The Investment Column: Bespak investors can breathe easy

Peter Chambre has done a decent job at Bespak since moving over from Caradon to take the chief executive's post at the inhaler manufacturing group in May 1994. He has effectively cleared up the mess caused by an ill-fated contract with ML Laboratories and the mis-timed 1992 acquisition of Tenax, a US maker of plastic parts for medical devices. Yesterday's 46.5p jump in the shares to 527.5p on the back of better-than-expected half-year results to November is therefore well deserved.

The figures also show that he is capable of moving Bespak beyond the recovery phase to generate real growth, even if the 43 per cent jump in pre-tax profits to pounds 5.03m on turnover up just a tenth to pounds 39.4m reflected the benefits of some one-off factors.

The demise of the US patent over the ageing albuterol asthma treatment (better known as Glaxo Wellcome's Ventolin) led to the launch last January of three generic versions, all of which business Bespak won. Filling three new marketing pipelines, on top of those of existing customers Glaxo and Schering Plough, helped valve sales soar by 28 per cent to around pounds 15.4m in the half-year.

Meanwhile, sales continued to build around Glaxo's Acuhaler, the second- generation dry powder inhaler launched in Scandinavia in 1995.

Bespak's turnover in that product alone more than doubled from under pounds 2m to pounds 4.5m in the six months as the drugs giant rolled the product out across Europe.

Mr Chambre says about half the first-half profits growth came from higher volumes inflated by these developments and concedes that growth will slow from here on. Even so, Bespak can look forward to cashing in on the continuing 6 per cent growth in the US asthma inhaler market and has plenty else to look forward to.

The two-year restructuring of Tenax is nearly complete. The business should be back in profit in the second half, aided by the delayed launch of a new product. There should also be further benefits from sprucing up Bespak's manufacturing efficiency, which, with better customer service and lower costs, is said to have delivered the other half of the first- half profits rise.

Bespak's chances of picking up the manufacturing for the Acuhaler's US launch in 1998 have been improved by Glaxo's decision to raise its maximum order with the group from 10 million to 15 million units a year.

Its credibility is also enhanced by the announcement that Roger Mann, finance director at Siebe, is joining the board.

The only clouds are the switch to non-CFC propellants in inhalers, which could disrupt the market up to 2000, and the half-year collapse in profits in the relatively small personal care division. But even on a prospective p/e ratio of 18, assuming full-year profits of pounds 11m, the shares should have further to go.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
News
people
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches