Alliance shares drop despite lift in earnings

 
Julian Harris
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AIM-LISTED Alliance Pharma yesterday posted a sharp jump in pre-tax profits for the first half of the year, yet saw its shares drop 4.4 per cent as details in the results left investors unimpressed.

Sales in the six months to 30 June rose by four per cent to £22.8m for the speciality pharma company, sending pre-tax profits up 29 per cent to £6.8m.

However, one-off factors boosted the six-month performance, with the outlook not as promising as some analysts had hoped.

The company’s cyclical toxicology product peaked during the period, with the accounts admitting: “Our performance is not likely to be quite as strong in the second half as the toxicology product sales pass their cyclical peak.”

The company – which buys the rights to pharmaceuticals, licenses and markets them – is also gradually handing back nine products that it has been distributing for Swiss pharma

giant Novartis.

“The headwinds Alliance is going to have to face are stronger than many people thought they would be,” Canaccord Genuity’s Julie Simmonds told City A.M.

Alliance nevertheless raised its dividend by 10 per cent to 0.303p for each share, up from the 0.275p paid for the first half of 2012.