Amersham confounds the sceptics with forecast-beating results

Amersham, the medical research equipment supplier, yesterday confounded the sceptics with a set of interim results that beat the forecasts, despite cutbacks by its big drug company customers.

Sales of discovery systems, machines which allow high-speed analysis of biological material, were "held back by some caution over spending in the pharmaceutical sector for capital equipment", the company said. But the division's losses were cut by £5m to £12m, partly as a result of reduced research and development spending of its own.

Amersham's chief executive, Sir William Castell, said he expected sales growth to pick up from the current 3 per cent later in the year. "Pharmaceutical companies live by innovation," he said. "Some of them may be adjusting their models at the moment."

GlaxoSmithKline and AstraZeneca, in common with many of their global drug company rivals, have recently posted steep falls in the proportion of sales which they have given over to research and development spending. GSK in particular said it had been keeping a tight rein on costs, but would resume spending growth from the third quarter.

Amersham's shares jumped 12p to 515p, after having lost a third of their value since March.

The rest of the group's results comfortably beat analysts' expectations. Group turnover was up 7 per cent to £812m in the first half of the year, with pre-tax profit, before goodwill and exceptional items, up 15 per cent to £159m.

Some analysts had feared a profit warning after the company missed sales forecasts in the first quarter, but Sir William said the company remained on track to meet targets for the full year. The City expects profit growth of 6 per cent this year.

In the event, sales of machines to purify human proteins – sold to researchers and drug manufacturers – offset the weakness in discovery systems.

And sales of its health products, which doctors use to diagnose disease, were particularly strong. Turnover in this side of the business rose 7 per cent to £479m, driven by a 21 per cent rise in patented products such as Myoview for heart scans.