Record revenues and trading profit for Ahston healthcare specialist

Scapa Group

Ashton-based Scapa Group has delivered record revenues and trading profit for the year to March 31, it announced today.

The group issued a trading update, ahead of announcing its full year results on May 21.

Scapa is a global specialist in adhesive products for the healthcare and industrial sectors.

It said statutory group revenue increased 7% to £311.8m, compared with £291.5m in 2018, and revenue on a continuing basis increased 5.7% to £308.2m, up from £291.5m.

Overall group revenue, trading profit and margins are expected to be in line with market expectations.

In healthcare revenues grew 22.1% on a continuing basis for the year, including the impact of the BioMed and Systagenix acquisitions.

As expected, organic revenue growth in the second half improved 5.1% over the first half, resulting in an overall decline of 3.6% for the year.

Organic trading profit is expected to be in line with the prior year, reflecting improved margin as the group continues to drive its portfolio toward turnkey products.

It said since successfully completing the acquisition of Systagenix, the business has performed ahead of expectations, both in revenue and profit. Integration progresses well with the synergy programme, outlined in October 2018, delivering ahead of schedule.

The group’s industrial division revealed that, as previously guided, revenues declined 4.6% due to adverse macro conditions, particularly in the automotive and European cable markets.

Organic trading profit is expected to be slightly less than the prior year as a result of additional cost incurred at Markel.

Markel is a US-based manufacturer of adhesive floor mats and tacky rollers used in medical clean rooms electronic and industry assembly areas, construction sites and sports venues. Scapa acquired the business in August 2017 for £7.68m.

Excluding the impact of Markel, the margins improved 5.6%, making further good progress toward the medium-term target of 15%.

Adjusted net debt of £43.7m is after the acquisition of the Systagenix manufacturing facility for £34.0m – reflecting the customary closing adjustments post transaction – and includes the impact of the one-off stock build of £2.9m for the Dunstable and Knoxville site moves.

Group chief executive Heejae Chae said: “We reached a milestone of £300m in revenue and delivered a record profit.

“In industrial, we continue to focus on margin improvement and cash generation to support future growth.

“In healthcare, the technology transfer of Systagenix’s R&D and manufacturing capabilities from a strategic partner and customer was a transformative transaction.

“It has enhanced the foundations of our healthcare strategy and provides the capabilities to deliver long-term sustainable growth as we continue to expand our offering across the complete value chain.”

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