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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Bespak | LSE:BPK | London | Ordinary Share | GB0000946276 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 667.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS No 772n BESPAK PLC 8th July 1997 Preliminary Results Announcement for the 52 weeks ended 2 May 1997 Financial Highlights 1997 1996 Turnover #77.7m #76.2m Up 2% Profit before tax (before exceptional items) #11.0m #8.7m Up 26% Exceptional items - #8.2m Profit before tax #11.0m #16.9m Earnings per share (before exceptional items) 29.5p 22.9p Up 29% Net cash #6.3m #0.2m Dividends per share 12.3p 11.0p Up 12% Operating Performance * Year of substantial progress * Strong financial performance resulting from growth of drug delivery business and improved operations * Record sales and profits achieved in the UK * Operating margins improved from 11.8% to 14.0% * Improved quality and depth of operating management * Strong cash generation Dividend * Final dividend increased by 12.9% to 7.68 pence per share (1996 6.8 pence), giving a total increase of 11.8% to 12.3 pence (1996 11.0 pence) Building for the Future * Strengthened outlook for growth * Major programme of investment in drug delivery * Focus on opportunities arising from serving growing markets in healthcare Bespak plc Chairman, Sir David Cooksey, commented today: "This last year has been successful for Bespak in that improved results have been accompanied by a stronger outlook for growth derived from the Group's pipeline of development programmes. Bespak is strongly positioned in segments of the global healthcare markets which are likely to experience significant growth in the future and the Board is confident that the Group is taking advantage of the opportunities that this growth presents." Enquiries: Peter Chambre, Chief Executive Robert Preece, Finance Director Bespak plc 0171 638 9571 Issued by: Sue Pemberton Dewe Rogerson 0171 638 9571 Bespak plc 1996/97 Preliminary Results OVERVIEW This past year has been successful for Bespak plc, with profit before tax (prior to the 1996 exceptional item) increasing by 26% to #11.0 million, on turnover which grew by 2% to #77.7 million. Record sales and profits were achieved in the UK and a base for further growth in profits was established in the USA. Underlying this performance, sales of drug delivery products to pharmaceutical customers rose by 14%, resulting from the launch of new generic respiratory drugs in the USA and the growth of the drug delivery devices segment of the Group's business. Further improvements in operating effectiveness have been achieved in each of the Group's operations and the continued emphasis on the management of cash has increased the Group's net cash position at the year end to #6.3 million (1996 #0.2 million). Earnings per share increased by 29% to 29.5 pence before exceptional items (1996 #10.2 million exceptional credit, 1997 nil). The Board is recommending that the final dividend be increased by 12.9% to 7.68 pence per share (1996 6.8 pence), a total increase for the year of 11.8% to 12.3 pence (1996 11.0 pence). During this year, the Group's opportunities for growth in the drug delivery market have improved from existing products, as well as from the pipeline of products in development. As a result, a major programme of investment will commence during the forthcoming year to support these opportunities and build on the Group's position in this key market. REVIEW OF OPERATIONS UK At Bespak UK record sales and profits were achieved, with turnover growing by 9% to #47.2 million and profits increasing by 27% to #9.6 million. The company's primary focus is on the drug delivery product sector where sales grew by 18% to #39.2 million. Sales of Bespak's range of metered dose valves for delivering respiratory drugs and critical care valves for use with catheters increased by 2% to reach #23.3 million. In addition, sales of drug delivery devices increased by #5.6 million to #15.9 million, driven by the growth of Accuhaler, Glaxo Welcome's dry powder inhaler product. Sales of Bespak's personal care products declined by 20% to #8.0 million, resulting mainly from weak market demand. The actions to focus on developing the major customers in this sector have also contributed to the decline in sales. This focus, combined with an investment programme which started during 1996 to consolidate personal care manufacturing operations, will create a stronger business in the forthcoming year. USA In the USA, turnover for the year declined by 6% to #30.5 million, although in dollar terms this decline was 4%, and operating profit was maintained at #1.2 million. This reflects a satisfactory year at Bespak Inc. and the completion of the recent restructuring programme at Tenax Corporation. Bespak Inc. serves the US pharmaceutical industry by developing and manufacturing drug delivery devices, as well as distributing and providing technical support to customers of Bespak's range of metered dose valves manufactured in the UK. Bespak Inc. produced a strong performance, with improved margins on sales similar to last year at #16.3 million. Sales of distributed valve products increased by 4% following the launch in 1996 of generic albuterol products (salbutamol) in the USA. A significant feature of the results of Bespak Inc. in the first half of the year was the sales increase caused by the filling of the distribution pipeline prior to the launch of these products. In the second half year this pipeline filling ended and sales of valves for the full year reflect the rise in the underlying market, which is expected to continue in the forthcoming year. Sales of drug delivery devices manufactured by Bespak Inc. declined during the year by 10%. However, profits from these products were increased as a result of significantly improved operating effectiveness at the company's two plants in North Carolina. At Tenax Corporation, which supplies specialist assemblies and components to the medical device industry, sales declined by 9% to #14.2 million. Although Tenax made a small loss during the year, the company was operating profitably in the second half year following the successful completion of the restructuring programme which commenced in 1995. The objective of this programme has been to create a fully competitive supplier to the major medical device customers in the USA, by focusing on a small number of key customers where Tenax could provide very high levels of service and quality and by restructuring the manufacturing operations to reduce cost significantly. The new management team at Tenax appointed during this past year has now established a sound base for the operation, with prospects of growth in the future. BUILDING FOR THE FUTURE Bespak is the world's leading supplier of delivery devices to the respiratory drug industry and the Group has some significant opportunities for growth in this market. During the next year a substantial investment programme will commence, which it is anticipated will be completed over three years, to install the capacity required for the developments currently underway in valves and devices for drug delivery. Bespak has been working for a number of years with its major valve customers on programmes to change the propellants for metered dose asthma inhalers from the current CFC (chlorofluorocarbon) to new HFA (hydrofluoroalkane) propellants. The product development phase of this major change programme is nearing its conclusion, with the initial submissions to the regulatory authorities having been made by our customers during the past period. While the Group continues to anticipate that the phasing of the transition will cause some temporary loss of market share, in the medium term this conversion is expected to result in an increase in Bespak's share of this key market through the winning of some new products and customers. During the forthcoming year Bespak will commence the installation of new clean room manufacturing facilities to support the launch requirements of our customers for the new range of valves. In addition to its position in the market for valves for aerosol-based inhalers, Bespak has excellent prospects for growth in the development of dry powder inhalers for the treatment of respiratory disease. Bespak is currently the exclusive supplier of Glaxo Wellcome's dry powder inhaler, Accuhaler, and has already completed the second phase of capacity installation for this device. A third stage expansion of capacity will come on stream during 1998, for which significant investment is required at the King's Lynn facility. Work is continuing to support other dry powder inhaler programmes. Bespak will be the manufacturer of the Medeva dry powder inhaler which is planned to be launched later in 1997. At that time it is anticipated that Bespak will commence the manufacturing investment programme, providing for the introduction of high volume automated manufacturing in 1999. During the past year significant progress has also been made, in conjunction with Rhne- Poulenc Rorer, on the development of the Ultrahaler dry powder inhaler, in preparation for the regulatory filing, anticipated in 1999. The Group's pharmaceutical customers are increasingly viewing the use of drug delivery devices as having the potential to enhance the performance of specific drugs and to protect their franchise against generic competition. These factors will drive the growth of the drug delivery device market and Bespak is uniquely positioned to meet our customers' requirements, offering both device development and manufacturing capabilities in the UK and USA. There are already a number of significant development programmes underway in the USA, which provide the potential for long term growth at Bespak Inc. In addition, we are planning to enhance the Group's capability to develop new drug delivery technologies for our customers by increasing investment over the next two years in the Group's device development organisation and in new product innovation. Following the completion of the restructuring programme at Tenax, the Group can now seek to benefit from the changes underway in the medical device sector to achieve satisfactory growth and margins. While the medical device industry is likely to continue its trend of long term growth, the consolidation currently taking place among the major medical device companies will inevitably lead to a reduction in the number of suppliers to these companies. The Group believes that it can take advantage of opportunities that these trends will bring for high quality, competitive suppliers to the industry. OUTLOOK During the forthcoming year, our expectations are that continued growth of drug delivery products will be supported by further efforts to achieve improved operating effectiveness in each of the Group's businesses. At the same time, Bespak will commence a three year programme of investment to support the major product launches in drug delivery and to strengthen the Group's product development capability and pipeline. Bespak is serving growing sectors of the global healthcare market and is continuing to enhance its opportunities for long term growth in its key markets of medical devices and drug delivery. Consolidated Profit and Loss Account (Unaudited) For the 52 weeks ended 2 May 1997 Notes 1997 Before Exceptional 1996 Total exceptional items Total items #000 #000 #000 #000 Turnover 2 77,749 76,164 _ 76,164 Operating expenses (66,841) (67,186) _ (67,186) Innovata Biomed contract _ _ 8,200 8,200 _______ _______ _______ _______ Net operating income 2 10,908 8,978 8,200 17,178 Net interest 124 (240) _ (240) receivable/(payable) _______ _______ _______ _______ Profit on ordinary 11,032 8,738 8,200 16,938 activities before taxation Taxation (3,584) (2,951) 1,978 (973) _______ _______ _______ _______ Profit on ordinary 7,448 5,787 10,178 15,965 activities after taxation _______ _______ Dividends 3 (3,114) (2,778) _______ _______ Retained profit for the year 4,334 13,187 _______ _______ Earnings per share 4 29.5p 22.9p 40.3p 63.2p _______ _______ _______ _______ All amounts relate to continuing operations. There is no difference between the profit on ordinary activities before taxation and the retained profit for the year stated above, and their historical cost equivalents. Consolidated Balance Sheet (Unaudited) At 2 May 1997 1997 1996 #000 #000 Fixed assets Intangible assets 361 350 Tangible assets 31,088 30,638 Investments 784 784 _______ _______ 32,233 31,772 _______ _______ Current assets Stocks 5,798 8,244 Debtors 12,218 14,695 Short term deposits 12,500 9,535 Cash at bank and in hand 3,489 1,791 _______ _______ 34,005 34,265 Creditors - amounts falling due within one year (21,735) (21,419) - Innovata Biomed contract - (2,500) _______ _______ Net current assets 12,270 10,346 _______ _______ Total assets less current liabilities 44,503 42,118 Creditors - amounts falling due after more than one year (4,317) (6,177) Provisions for liabilities and charges Deferred taxation (386) - Innovata Biomed provision (4,607) (4,933) _______ _______ Net assets 35,193 31,008 _______ _______ Capital and reserves Called up share capital 2,526 2,525 Share premium account 14,342 14,320 Special reserve 308 308 Profit and loss account 18,017 13,855 _______ _______ Equity shareholders' funds 35,193 31,008 _______ _______ Consolidated Cash Flow Statement (Unaudited) For the 52 weeks ended 2 May 1997 Notes 1997 1996 #000 #000 Cash inflow from operating activities Net cash inflow from operating 5 20,719 16,476 activities Outflow related to Innovata Biomed (2,826) (2,650) contract ______ _______ Net cash inflow from operating 17,893 13,826 activities ______ _______ Returns on investment and servicing of finance Interest received 714 897 Interest paid (655) (1,075) ______ _______ 59 (178) ______ _______ Taxation UK corporation tax paid (2,891) (2,555) Overseas tax repaid 71 492 ______ _______ (2,820) (2,063) ______ _______ Capital expenditure Payments to acquire intangible fixed assets (125) (134) Payments to acquire tangible fixed assets (6,782) (6,628) Receipts from sales of tangible fixed assets 161 177 ______ _______ (6,746) (6,585) ______ _______ Acquisitions and disposals Proceeds from the sale of Medix Group Limited - 1,002 Equity dividends paid (2,884) (2,576) ______ _______ Net cash inflow before management of 5,502 3,426 liquid resources and financing ______ _______ Management of liquid resources Movement in fixed deposits (2,965) 245 Financing Issue of shares 23 - Repayment of borrowings (1,550) (1,675) ______ _______ (1,527) (1,675) ______ _______ Increase in cash and cash equivalents 1,010 1,996 ______ _______ Statement of Total Recognised Gains and Losses for the 52 weeks ended 2 May 1997 1997 1996 #000 #000 Profit on ordinary activities after 7,448 15,965 taxation Exchange movements on foreign currency net (172) 143 investments _______ _______ Total recognised gains and losses for the 7,276 16,108 financial year _______ _______ Reconciliation of Movements in Equity Shareholders' Funds for the 52 weeks ended 2 May 1997 1997 1996 #000 #000 Equity shareholders' funds brought forward 31,008 17,678 Profit on ordinary activities after 7,448 15,965 taxation Dividends (3,114) (2,778) Exchange movements on foreign currency net (172) 143 investments Issue of ordinary share capital 23 - _______ _______ Equity shareholders' funds carried forward 35,193 31,008 _______ _______ NOTES TO THE PRELIMINARY ANNOUNCEMENT 1. Preparation of the Preliminary Announcement (i) Basis of preparation The profit and loss account covers the 52 weeks (1996 53 weeks) to 2 May 1997. The balance sheets have been drawn up at 2 May 1997 and 3 May 1996 respectively. The results of overseas subsidiarieshave been translated into sterling at the average rates of exchange ruling during the financial year. (ii) Abridged accounts The foregoing financial information, which has been prepared on the basis of the accounting policies set out in Bespak plc's accounts for the 53 weeks to 3 May 1996, does not amount to full accounts within the meaning of section 240 of the Companies Act 1985 (as amended). The abridged comparative figures for the 53 weeks to 3 May 1996 are from the accounts of Bespak plc for the 53 weeks ended 3 May 1996. These accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act. 2. Segment information The geographical analysis of turnover, net operating income and net assets is as follows: Geographical area (turnover by destination) 1997 1996 #000 #000 United Kingdom 30,709 27,374 United States 30,564 33,277 Europe 12,604 11,097 Rest of the World 3,872 4,416 _______ _______ 77,749 76,164 Average rate of exchange #1 Sterling: US $ 1.59 1.56 Turnover by origin United Kingdom United States of Total America 1997 1996 1997 1996 1997 1996 #000 #000 #000 #000 #000 #000 Total sales 53,560 49,877 30,565 32,434 84,125 82,311 Inter-segment sales (6,369) (6,141) (7) (6) (6,376) (6,147) _______ _______ _______ _______ _______ _______ External sales 47,191 43,736 30,558 32,428 77,749 76,164 _______ _______ _______ _______ _______ _______ Net operating income Net operating income by 9,652 7,572 1,186 1,206 10,838 8,778 segment Innovata Biomed _ 8,200 _ _ _ 8,200 contract _______ _______ _______ _______ _______ _______ Total 9,652 15,772 1,186 1,206 10,838 16,978 Income from associates _______ _______ _______ _______ 70 200 _______ _______ 10,908 17,178 _______ _______ NOTES TO THE PRELIMINARY ANNOUNCEMENT 2. Segment information continued Turnover by origin United Kingdom United States of Total America 1997 1996 1997 1996 1997 1996 #000 #000 #000 #000 #000 #000 Operating assets by 26,359 28,189 10,870 13,019 37,229 41,208 segment _______ _______ _______ _______ _______ _______ Unallocated net assets/(liabilities): Investments 784 784 Deferred taxation (386) _ Innovata Biomed (4,607) (7,433) liability & provision Tax and dividends (4,083) (3,734) Net funds 6,256 183 _______ _______ 35,193 31,008 _______ _______ Closing rate of exchange 1.62 1.50 #1 Sterling: US $ 3. Dividends 1997 1996 #000 #000 Interim dividend of 4.62p per share paid on 21 February 1997 (1996 - 4.2p) 1,167 1,061 Proposed final dividend of 7.68p per share payable on 6 October 1997 (1996 - 6.8p) 1,947 1,717 _______ _______ 3,114 2,778 _______ _______ The record date for the proposed final dividend is close of business on 18 July 1997. 4. Earnings per share The earnings per share as shown in the profit and loss account are calculated by reference to the net profit after taxation and the weighted average number of shares in issue during the year (1997 - 25,257,713; 1996 - 25,253,951). Figures for fully diluted earnings per share based on outstanding share options are not provided as the effect on earnings per share is not material. The number of shares in issue at 2 May 1997 was 25,262,161 (1996 - 25,253,951). NOTES TO THE PRELIMINARY ANNOUNCEMENT 5. Net cash inflow from operating activities Reconciliation of net operating income to net cash inflow from operating activities. 1997 1996 #000 #000 Net operating income before exceptional 10,908 8,978 items Depreciation 5,161 5,160 Profit on sale of tangible fixed assets (34) (24) Decrease in stocks 2,174 1,113 Decrease in debtors 2,649 16 (Decrease)/increase in creditors (111) 1,340 Income from interests in associated (70) (200) undertakings Dividends received from associated 42 29 undertakings Loss on disposal of Medix Group Limited _ 64 _______ _______ Net cash inflow from operating activities 20,719 16,476 _______ _______ 6. Reconciliation of net funds The table below provides an analysis of net funds and a reconciliation of net cashflow to movement in net funds. At 4 May Cash Inception Exchange At 2 May 1996 flow of leasing movements 1997 contracts #000 #000 #000 #000 #000 Cash at bank and in 1,791 1,698 _ _ 3,489 hand Overdrafts (3,338) (688) _ 94 (3,932) _______ _______ _______ _______ _______ Cash and cash (1,547) 1,010 _ 94 (443) equivalents Loans and leasing (7,805) 1,550 (74) 528 (5,801) obligations Short term deposits 9,535 2,965 _ _ 12,500 _______ _______ _______ _______ _______ Net funds 183 5,525 (74) 622 6,256 _______ _______ _______ _______ Financing items included in cash flow movements Issue of shares (23) _______ Net cash inflow before management of 5,502 liquid resources and financing _______ END
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