Biotrace International, the food safety and chemical testing company, yesterday became the latest UK company to warn about the impact of the sliding dollar on its sales.
Biotrace shares fell nearly 14 per cent on concerns over the growing effect of the weak dollar on the company's earnings, closing at 118p. After the acquisition of its US rival International Bioproducts (IBP) in September this year, more than half Biotrace's income now comes from North America.
Ian Johnson, the company's chief executive, said this had hurt sales in 2003 and would continue to have an impact on revenues into next year. "The dollar exposure has come forward as a result of the acquisition in September," Mr Johnson said. "If the dollar remains as it is, it will have an impact on those sales."
The company, which provides equipment for companies to test for bacteria and contamination in food, drug, and cosmetic manufacturing, also supplies the British military with the means to detect biological agents.
Business in this area has been surging because of the conflict in Iraq, and the company had £1.35m of orders in March at the height of the conflict. It supplies the Army with specialist filters to put in vehicles. The filters, which can detect airborne substances, were used in the Gulf War in 1991. Mr Johnson said sales in defence products would be at historic levels this year, but warned that Biotrace expects sales to drop in 2004. "The post-Iraq outlook means that a lot of the threat has been removed there. The pendulum might swing the other way to a lower requirement for such monitoring," he said. Defence products account for about 5 per cent of the company's revenues but are a high-margin area for Biotrace.
Despite currency weakness in the second half of the year, Mr Johnson is confident that Biotrace will meet expectations for this year and he is still predicting "continued growth" in 2004.
Biotrace bought the health-care business Fred Baker Scientific in October 2002, followed by IBP this year. Mr Johnson said Biotrace planned to make more acquisitions to broaden its product range and to improve European distribution.
The company will report its 2003 earnings on 3 March.Reuse content