On Thursday, Deutsche Bank maintained its Buy rating on Alliance Pharma Plc (APH:LN) with a stock price target of GBP0.85. The firm's analyst highlighted that Alliance Pharma's full-year 2023 (FY23) results, which experienced some delays due to audit-related issues, have now been published and are consistent with previous statements. The company's profit outlook for the full year 2024 (FY24) remains unchanged.
The analyst pointed out the new developments in the report, which included non-cash impairments amounting to £79 million for FY23. These impairments were attributed to the Amberen brand and an increase in Weighted Average Cost of Capital (WACC). Moreover, the company recorded £28 million in non-cash charges and corrections that have resulted in the restatement of its full-year 2022 (FY22) results.
The charges and impairments are largely connected to Alliance Pharma's acquisition of Biogix/Amberen, a transaction valued at $110 million in late 2020. Since the acquisition, sales of Amberen have dropped by half, impacting the company's financials.
Despite these significant non-cash items, the firm's analyst emphasized that the underlying financial results align with the company's previous communications. Alliance Pharma's management has not altered its profit forecasts for the upcoming year, indicating stability in their business outlook.
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