Soaring sales are a tonic for Seton

Click to follow
The Independent Online
SETON Healthcare yesterday reported a strong rise in sales and profits driven by acquisitions and a continuing switch to self-treatment with over-the-counter medicines, writes Diane Coyle.

Profits before tax rose 39 per cent to pounds 8.45m in the 12 months to 28 February, with turnover 28 per cent higher at pounds 49.4m. Sales of the group's core health care business rose 11 per cent before acquisitions.

Seton spent pounds 5.25m buying over-the-counter brands during the year and has made acquisitions totalling another pounds 6.25m since the year-end.

Iain Cater, chief executive, said: 'We are buying brands to develop them. Our marketing spending has quadrupled since 1990.'

The group also signed agreements for the distribution of its moist wound-healing products, including one with Mitsubishi Plastics in Japan. The products aid healing by keeping wounds moist and preventing dressings from sticking.

The sports and leisure division had a slower year, with sales up 9 per cent and operating profits 16 per cent higher. Seton launched a range of sporting products such as sprays and rubs. It said sales were meeting expectations.

The group spent nearly pounds 5m on a distribution centre in Oldham, Greater Manchester, last year, taking its total capital spending to pounds 6m. Expenditure would return to a more normal level of pounds 2m to pounds 3m in the current year.

Mr Cater said he would be amazed if the year passed without further acquisitions. Small deals would be financed out of cash flow.

For now the group would look for other over-the- counter brands in Britain. In the medium term it would be more interested in acquisitions in continental Europe, where health care reforms are beginning to encourage a trend to self-medication.

Seton increased its dividend by 13 per cent to 6.5p. The shares rose 6p to 318p.