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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 667.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:9982E
Bespak PLC
12 December 2002
For Immediate Release: 07.00 am, Thursday, 12 December 2002
Bespak plc
Interim Results for the 26 weeks ended 1 November 2002
Bespak plc, an innovator in drug delivery with three synergistic businesses,
today announces its interim results for the 26 weeks ended 1 November 2002
(2001: 27 weeks).
KEY POINTS:
* Sales down by 4% to #41.4m (2001: #43.1m) - reflecting a reduction in
contractual price, not volume
* Profit before tax down by 22% to #5.6m (2001: #7.2m)
* Exceptional gain on sale of shares in associate of #1.5m
* Earnings per share 17.0p (2001: 19.0p)
* Interim dividend of 7.0p (2001: 7.0p) to be maintained this year and for
the medium term. Net cash at half year of #14.8m
* Cost savings of #2m next year with #1m charge in the second half of this
year
* Pulmonary sales decreased 10.9% to #17.6m. US albuterol market has reduced
2002 demand for MDI valves. Generic customers cancelled marketing
programmes and are working off excess inventories of CFC valves
* Device & Manufacturing Services ("DMS") sales increased 3% to #20.1m.
Profits affected by reduced margins on mature products offsetting growth
from new customers
* Nasal drug delivery development work exceeding expectations. Increased
development funding for Lyfjathroun. Strong confidence in programmes.
Evaluation of acquisitions of speciality nasal companies continues - to
decrease risk and accelerate time-to-market
* R&D spending to be maintained to secure profitability in the long term
Mark Throdahl, Chief Executive of Bespak, commenting on the results, said:
"As well as driving the success of our Pulmonary and DMS businesses, Bespak
remains strongly committed to progressing our exciting nasal delivery programmes
and accelerating development of new technologies. This is how we will generate
greater growth prospects as we evolve into a drug delivery company with its own
intellectual property."
- ENDS -
For further information please call:
BESPAK plc On 12.12.02: +44 (0) 20 7466 5000
Mark Throdahl - Chief Executive Thereafter: +44 (0) 1908 552 600
Martin Hopcroft - Group Finance Director
BUCHANAN COMMUNICATIONS Tel: +44 (0) 20 7466 5000
Tim Thompson / Nicola How
Bespak plc
Interim Results for the 26 weeks ended 1 November 2002
Overview
In the past six months our financial performance has been impacted by the second
and final price reduction on a mature DMS product, which was agreed in order to
secure a substantial contract extension. We have a programme to reduce
associated costs this year, but, due to supplier delays in the receipt of
equipment, this process was put back. In addition, unexpected inventory build
of CFC valves by customers in the US has temporarily decreased Pulmonary sales
and we have experienced programme extensions at Inhale and Weston Medical.
Therefore, we are taking immediate steps to reduce overhead spending. We have
decided to maintain our R&D spending to secure our profitability in the
long-term.
Financial Review
In the last six months, sales decreased by 4% to #41.4m (2001: #43.1m
re-presented). Group operating profit declined by 48% to #3.5m directly as a
result of the contractual price reductions described above. An exceptional
profit of #1.5m was made on the sale of shares in an associate, Microspray
Delta, moderating the decline in profit before tax to 22% or #5.6m (2001:
#7.2m). We will recognise a #1m charge for overhead reductions this year,
benefits from which will accrue this year and will increase to at least #2m on
an annual basis. Earnings per share declined by 11% to 17.0 pence, reflecting
the beneficial tax treatment of the exceptional item. The Board is maintaining
an interim dividend of 7.0 pence per share (2001: 7.0 pence per share) which
will be payable on 24 January 2003 to those on the shareholder register on 20
December 2002.
The Group ended the half-year with net cash of #14.8m, after net capital
expenditure of #8.1m in the period and continuing investment in research and
development. Net assets of 269 pence per share demonstrate the strong capital
base of the Group.
Operational Review
Pulmonary
Pulmonary sales, comprising metered dose inhaler valves, medical check valves
and actuators for use in pulmonary drug delivery, have decreased by 11% to
#17.6m (2001: #19.8m). Sales in the first half were adversely impacted by the
dynamics of the US albuterol market, which have affected demand for, and the mix
of, Bespak's CFC valves. Several generic customers built excess inventories last
year in anticipation of winning increased market share but, subsequently have
had to curtail their marketing plans. This will affect our current revenues and
profits as customers continue to reduce excess inventories during the balance of
the year.
Bespak has designed a range of valves for use with the environmentally friendly
HFA propellants, which are replacing CFC propellants. Our 357 and Easifill
valves are under active consideration by a number of current and prospective
customers. As a result, Bespak is working with a wider range of formulations and
with more customers than our competitors - a market leading position confirmed
by the recent extension of our existing relationship with GlaxoSmithKline. This
development contract is to supply our new valve design for HFA formulations,
with full-scale commercialisation predicted for 2005.
To cope with this rising demand, we are at an advanced stage of construction of
a new valve manufacturing facility in King's Lynn, Norfolk, which will expand
our capacity and improve manufacturing efficiencies. This new facility will be
operational by January 2003 and fully occupied during the summer.
In April, we signed an agreement with DEKA Research Corp. of Manchester, New
Hampshire to develop a new respiratory delivery system that ensures a consistent
dose, thereby removing the variability associated with existing systems. DEKA
will deliver prototypes of the device ahead of plan in January for evaluation by
customers and potential partners in order to assess commercial viability.
Device & Manufacturing Services
This business provides a comprehensive range of device-related services to
pharmaceutical and drug delivery companies. Sales increased by 3% to #20.1m
(2001: #19.4m) despite the price reductions, assisted by growth of a product
newly produced at our plant in Raleigh, North Carolina for Abbott Laboratories.
As a direct result of the strategy implemented last year, Bespak is now working
on a significant number of exciting new opportunities.
Bespak has been contracted by Inhale Therapeutics to develop and manufacture the
device for delivering Pfizer's inhaled insulin, Exubera. Pfizer announced in
October that it would complete additional long-term clinical studies on Exubera,
which are already underway. Pfizer also re-iterated its commitment to Exubera as
an important new treatment for millions of patients with diabetes and that it
was continuing its discussions with regulatory agencies regarding the timing of
its Exubera submissions. These additional studies and continued discussions have
caused us to change our assumptions about the timing of commercial production of
this device, therefore we have not included such revenues in our projections for
this financial year or next. Nevertheless, service revenues with Inhale were
higher than in the preceding half-year period.
We also announced in our November statement that we had been adversely affected
by the announced delay of the launch of Weston Medical's Intraject needleless
injector until 2005. Bespak continues to work with, and support, Weston Medical
in industrialising this device.
Nasal
Bespak's vision is to become the leading developer of systems to deliver drugs
to the bloodstream through the nasal mucosa. Nasal drug delivery can provide
more rapid onset and improved bioavailability of drugs. Our strategy is to build
a portfolio of nasal technologies, developed in-house and via external
collaborations.
Our work with Lyfjathroun, a leading nasal drug delivery company, on drug
formulations based on its proprietary technology, has exceeded milestones. We
announced last month that we had increased our funding commitment substantially.
Lyfjathroun has produced early data that indicates substantially lower
time-to-onset and improved bioavailability of a well-known nasally administered
drug.
Other programmes include our PEGylated nano- and microparticle programme, which
encapsulates a range of drugs in carrier particles, transports them across
mucosal barriers and releases the drugs over time into the bloodstream. We have
successfully developed a range of particle systems which encapsulate drugs for
nasal administration. Following administration, the drugs have been detected in
the blood stream for at least 24 hours, thereby confirming the successful
passage of the molecules through the nasal mucosa.
Finally, in line with our nasal strategy to decrease risk and advance
time-to-market we continue to evaluate potential acquisitions that would provide
additional capabilities in formulation, laboratory and clinical trials, and
regulatory expertise.
Consumer Dispensers
Recently, we announced the sale of our shares in an associated company,
Microspray Delta, for a profit of #1.5m on proceeds of #2.4m. Microspray Delta
is our former partner in Bespak Consumer Dispensers, which develops and
manufactures valves and pumps for toiletries and consumer-packaged goods. As
part of the sale, Bespak gains access to all world markets for one of our
consumer products.
Management Update
Recently, we announced the appointment of Jack Cashman as non-executive
director. Jack is non-executive Chairman of Vectura plc, a private UK pulmonary
drug delivery company, and was formerly Chairman and co-CEO of R.P. Scherer, the
world's largest manufacturer of soft gelatine capsules.
As announced in November, Robert Preece stepped down as Group Finance Director.
The Board would like to thank Robert for his contribution to the Group over the
past 7 years. Robert has been replaced by Martin Hopcroft, an external
appointment. Martin joins Bespak from Kvaerner Oil & Gas, where he was Chief
Financial Officer and prior to this he was Group Finance Director of Darby Group
plc.
The Board is delighted to have strengthened Bespak's senior team with these two
outstanding appointments.
Outlook
As previously announced in the statement of 5 November 2002, full year revenues
will continue to be adversely affected by the DMS product price decrease and the
absence of expected CFC valve volumes. Revenues in the next financial year are
then expected to show modest growth. We will incur a charge of #1m in the
second-half of this financial year, which will produce at least #2m of overhead
savings in the next financial year. We are committed to maintaining the dividend
this year and in the medium-term.
Although this year is proving difficult, we remain convinced that building
Bespak into a drug delivery company with its own intellectual property will
generate greater growth prospects.
Mark Throdahl
Chief Executive
12 December 2002
Consolidated Profit and Loss Account
For the 26 Weeks to 1 November 2002
Unaudited Unaudited Audited
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
Re-presented Re-presented
(Note 1) (Note 1)
Notes #000 #000 #000
Turnover 2 41,397 43,119 91,506
Operating expenses (37,910) (36,355) (77,296)
Group operating profit 2 3,487 6,764 14,210
Share of net operating profit of
joint ventures and associates
Continuing operations (18) (42) (102)
Discontinued operations 385 193 327
Total operating profit 3,854 6,915 14,435
Profit on sale of interest in
associated company 3 1,502 - -
Net interest receivable 4 285 291 596
Profit on ordinary activities
before taxation 5,641 7,206 15,031
Taxation 5 (1,118) (2,160) (4,068)
Profit on ordinary activities
after taxation 4,523 5,046 10,963
Dividends 6 (1,859) (1,857) (5,068)
Retained profit 2,664 3,189 5,895
Dividends per 10p ordinary
share (pence) 6 7.0p 7.0p 19.1p
Basic earnings per 10p ordinary
share (pence) 7 17.0p 19.0p 41.3p
Diluted earnings per 10p
ordinary share (pence) 7 17.0p 18.9p 41.0p
Consolidated Balance Sheet
At 1 November 2002
Unaudited Unaudited Audited
1 November 2 November 3 May
2002 2001 2002
Notes #000 #000 #000
Fixed assets
Intangible assets 540 463 437
Tangible assets 62,273 58,073 57,991
Investments 1,631 1,756 2,448
64,444 60,292 60,876
Current assets
Stocks 3,729 3,936 3,387
Debtors 11,904 13,134 10,171
Short-term investments 22,206 25,055 31,473
Cash at bank and in hand 1,929 1,070 2,892
39,768 43,195 47,923
Creditors
Amounts falling due within one year 8 (26,252) (29,993) (31,322)
Net current assets 13,516 13,202 16,601
Total assets less current liabilities 77,960 73,494 77,477
Creditors: Amounts falling due
after more than one year 9 - (2,051) (2,044)
Provisions for liabilities
and charges 10 (5,889) (5,273) (5,730)
Net assets 72,071 66,170 69,703
Capital and reserves
Called up share capital 2,679 2,657 2,679
Share premium account 23,010 21,840 22,988
Profit and loss account 46,382 41,673 44,036
Equity shareholders' funds 72,071 66,170 69,703
Consolidated Cash Flow Statement
For the 26 weeks to 1 November 2002
Unaudited Unaudited Audited
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
#000 #000 #000
Re-presented Re-presented
(Note 1) (Note 1)
Notes #000 #000 #000
Cash (outflow)/inflow from
operating activities 11 (325) 12,179 28,250
Dividends received from
associated companies - 9 87
Returns on investment and servicing
of finance
Interest received 556 623 1,201
Interest paid (255) (307) (553)
Net cash inflow from returns on
investment and servicing of finance 301 316 648
Taxation
UK corporation tax paid (1,495) (907) (3,253)
Overseas tax repaid 14 61 174
Net cash outflow from taxation (1,481) (846) (3,079)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (8,459) (2,197) (4,902)
Payments to acquire intangible fixed assets (133) (67) (67)
Receipts from sales of tangible fixed assets 542 56 146
Purchase of fixed asset investments (61) (18) (19)
Net cash outflow from capital expenditure
and financial investment (8,111) (2,226) (4,842)
Acquisitions and disposals
Receipt from sale of shares in
associated company 2,440 - -
Net cash inflow from disposals 2,440 - -
Equity dividends paid (3,212) (3,021) (4,878)
Net cash (outflow)/inflow before management
of liquid resources and financing (10,388) 6,411 16,186
Management of liquid resources
Movement in short-term deposits 9,267 (5,215) (11,633)
Financing
Issue of shares 22 72 158
Net decrease in loans (1,995) (2,159) (2,183)
Net cash outflow from financing (1,973) (2,087) (2,025)
(Decrease)/increase in net cash (3,094) (891) 2,528
Statement of Group Total Recognised Gains and Losses
Unaudited Unaudited Audited
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
#000 #000 #000
Profit on ordinary activities after taxation 4,523 5,046 10,963
Exchange movements on foreign currency
net investments (318) (87) (110)
Total recognised gains and losses for the
period 4,205 4,959 10,853
Reconciliation of Movements in Group Shareholders' Funds
Unaudited Unaudited Audited
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
#000 #000 #000
Shareholders' funds brought forward 69,703 63,010 63,010
Profit on ordinary activities after taxation 4,523 5,046 10,963
Dividends (1,859) (1,857) (5,068)
Issue of ordinary share capital 22 58 1,228
Exchange movements on foreign currency
net investments (318) (87) (110)
Movement relating to QUEST - - (320)
Shareholders' funds carried forward 72,071 66,170 69,703
Notes to the Interim Accounts
1. Basis of preparation and accounting policies
The unaudited results for the 26 weeks ended 1 November 2002 have been prepared
in accordance with UK generally accepted accounting principles. The accounting
policies applied are those set out in the Group's Annual Report and Accounts for
the 53 weeks ended 3 May 2002.
Certain income in 2001/02 (first half: #171,000; full year #501,000) has been
reclassified from interest receivable to turnover in order to reflect more
fairly the nature of the income. Such income represents amounts invoiced by
reference to the level of the Company's capital investment. This
reclassification does not affect the profit before tax.
The charge for taxation on the profits for the 26 weeks ended 1 November 2002
has been calculated by reference to the estimated effective tax rate for the 52
weeks to 2 May 2003.
The Profit and Loss Account and Cash Flow Statement for the 53 weeks ended, and
the Balance Sheet at 3 May 2002 are an abridged statement of the full Group
Accounts for that period, which have been delivered to the Registrar of
Companies. The report of the Auditors on the Accounts for the 53 weeks ended 3
May 2002 was unqualified and did not contain a statement under either section
237(2) or section 237(3) of the Companies Act 1985.
2. Segment information
The analysis of turnover, net operating income and net assets is as follows:
Turnover by business 26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
Re-presented Re-presented
(Note 1) (Note 1)
#000 #000 #000
Pulmonary 17,622 19,771 42,907
Device & manufacturing services 20,123 19,455 41,454
Consumer dispensers 3,652 3,893 7,145
41,397 43,119 91,506
Average rate of exchange # Sterling: US $ 1.52 1.43 1.43
Geographical area (turnover by destination) 26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
Re-presented Re-presented
(Note 1) (Note 1)
#000 #000 #000
United Kingdom 18,304 21,236 43,314
United States of America 14,157 10,507 23,848
Europe 5,144 8,008 16,923
Rest of the World 3,792 3,368 7,421
41,397 43,119 91,506
Turnover by origin 26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
Re-presented Re-presented
(Note 1) (Note 1)
#000 #000 #000
United Kingdom 36,496 37,626 79,772
United States of America 10,654 9,729 21,535
Total sales 47,150 47,355 101,307
Inter-segment sales (5,753) (4,236) (9,801)
41,397 43,119 91,506
Group operating profit 26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
Re-presented Re-presented
(Note 1) (Note 1)
#000 #000 #000
Group operating profit by segment
United Kingdom 3,502 7,546 15,073
United States of America (15) (782) (863)
3,487 6,764 14,210
Net assets 26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
#000 #000 #000
Operating assets by segment
United Kingdom 52,542 45,403 41,919
United States of America 12,613 14,672 11,943
65,155 60,075 53,862
Unallocated net assets 6,916 6,095 15,841
72,071 66,170 69,703
Closing rate of exchange #1 Sterling: US $ 1.56 1.46 1.47
3. Profit on sale of interest in associated company
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
#000 #000 #000
Profit on sale of interest in associated company 1,502 - -
On 10 October 2002 the Group sold its 40% shareholding in Microspray Delta
S.p.A. for #2.4 million in cash. No goodwill was attributed to the acquisition
of these shares. No taxation liability arises on this gain.
4. Net interest receivable
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
Re-presented Re-presented
(Note 1) (Note 1)
#000 #000 #000
Interest payable
- bank & other interest payable (239) (309) (563)
- joint ventures and associates (13) (9) (23)
(252) (318) (586)
Interest income
- interest receivable on deposits 537 609 1,182
Net interest receivable 285 291 596
5. Taxation
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
#000 #000 #000
Current taxation 791 1,805 3,203
Deferred taxation 166 288 752
Share of taxation of joint ventures and associates 161 67 113
1,118 2,160 4,068
Taxation is based on an estimate of the effective rate of tax which will be
chargeable on the profit for the year.
6. Dividends
The interim dividend of 7.0p (2001: 7.0p) will be paid on 24 January 2003 to
shareholders on the register on 20 December 2002.
7. Earnings per ordinary share
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
The calculation of earnings per ordinary share is based on the following:
Net profit for the period (#000) 4,523 5,046 10,963
Weighted average number of ordinary
shares in issue 26,789,515 26,558,524 26,570,967
Shares owned by Employee Share Ownership Trust (249,466) (53,393) (52,739)
Average number of ordinary shares in issue for
basic earnings 26,540,049 26,505,131 26,518,228
Dilutive impact of share options outstanding 124,709 232,379 193,368
Diluted average number of ordinary shares in issue 26,664,758 26,737,510 26,711,596
Earnings per ordinary share (pence) 17.0 19.0 41.3
Diluted earnings per ordinary share (pence) 17.0 18.9 41.0
8. Creditors - amounts falling due within one year
1 November 2 November 3 May
2002 2001 2002
#000 #000 #000
Proportion of loans due within one year (note 9) 1,945 2,122 2,091
Bank overdrafts & short-term borrowings 7,406 7,018 5,462
Proposed dividend 1,858 1,857 3,211
Taxation 1,870 3,577 2,575
Creditors 13,173 15,419 17,983
26,252 29,993 31,322
9. Creditors - amounts falling due after more than one year
1 November 2 November 3 May
2002 2001 2002
#000 #000 #000
Lease purchase 27 72 48
Bank loan (US $ unsecured) 1,918 4,101 4,087
1,945 4,173 4,135
Less proportion of loans due within one year (1,945) (2,122) (2,091)
- 2,051 2,044
10. Provisions for liabilities and charges
Deferred Post retirement Total
taxation benefits
#000 #000 #000
At 4 May 2002 5,400 330 5,730
Profit and loss account 166 14 180
Exchange rate adjustments - (21) (21)
At 1 November 2002 5,566 323 5,889
11. Net cash (outflow)/inflow from continuing operating activities
Reconciliation of operating profit to net cash flow from operating activities
26 weeks to 27 weeks to 53 weeks to
1 November 2 November 3 May
2002 2001 2002
Re-presented Re-presented
(Note 1) (Note 1)
#000 #000 #000
Group operating profit 3,487 6,764 14,210
Depreciation 3,516 3,341 6,491
Amortisation 30 26 51
Amount written off investment in own shares 128 - -
Loss/(profit) on sale of tangible fixed assets 155 6 (41)
(Increase)/decrease in stocks (386) (472) 87
(Increase)/decrease in debtors (1,932) (1,037) 1,750
(Decrease)/increase in creditors (5,337) 3,534 5,690
Increase in other provisions 14 17 12
Net cash (outflow)/inflow from operating
activities (325) 12,179 28,250
12. Reconciliation of net funds
The table below provides an analysis of net funds and a reconciliation of net
cash flow to movement in net funds.
At 4 May Cash Exchange At 1
2002 flow movements November
2002
#000 #000 #000 #000
Cash at bank and in hand 2,892 (945) (18) 1,929
Bank overdrafts & short-term
borrowings (5,462) (2,149) 205 (7,406)
Net overdrafts (2,570) (3,094) 187 (5,477)
Loans and leasing obligations (4,135) 1,995 195 (1,945)
Short-term deposits 31,473 (9,267) - 22,206
Net funds 24,768 (10,366) 382 14,784
Financing items included in
cash flow movements
Issue of shares (22)
Net cash inflow before and
management of liquid
resources and financing (10,388)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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