Bespak slips up yet again

Bespak has specialised in banana skins over the past two years or so but with yesterday's profits warning, the latest in a string of negative trading statements, it surpassed itself.

Shares in the medical aerosol valve manufacturer have plunged since reaching a high of 707p in March 1993. The latest revelation, that the company is committed to paying £2m a year in royalties for eight years on a product for which not a single customer has been found, saw the shares tumble a further 50p to 253p.

Negotiations are continuing with the developers of the device, a new dry powder inhaler from Innovata Biomed, but brokers believe the resulting charge could approach £12m. On top of that, the company warned that recent problems in America with its largest customer, US Surgical, would lead to a further provision of up to £800,000.

Although trading had improved in the second half, Bespak warned that profits for the year ending this month would be below last year, before charges.

One City estimate suggests those could turn last year's profits of £7.1m into a loss of around £5m.

New chief executive Peter Chambr, formerly of Caradon, said yesterday Bespak was making progress addressing last year's manufacturing problems in North Carolina, while non-US Surgical customers for Tenax Danbury, the other US subsidiary, are at record levels. But he still has a hard struggle to restore Bespak's reputation, particularly with Bob King, the man who signed the Innovata deal back in 1991, still sitting in the chairman's seat. Avoid.