Healthcare firm suffers £4m pre-tax profit drop due to higher cost of sales
Sheffield-based B Braun Medical has seen revenues increase to £140m but pre-tax profits fall by £4m due to higher costs of sales as it prepares for Brexit and reduced NHS budgets.
Reporting on the year to 31 December 2017, the distributor of healthcare products and equipment said profitability was lower due to higher costs of sales, as well as investments in its sales and marketing capabilities.
Its pre-tax profit for the period was £5.2m (2016: £9.4m) on revenues of £140m, which were up from £133m in the previous year.
Hans Hux, CEO of B Braun, said: “The directors expect that the strength in the core business will lead to continued growth in the 2018 year and for the foreseeable future.”
B Braun’s main customer is the NHS and directors recognised that effects on NHS market pricing will present the firm challenges. Hux said: “The directors have given due consideration to the levels of funding available to the NHS in the medium term. Future pensions shortfalls also represent an area of uncertainty for the business.
“Increased costs arising from Brexit such as currency devaluation and increased administration imports may introduce challenges.”
However, the firm said demand for its products and services was unlikely to decline despite the current pressures on public sector expenditure.
At the end of 2017, the firm began a significant expansion of its Aseptic manufacturing facility to meet demand in its TransCare Homecare service, which provides patient care at home.
“Having invested in staff and systems over recent years, the company’s overriding objective is now to grow profitable revenue commensurate with its long terms goals,” added Hux.
