Investment Column: Bespak set for growth
Yesterday's figures showing losses of pounds 14m turning into profits of pounds 16.9m in the year to 3 May overstates the extent of the recovery at the group. Underlying profits actually rose 58 per cent to pounds 8.7m, after stripping out a pounds 10.2m write back of a previous pounds 18.6m provision as a result of resolving the dispute over the near-disastrous inhaler contract entered into with ML Laboratories.
Even so, management are clearly producing the goods. In the UK, the launch of GlaxoWellcome's Accuhaler dry powder inhaler in early 1995 helped drive profits 22 per cent higher to pounds 7.6m. It is generating sales of pounds 5m for Bespak and manufacturing capacity is being expanded. Meanwhile, the valves business has returned to more normal levels after destocking in the previous year.
The once-troubled US business also seems to have turned the corner, with underlying profits quadrupling to pounds 1.2m, before restructuring charges. The Tenax North Carolina inhaler business saw sales rise 27 per cent. Bespak believes it has stabilised the fall off in sales of keyhole surgery products from Tenax Danbury in Connecticut after its main customer, US Surgical, saw its market share plummet.
The prospects for Bespak look brighter than they have for a while. As well as increased Accuhaler sales, it has Medeva's new generic salbutamol inhaler, Rhone-Poulenc Rorer's Ultrahaler (taken over with Fisons) and a couple of new products from ML to look forward to.
Profits of pounds 10m this year would put the shares, up 27p to 420p, on a forward price/earnings ratio of 16. Hold.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
iJobs Money & Business
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...