SSL close to ditching sale of Marigold division
Thursday 17 October 2002
SSL International, the maker of Durex condoms and Scholl odour eaters, is close to abandoning the sale of its Marigold rubber gloves division, which it put up for sale earlier this year with a price tag of up to £30m.
Brian Buchan, the chief executive of SSL, said yesterday that talks with a number of potential bidders, first admitted by the company in July, were proving disappointing.
"We are still in talks, but they are not going as quick as we would have liked. The market is obviously bad. We have said all along that if we do not get an acceptable price, we will keep the business," Mr Buchan said.
The Marigold disposal is planned as one of the most substantial in a string of deals designed to get company debt down and focus the business on key brands.
SSL said that sales of new products such as Scholl foot moisturiser and Durex anaesthetic condoms were helping the company put two years of troubles behind it. Its shares leapt 14 per cent to 311p on relief that the trading update did not amount to another profit warning.
SSL said total sales in the first half would be £305m, broadly in line with market forecasts, although a nudge below its own broker's prediction of £322m. The company has launched a string of new products to extend the reach of its well-known consumer brands, which will contribute more than half the revenue. Sales of medical products, which include surgical gloves, will be flat.
SSL was plunged into chaos in 2000 when it admitted dubious marketing practices had led to a world glut of condoms, and the City lost patience this year when a new management's recovery plan suffered a string of setbacks. SSL shares are trading at a third of their value in 2000.
Mr Buchan said a cost-cutting exercise, which has already led to the loss of 300 jobs, was proceeding according to plan, and said the company was on track to reveal a big shake-up of its manufacturing and distribution operations by the end of the year.
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