Scapa suffers interim dip but says full year profits will meet expectations

Heejae Chae

Ashton-based Scapa Group suffered a fall in revenues and pre-tax profits for the six months to September 30.

Scapa, a global specialist in adhesive products for the healthcare and industrial sectors, revealed turnover fell from £145.6m to £140.7m, while pre-tax profits of £9.7m compared with £15.4m last year.

However, the firm said its trading profit increased 2.4% to £17.1m, from £16.7m.

Net debt of £5.2m compared with £3.8m, at March 31, and excludes £31.4m paid on October 1, 2018 for the acquisition of the Systagenix manufacturing facility.

The group’s pension deficit reduced to £9.8m from £21m, as at March 31.

Revenues increased in the healthcare division by 0.2% to £57.8m, while the industrial division suffered a 5.7% decrease to £82.9m.

Chief executive, Heejae Chae, said: “The first half has delivered a solid trading performance and continued good progress in the transformation of Scapa from an industrial tape company to a group with two businesses that are global and market leaders.

“The industrial business is one of the leading global tape companies with strong profit margins and cash flow.

“The healthcare business is now a world-leading strategic turn-key partner to major global healthcare companies.”

He added: “The acquisition, by way of a technology transfer, of the R&D and manufacturing assets of Systagenix and the exclusive five-year development and supply agreement for Systagenix advanced wound care products to Acelity is a milestone in Scapa’s development, completing our healthcare journey from a roll stock supplier to a fully integrated healthcare company with extensive technologies and capabilities in the markets we serve.

“We have now completed three technology transfers in the last 12 months with an aggregate annualised revenue exceeding £40m.

“We believe that further opportunities to partner with our healthcare customers exist as the medical device sector undergoes disruption.”

And he said: “Whilst the macro environment remains challenging, we anticipate the profit for the year will be in line with expectations, excluding the impact of the Systagenix healthcare transaction.

“This transformative transaction is expected to be modestly earnings dilutive in the current year and materially accretive from FY20 onwards.”

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