SSL disappoints with fall to £13.2m loss

By Stephen Foley
Monday 20 January 2014 03:55

SSL International, the beleaguered maker of Durex condoms, said yesterday that big hikes in advertising spending had failed to halt a slowdown in sales.

Disappointing annual figures from the group were the latest in a long line of poor financial news, dubious trading practices and alleged fraud, sending the shares to the lowest level since the healthcare group was formed from the merger of Seton Scholl and London International in 1999.

SSL is pinning its hopes on new product innovations, such as the "easy-on" condom and flight socks for airline passengers worried about deep vein thrombosis. But figures yesterday revealed tough competition in Western markets.

Analysts said underlying sales growth in the second half had slowed for the group as a whole, despite the company spending £71m on marketing in the past year, up 18 per cent.

The group's UK sales of surgical gloves were disappointing because of cheap imports, while the US market for the product was also tough.

Brian Buchan, brought in as chief executive last year when the previous management was found to have inflated sales figures, said the group still needed to make product acquisitions for an under-used salesforce in Europe.

SSL posted a year- to-March loss of £13.2m, compared to a profit of £25.5m last time. Exceptional charges totalled £33m, including £12m to deal with the previous management's practice of "trade loading".

The company had been artificially inflating sales figures by encouraging wholesalers to take on more stock than they could sell by offering knock-down prices. The practice was estimated to have inflated reported sales by £63m in the year to March 2000. The Serious Fraud Office is investigating SSL's finances after the company also admitted in 2000 that profits had been overstated by £19m.

Mr Buchan said the group was now cashflow positive for the first time since its creation and had met market forecasts for operating profits.

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