Alliance Pharma Share Discussion Threads

[norbert colon] 15/1/2016 14:37

Still one of my bigger holdings. Strength noted over recent days.

[roper] 15/1/2016 14:14

Yup Pimpernel4.....they're 49p (fraction over now) bid in big size. Always interesting when the general mkt is getting smashed and it doesn't put the buyer(s) off. Bodes well...

[pimpernel4] 15/1/2016 13:57

Anyone else still out there? This has been popping in and out of auction over the past week or so, now back up at 50p. There seems to be some quiet stake-building going on.

[pimpernel4] 12/1/2016 15:16

River and Mercantile Asset Management now on board with 24m shares. Looks like the deal with Sinclair is going down well out there.

[pimpernel4] 05/1/2016 16:25

THE INDEPENDENT
Newspaper

TOP 10 PICKS FOR 2016

We always like to include something from the junior market, so step forward Alliance Pharma (43p). The niche healthcare business is about as safe as it gets on the AIM, it even pays a dividend. It has a strategy of snapping up products that are no longer priorities for big pharma, and its recent £132m purchase of Sinclair IS Pharma's dermatology business is seen by City investors as a big step up, with the company entering the US and Asia Pacific for the first time. Its track record is very solid and the shares are some way off the highs recorded earlier last year. We think it can be a winner in 2016.

[pimpernel4] 04/1/2016 16:52

APH was tipped in the Independent at the weekend - one of their top 10 picks for the year ahead...

[mazarin] 22/12/2015 16:06

Its looking more likely that we'll soon all be able to buy at 41p....!

[123prezzie] 04/12/2015 11:05

Mazarin. It may be due to the extra dilution caused by Numis exercising its option to buy more shares at 41p - see yesterday's RNS. Presumably they will now offload these at anything above 41p.

[norbert colon] 02/12/2015 09:01

Seems like Slater have significantly increased their holding as part of the placing.

[bigman] 02/12/2015 08:34

my thoughts are that the seller, sinclair pharma, were not in a great place with the whole of their business and the board would have been able to do a very smart deal. I am not a lover of sinclair and they have dressed this sale up to look like they want to concentrate on other parts of the business. They have been trying to sell the whole business for over a year following a "strategic review" ( which one could intreperate as we are not doing too well and cash is tight) and they only recently put all their businesses together in last few years through mergers and acquisitions so why now sell major part of it. Coupled to that we are raising a lot of money for the size of our business and this would only be possible if institutions were on side and liked the deal, they would hear more detail about it at the fund raise than us mere shareholders, so that is a big big plus. all IMO

[pimpernel4] 01/12/2015 18:53

Was just thinking the same BM after checking in. Since the brief dip to 44, it has been steadily building and holding above 50 now. I'd say that is a pretty good vote of confidence so far. Some big trades today.

[bigman] 01/12/2015 17:19

Market seems to like this, the price is pretty good considering the placing price.

[pimpernel4] 30/11/2015 11:42

Mr "10,000" from this morning clearly has some appetite left to run. Good to see.

[pimpernel4] 30/11/2015 07:44

I think you are right bigman. It is now a question of trusting the management to extract the value - I do not for one second think that the APH board would have entered into this, were there not a clear plan to transform company performance via this deal.

Cisk - I take your points, though you can see my point, can you not - you for one sold half your holding recently, whilst the institutions are either adding or holding. Fair play to you at 59p - good call as a private investor.

[pimpernel4] 30/11/2015 07:44

I think you are right bigman. It is now a question of trusting the management to extract the value - I do not for one second think that the APH board would have entered into this, were there not a clear plan to transform company performance via this deal.

Cisk - I take your points, though you can see my point, can you not - you for one sold half your holding recently, whilst the institutions are either adding or holding. Fair play to you at 59p - good call as a private investor.

[dlku] 28/11/2015 22:03

massive indigestion from the placing

[bigman] 28/11/2015 21:57

Step change tea !! if they get this right and take the costs out of the acquistion that they think they can do then this will be a really cheap deal and shares will fly

[cisk] 26/11/2015 12:45

pimper, I agree to an extent in that they have successfully integrated a number of products over the years that were well-established in their fields, and that were (pretty much without exception) non-core and niche products to the companies who sold them. They typically weren't promoted and little effort was put into their marketing / development by their owners.

This presented profitable opportunities for APH to increase sales.

Now I don't know much about the Sinclair portfolio, but this strikes me as a hugely different deal to anything they've done before.

I will do some more research before I comment more on the portfolio; I remember seeing that the average age of the products APH acquired was at least 30 years old; I get the feeling that it's very different to those products coming with Sinclair.

Also you have to remember that APH is run by a very small team of 20-30 people in a little town called chippenham in wiltshire. Everything is outsourced.

I wonder how they will handle the scaling up required with the doubling in size of their business?

Like Ram mentioned, they have gone from a fairly attractive debt profile to something rather different; maybe in 18 months I'll be saying how well they've sweated their assets and got the debt right down, but for the moment the risk profile has increased significantly.

Personally I sold out half of my holding at just over 59p as I thought the price was a little high, I will keep on holding to see what happens but certainly I'm more wary now.

[pimpernel4] 26/11/2015 09:18

Fair enough Cisk, each to their own.

I myself do not hold the institutions who hold APH in the regard you do, but I understand your general conclusion re some people's ability to "sell their mums" for a quick profit.

I don't quite understand this point though:

"Is there something I've missed that means Alliance will be able to make these products work and make far more money out of them than Sinclair has?"

Isn't that precisely what APH are so good at, with a proven track record in precisely that?

And this deal gives them a major foothold in the Continental European market.

[ramridge] 26/11/2015 09:04

Forgot to mention their post acquisition debt position.
Net Debt / EBITDA = 3.7
Hmmm. Anything over 3 is a red flag.

[pimpernel4] 26/11/2015 08:19

Fair enough and good luck to you ramridge.

There seems to have been plenty of appetite at 44p this morning at just a 10% premium to the placement price. The compelling thing about APH is its relatively small free float of shares. As we saw earlier in the year it does not take much to get it motoring and the majority of the new shares must surely now sit in hands that are in it for the mid to long term.

Let's see what the end of year share price is.

[ramridge] 26/11/2015 08:10

On first reading, it looks too expensive. EBITDA multiple of 14.7, and PE of 26. Paid too much.
This together with the deeply discounted placing means I am staying away.
Synergies have to be a lot more than £5m to make this attractive.
All IMO and DOYR

[pimpernel4] 26/11/2015 08:04

Indeed Norbert, let this sink in and settle and the next 12 months will clearly be transformational. On the plus side of it not being offered to retail, this way the shares should sit in safe, tight hands.

[norbert colon] 26/11/2015 08:01

A few negatives such as it not being offered to retail investors, it's extremely dilutive and at a discount but those points aside its clearly transformational and earnings accretive and I agree that clearly this is a game changer for the Group w.r.t scale and opportunities.I have a lot of faith in John Dawson and the board to do the right thing and look forward to remaining a long term shareholder.