Amersham aided by devaluation

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The Independent Online
STERLING'S devaluation last year was the key factor in a 71 per cent profits surge at Amersham International, the health sciences group.

A pre-tax rise from pounds 10.2m to pounds 17.4m in the half-year to 30 September was struck on turnover up 23 per cent to pounds 153.7m. Turnover included a first-time contribution of pounds 15.8m from US Biochemical Corporation, bought for pounds 13.3m.

The shares fell 11p to 927p. Suggestions that there was little underlying growth at the company were rejected. Bill Castell, group chief executive, said: 'We have also seen underlying growth across our businesses, where trading conditions in a number of sectors have continued to be difficult.

'With good progress in the first six months in bringing branded and patented . . . products to the market, we remain confident that Amersham is well positioned for further growth.'

Amersham, one of the first privatisations, made operating profits of pounds 17.4m, up 79 per cent, including pounds 1.3m from US Biochemical and a net pounds 5.6m from exchange rate movements.

Operating profits in the life science division rose from pounds 9.8m to pounds 15.6m, with the strongest contribution from Japan. In Europe, only trading in Germany worsened. Trials of Amersham's Molecular Biology Robot, which separates DNA, were going well, Mr Castell said.

In the healthcare division, where operating profits rose from pounds 200,000 to pounds 1.5m, new products are doing well. Ceretec, a brain-imaging agent, saw a 15 per cent sales rise to pounds 12m. Metastron, a palliative for cancer patients being co-promoted with Zeneca, achieved sales of pounds 4m in the first half against pounds 1m.

The product was launched in the US in July, and profit growth was held back by the marketing costs. But Metastron's worldwide market could be worth up to pounds 100m. Myoview, a diagnostic heart agent, has received approval in Europe and will be on sale shortly.

Mr Castell said margins saw a big improvement, helped by the move into branded products in the healthcare and life science markets.

Net borrowings were down from pounds 2.6m to pounds 100,000. Spending on research and development rose 21 per cent to pounds 9.2m. Earnings were 18.6p, up 63 per cent. An interim dividend of 4.4p makes a 10 per cent rise.