Bespak on solid turf after troubles

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The Independent Online
BY MARTIN FLANAGAN Bespak, the medical equipment maker, where Peter Chambre took over as chief executive last May, said a good platform had been created for future growth after the problems of last year.

However, the City was disquieted by the company's assertion that there were no rapid solutions for its problems in the American market and marked the shares down 8p to 280p.

It took the gloss off a 5.7 per cent rise in taxable profits to £3.04m (£2.89m) in the six months to October. At constant exchange rates the profits advance was 11 per cent as the weakening dollar hit sales of UK manufactured products to US customers.

Bespak, shares of which hit 500p 18 months ago, said problems remained at the Tenax operation in North Carolina, which supplies medical devices. Problems related to the introduction of new tooling and a new product, leading to a drop in profitability.

Tenax Danbury, however, a specialist component supplier to the medical device industry, advanced well.

Mr Chambre said the results of Medix, the breathing equipment manufacturer, were again disappointing. He said it continued to underperform but would not be drawn on whether a sale had been ruled out.

Bespak's dependence on its two main customers, Glaxo and US Surgical, declined in the period. Glaxo now accounts for 19 per cent of sales compared with 24 per cent in the corresponding period; US Surgical now accounts for 14 per cent of Bespak's turnovercompared with 17 per cent last time.

The chief executive said the fall in the US Surgical figure was partly due to the fact that the American company's dominant share of the US abdominal keyhole surgery market was understood to have declined from 85 per cent to 50 per cent.

Bespak's interim dividend is held at 4.2p on earnings up from 7.5p to 7.9p.