SSL International shares slide as sales of surgical gloves slip

SSL International, the troubled maker of Durex condoms, has hit another snag in its corporate recovery, admitting yesterday that sales of surgical gloves have been below expectations.

The warning sent SSL shares down 20 per cent to 277.5p and prompted analysts to cut their forecasts.

In both the UK, where SSL sells surgeons' gloves to the National Health Service, and in the US, prices have been driven down and wholesalers have reduced their stocks of SSL products.

Brian Buchan, the company's chief executive, said the wholesaler destocking was in part down to improvements in the efficiency of SSL's own supply chain, but was able to offer no comfort that the competitive environment would ease.

"The pressure we are under is whole market phenomenon. We are still growing volumes, but as a result of having to concede on price. There have been price falls of about 7 or 8 per cent in the US, and the UK health service tenders are also very competitive," My Buchan said.

The news is the latest disappointment for a company which has only recently picked itself up from the chaos of 2000, when it admitted dubious marketing practices had led to a world glut of condoms. There has also been disappointment on margins and the company has so far failed in its attempts to sell its Marigold gloves business, which has gone ex-growth.

SSL has shed 300 jobs this year and is likely to cut more when the company completes a review of its manufacturing capabilities by the end of next month.

The company posted a pre-tax profit of £10.6m for the six months to 30 September, compared with £2.4m last year. Turnover growth of 10 per cent to £308.5m was driven by new varieties of Durex condom and other product launches.