Meconic ends year on a high

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The Independent Online
Meconic, the world's biggest maker of opiates, yesterday rounded off a sparkling maiden year as a listed company with a pounds 6m acquisition and a 40 per cent rise in profits. The Edinburgh-based group saw its shares, which were floated at 135p in June 1995, rise a further 16p to 251p after it announced the purchase of Phoenix Chemicals.

Jim Cook, finance director, said Phoenix represented a very important strategic step for Meconic's existing contract chemical manufacturing operations. The Wirral-based company works with drug companies who have difficulties with the highly reactive processes required to produce the chemical intermediates which go into modern pharmaceuticals. Adding Phoenix's expertise to their own would allow Meconic to offer a broader range of contract manufacturing services to customers and open up the US market, from which the company is banned under United Nations rules restricting the transport and manufacture of opiates.

Meconic is paying an initial pounds 6m in shares and cash for Phoenix, with deferred payments up to pounds 12m depending on results up to the year 2000. Underlying profits at Phoenix were pounds 700,000 on turnover of pounds 3m last year.

The news came as Meconic revealed pre-tax profits up from pounds 4.18m to pounds 5.83m in the year to 3 May, helped by a pounds 439,000 cut in the interest bill.

Meconic's existing contract manufacturing business was the fastest growing part of the group last year, doubling sales to pounds 1.15m. Much of its work involves making products developed by biotechnology groups, such as Shire Pharmaceuticals' galanthamine treatment for Altzheimer's disease and an infant eczema product for the recently floated Phytopharm. Growth should be maintained by further contract wins in the current year.

Sales grew 28 per cent to pounds 5.4m in speciality fine chemicals, despite a slowing in demand in the second half for aloin, a chemical intermediate used in an anti-arthritic drug. Meconic said it expected that to pick up again, but warned of a slow-down in the growth of Bitrex, a bittering agent now used by all the large supermarket groups as an additive to prevent the accidental consumption of household cleaners and the like.

Total sales of the division grew 9 per cent to pounds 27.1m, within which opiates were 8 per cent up and other controlled drugs were ahead by 28 per cent.