Bedpan maker Verna makes a splash overseas
BOLTON-based healthcare products supplier Verna Group is hoping that investments made in a series of new products will help to continue growing sales.
The company, which is run by a management team led by chief executive Karen Haslam, achieved a 9% growth in sales to £32.1m in the year to March 31, while earnings before interest, tax depreciation and amortisation (ebitda) climbed by 18% to £2.7m as a result of what it described as “tight control of overhead costs”.
Once interest charges are taken into account, however, the firm declared pre-tax losses of £2.4m – down from £3m a year earlier.
A directors’ report accompanying the accounts argues that growth of its core Vernacare system of disposable bedpans made from pulp paper products had continued, achieving a 20% uplift in sales in overseas markets for the fifth consecutive year. Sales of its disposable products also increased by 10% in the UK, with revenues from its washbowl breaking the £1m barrier for the first time.
“We continue to make considerable investments overseas and in particular are investing in excess of 10% of our profits in growing our business in the USA, South Africa and our distributor-managed markets,” the report said.
The company sells to 12 distributor-managed territories throughout Europe and the Far East.
Verna also spent £750,000 on factory improvements in Bolton, including the installation of more robotic lines to boost capacity. Increased R&D spend has also led to new products such as the pulp Vernatray and a portering chair – both of which are launching this year after promising field trials, it said.
“In addition, we have invested in additional resource, including an international director and a global marketing director as we continue to internationalise our business.”
Verna Group was the last investment made by Bank of Scotland’s now disbanded Integrated Finance (BOS-IF) team, which backed a £50m secondary buy-out of the group from Legal & General Ventures in February 2008.
However, like other firms in the BOS-IF portfolio, its significant debt pile has since been restructured to a more traditional debt and equity model, with equity in all 40 of the firms being sold to Coller Capital in a £332m deal last month.
Verna’s refinancing, which took place in December, saw more than £15m of loans converted into equity – a deal which Haslam said “puts us on a sounder financial footing”.
The newly-filed accounts show that following the restructuring, Verna Group International’s long term debt fell to £29.5m (£44.1m) and increased its net assets to £11m, compared with a net liability of £2.9m a year earlier.
