjustment in respect of prior periods (172) 188
Differing tax rates on overseas earnings (1,222) (3,237)
Unrecognised losses - (13)
Foreign exchange 198 (869)
Share options 256 262
Movement in other tax provisions 115 60
Total taxation (3,731) (15,664)
A change to UK corporation tax was announced in the Budget on 3 March 2021,
increasing the main rate of UK corporation tax from 19% to 25% with effect
from 1 April 2023.
Non-deductible expenses primarily relate to restructuring costs and
impairment/amortisation of certain intangible assets which do not qualify for
tax relief and so represent a permanent difference. During 2023, the
non-deductible expenses primarily related to the release of the provision for
the CMA fine, offset by the impairment/amortisation of certain intangible
assets which did not qualify for tax relief and so represented a permanent
difference.
The Group has calculated 'underlying effective tax rate' as an alternative
performance measure in note 14.
7. Dividends
There was no dividend declared or paid relating to the financial years 2023 or
2024.
Year ended 31 December 2023
Pence / share £'000s
Amounts recognised as distributions to owners in 2023
Interim dividend for the 2022 financial year 0.592 3,197
Final dividend for the 2022 financial year 1.184 6,395
Total dividend 1.776 9,592
8. Earnings per share (EPS)
Basic EPS is calculated by dividing the earnings attributable to Ordinary
shareholders by the weighted average number of Ordinary shares in issue 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. There are no differences in earnings used to calculate each measure as
a result of the dilutive employee share options.
A reconciliation of the weighted average number of Ordinary shares used in the
measures is given below:
Year ended Year ended
31 December 2024 31 December 2023
Weighted average undiluted shares 540,483,766 540,144,706
Employee share options 4,972,886 1,210,980
Weighted average diluted shares 545,456,652 541,355,686
As the Group made a reported loss in the current and prior periods, the
dilutive potential Ordinary shares have not been included in the calculation
for Diluted EPS as the exercise of share options would have the effect of
reducing the loss per share and therefore is not dilutive. The underlying
basic EPS is intended to demonstrate recurring elements of the results of the
Group before non-underlying items. A reconciliation of the earnings used in
the different measures is given below:
Year ended Year ended
31 December 2024 31 December 2023
£000s £000s
Earnings for basic and diluted EPS (10,729) (33,136)
Non-underlying items (note 4) 34,309 57,724
Earnings for underlying basic and diluted EPS 23,580 24,588
The resulting EPS measures are:
Year ended Year ended
31 December 2024 31 December 2023
Pence Pence
Basic EPS (1.99) (6.13)
Diluted EPS (1.99) (6.13)
Underlying basic EPS 4.36 4.55
Underlying diluted EPS 4.32 4.54
9. Goodwill and intangible assets
Goodwill Consumer Healthcare brands and distribution rights Prescription Medicines brands, royalties and distribution rights Computer software Total
£000s £000s £000s £000s £000s
Cost
At 1 January 2024 34,415 287,352 152,297 15,266 489,330
Disposals - (322) (587) - (909)
Exchange adjustments (54) 1,320 (622) - 644
At 31 December 2024 34,361 288,350 151,088 15,266 489,065
Amortisation and impairment
At 1 January 2024 19,928 88,333 75,862 5,229 189,352
Disposals - - (152) - (152)
Non-underlying impairment for the year 1,688 25,973 11,235 - 38,896
Non-underlying impairment reversals for the year - (609) (1,774) - (2,383)
Non-underlying amortisation for the year - 872 5,597 - 6,469
Underlying amortisation for the year - - - 1,908 1,908
Exchange adjustments - 1,437 (70) - 1,367
At 31 December 2024 21,616 116,006 90,698 7,137 235,457
Net book amount
At 31 December 2024 12,745 172,344 60,390 8,129 253,608
At 1 January 2024 14,487 199,019 76,435 10,037 299,978
10. Loans and borrowings
On 15 August 2023, the Group agreed a new £150.0m fully Revolving Credit
Facility, together with a £65.0m Accordion. The facility was agreed with its
existing syndicate of lenders, replacing the previous RCF which ran through to
July 2024. This new facility is available until August 2026, with one further
extension option of one or two years. This has been classified as a
non-current liability. The bank facility is secured by a fixed and floating
charge over the Company's and Group's assets registered with Companies House.
The loan commitments are all 'investment grade' as at the balance sheet date.
Pursuant to its terms, the Group is obliged to deliver a copy of its audited
annual financial statements to the lenders within 120 days of the year-end.
Non-current 31 December 2024 31 December 2023
£000s £000s
Bank loans:
Secured 93,375 114,844
Finance issue costs (898) (1,198)
92,477 113,646
Movement in loans and borrowings 31 December 2024 31 December 2023
£000s £000s
At 1 January 113,646 133,744
Net (repayments) of borrowings (21,235) (18,000)
Additional prepaid arrangement fees (19) (1,338)
Amortisation of prepaid arrangement fees 319 461
Exchange movements * (234) (1,221)
At 31 December 92,477 113,646
* Exchange movements on loans and borrowings with effective net investment
hedges are reported in other comprehensive income and accumulated in the
translation reserve.
11. Provisions
Restructuring provision Onerous Contract provision Provision for flood damage costs Total
£000s £000s £000s £000s
At 1 January 2024 175 462 - 637
(Credit) to income statement - (462) - (462)
Charge to income statement 45 814 30 889
Provisions utilised during the year (68) - - (68)
Exchange differences (8) (9) - (17)
At 31 December 2024 144 805 30 979
The restructuring provision of £0.1m at 31 December 2024 (2023: £0.2m)
relates to the balance of restructuring costs in relation to the closure of
the Milan office following a change to the operating model for our
direct-to-market business in Italy in 2022.
The onerous contract provision of £0.8m at 31 December 2024 (2023: £0.5m)
relates to estimated legal and settlement costs in relation to a customer
dispute (£0.4m); and balances which are under dispute with suppliers
(£0.4m). The £0.5m provision brought forward was reclassified to inventory
provisions as at 30 June 2024 following receipt of the underlying product, and
then subsequently released upon completion of the sale.
The provision for flood damage costs of £0.03m at 31 December 2024 (2023:
£nil) relates to repairs for damage sustained to office buildings during
flooding in November 2024
12. Share capital
Allotted, called up and fully paid
No. of shares £000s
At 1 January 2023 - ordinary shares of 1p each 539,995,086 5,400
Issued during the year 394,994 4
At 31 December 2023 - ordinary shares of 1p each 540,390,080 5,404
Issued during the year 175,459 2
At 31 December 2024 - ordinary shares of 1p each 540,565,539 5,406
Between 1 January 2024 and 31 December 2024, 175,459 shares were issued on the
exercise of employee share options (2023: 394,994).
The holders of Ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company.
Managing Capital
Our objective in managing the business's capital structure is to ensure that
the Group has the financial capacity, liquidity and flexibility to support the
existing business and to fund acquisition opportunities as they arise.
The capital structure of the Group consists of net bank debt and shareholders'
equity. At 31 December 2024, net debt excluding lease liabilities was £60.1m
(2023: £91.2m) (note 14), whilst shareholders' equity was £207.6m (2023:
£217.9m).
The business is profitable and cash-generative. The main financial covenants
applying to bank debt are that leverage (the ratio of net bank debt to EBITDA)
should not exceed 3.0 times, and interest cover (the ratio of EBITDA to
finance charges) should not be less than 4.0 times. The Group complied with
both of these covenants in 2024 and 2023.
Smaller acquisitions are typically financed using bank debt, while larger
acquisitions typically involve a combination of bank debt and additional
equity. The mixture of debt and equity is varied, taking into account the
desire to maximise the shareholder returns while keeping leverage at
comfortable levels.
13. Cash generated from operations
Year ended Year ended
31 December 31 December
2024 2023
£000s £000s
Loss for the year (10,729) (33,136)
Taxation (3,731) (15,664)
Interest payable and similar charges 9,225 9,991
Interest income (62) (113)
Unrealised foreign exchange loss/(gain) 222 (423)
Profit on disposal of intangible assets (2,400) -
Depreciation of property, plant and equipment 1,318 1,225
Amortisation and impairment of intangibles 44,890 88,353
Change in inventories 3,114 (1,859)
Change in trade and other receivables 5,422 (6,481)
Change in trade and other payables (4,966) 1,937
Change in provisions 342 (7,785)
Share-based employee remuneration 1,646 889
Cash generated from operations 44,291 36,934
14. Alternative performance measures
The performance of the Group is assessed using Alternative Performance
Measures ("APMs"). The Group's results are presented both before and after
non-underlying items. Adjusted profitability measures are presented excluding
non-underlying items, as we believe this provides both management and
investors with useful additional information about the Group's performance and
aids a more effective comparison of the Group's trading performance from one
period to the next. In addition, the Group's results are described using
certain other measures that are not defined under IFRS and are therefore
considered to be APMs.
These measures are used by management to monitor ongoing business performance
against both shorter-term budgets and forecasts but also against the Group's
longer-term strategic plans. APMs used to explain and monitor Group
performance are as follows:
Measure Definition Reconciliation to GAAP measure
Underlying Earnings before interest, tax and non-underlying items ("EBIT", also Note A below
EBIT and EBITDA referred to as underlying operating profit), then depreciation, amortisation
and impairment ("EBITDA").
Calculated by taking profit before tax and financing costs, excluding
non-underlying items and adding back depreciation and amortisation.
EBITDA margin is calculated using See-though revenue.
Free cash flow Free cash flow is defined as cash generated from operations less cash payments Note B below
made for interest payable and similar charges, capital expenditure and tax.
Net debt Net debt is defined as the Group's gross bank debt position net of finance Note C below
issue costs and cash, excluding lease liabilities.
Underlying effective tax rate Underlying effective tax rate is calculated by dividing total taxation for the Note D below
year less impact of tax rate changes and non-underlying charges, by the
underlying profit before tax for the year.
Operating costs Defined as underlying administration and marketing expenses, excluding Note E below
depreciation and underlying amortisation charges.
See-through Under the terms of the transitional services agreement with certain supply Note F below
income statement partners, Alliance receives the benefit of the net profit on sales of
Nizoral™
from the date of acquisition up until the product licences in the Asia-Pacific
territories transfer to Alliance. The net product margin is recognised as part
of statutory revenue.
The See-through Income Statement recognises the underlying sales and
cost of sales which give rise to the net product margin, as management
consider this to be a more meaningful representation of the underlying
performance of the business, and to reflect the way in which it is managed.
Constant exchange rate (CER) revenue Like-for-like revenue, impact of acquisitions, and total See-through revenue Note G below
are stated so that the portion denominated in non-Sterling currencies is
retranslated using foreign exchange rates from the previous financial year.
A. Underlying EBIT and EBITDA
Reconciliation of Underlying EBIT and EBITDA Year Ended 31 December 2024 Year Ended 31 December 2023
£000s £000s
Loss before tax (14,460) (48,800)
Non-underlying items (note 4) 45,965 80,303
Underlying PBT 31,505 31,503
Finance costs (note 5) 8,388 10,358
Underlying EBIT 39,893 41,861
Depreciation 1,318 1,225
Underlying amortisation 1,908 1,903
Underlying EBITDA 43,119 44,989
Underlying EBITDA margin 23.9% 24.6%
B. Free cash flow
Reconciliation of free cash flow Year Ended Year Ended
31 December 2024
31 December 2023
£000s £000s
Cash generated from operations (note 13) 44,291 36,934
Interest payable and similar charges (8,736) (9,433)
Capital expenditure (841) (696)
Tax paid (5,575) (5,524)
Free cash flow 29,139 21,281
C. Net debt
Reconciliation of net debt Note 31 December 2024 31 December 2023
£000s £000s
Loans and borrowings - non-current 10 (92,477) (113,646)
Cash and cash equivalents 32,360 22,436
Net debt (60,117) (91,210)
D. Underlying effective tax rate
Reconciliation of adjusted underlying effective tax rate Year Ended Year Ended
31 December 2024
31 December 2023
£000s £000s
Total taxation credit for the year 3,731 15,664
Non-underlying tax credit (11,656) (22,579)
Underlying taxation charge for the year (7,925) (6,915)
Underlying profit before tax for the year 31,505 31,503
Underlying effective tax rate 25.2% 22.0%
E. Operating costs
Reconciliation of operating costs Year Ended Year Ended
31 December 2024
31 December 2023
£000s £000s
Total administration and marketing expenses (70,848) (54,219)
Non-underlying administration and marketing expenses 5,009 (6,147)
Depreciation 1,318 1,225
Operating costs (64,521) (59,141)
F. See-through income statement
2024 statutory values See-through adjustment 2024 see-through values
£000s £000s £000s
Revenue - Consumer healthcare brands 129,234 1,509 130,743
Revenue - Prescription Medicines 49,602 - 49,602
Total Revenue 178,836 1,509 180,345
Cost of sales (69,550) (1,509) (71,059)
Gross profit 109,286 - 109,286
Gross profit margin 61.1% - 60.6%
2023 statutory values See-through adjustment 2023 see-through values
£000s £000s £000s
Revenue - Consumer healthcare brands 134,332 2,032 136,364
Revenue - Prescription Medicines 46,348 - 46,348
Total Revenue 180,680 2,032 182,712
Cost of sales (75,661) (2,032) (77,693)
Gross profit 105,019 - 105,019
Gross profit margin 58.1% - 57.5%
There is no impact from the see-through adjustment on income statement lines
below gross profit.
G. Constant exchange rate revenue
See-through revenue 2024 Foreign 2024
exchange
CER
£000s
impact
£000s
£000s
LFL see-through revenue - Consumer Healthcare brands 130,743 3,048 133,791
LFL see-through revenue - Prescription Medicines 49,602 352 49,954
See-through revenue (Note F) 180,345 3,400 183,745
Statutory revenue 2024 Foreign 2024
exchange
CER
£000s
impact
£000s
£000s
LFL statutory revenue - Consumer Healthcare brands 129,234 3,048 132,282
LFL statutory revenue - Prescription Medicines 49,602 352 49,954
Statutory revenue (Note F) 178,836 3,400 182,236
15. Events after the reporting date
On 10 January 2025 we announced the recommended cash offer by DBAY Advisors
Ltd for the entire issued, and to‑be‑issued share capital of Alliance, at
the value of 62.5 pence per share (representing a £349.7m total cash offer).
This offer was increased to 64.75 pence per share (representing a £362.0m
total cash offer) on 10 March 2025 and was accepted by the requisite number of
shareholders at a meeting on 13 March 2025. As announced on 20 March 2025, the
Sanction Hearing to approve the offer made by DBAY is scheduled for 12 May
2025, and the Effective Date of the Scheme is expected to be 14 May 2025. We
anticipate that Alliance will cease trading on AIM shortly afterwards. There
were no other material events subsequent to 31 December 2024 and up until the
authorisation of the financial statements for issue, that have not been
disclosed elsewhere in this release.
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