Business Review
Chairman’s Statement
In my first statement to you as Chairman, I am very pleased to report that the Company has delivered robust results for the last financial period, notwithstanding challenging market conditions. Consort Medical’s businesses possess strong franchises and profitable platforms, which will underpin a range of opportunities for organic growth over the medium term.
Chief Executive’s Statement
Consort Medical is a leader in the markets in which it operates and we are very proud that what we do has a direct impact on the lives of millions of people every day. As a Group we handle over seven million components every day. Annually, we produce over 500 million devices for our customers. All this is done to exacting standards and requires an expertise that has taken years to develop. Our Bespak Division is celebrating its 50th anniversary this year, having been founded in 1959.
Operating Review: Bespak Division
Bespak is a leading drug delivery device manufacturer which has many of the world’s top pharmaceutical companies as its largest customers. It currently focuses on the inhalation market, with devices used to treat asthma and COPD (Chronic Obstructive Pulmonary Disease). Over 300 million people world wide have been diagnosed with these diseases and Bespak devices deliver around one third of their medication. Bespak moulds or sources over 3bn parts a year in making 500m units, from valves and actuators to complete devices. In January 2009 Joe Barry was appointed as Managing Director of Bespak. Joe had previously delivered success within Bespak’s medical check valve business and subsequently in driving strong international growth for King Systems. He has broad operational and commercial experience gained at companies such as GE.
Operating Review: King Systems Division
King Systems is a leading US manufacturer of medical devices used by anaesthetists and emergency practitioners to establish, manage and maintain airways: our products are used in over 10m operations every year. Products include anaesthesia circuits, masks, breathing bags, laryngeal tubes and visualisation devices. King Systems is one of the market leaders in the US, serving the market with its own direct sales force. International sales are driven through a growing network of distributors. The business is headquartered near Indianapolis, Indiana and employs over 500 people. As previously mentioned, during the year we appointed Don Dumoulin as King Systems Chief Executive Officer. Don has a strong record of achievement at Procter & Gamble, SmithKline Beecham and Roche. He has outlined an exciting strategy for growth based on a targeted investment programme.
Finance Review
Consort Medical plc had a successful period ended 30 April 2009, delivering its forecast earnings and completing a major restructuring on time and on budget following the withdrawal of Pfizer’s Exubera® drug from the market. The Group operates in defensive markets with resilient end customer demand and it further benefits from a strong balance sheet and cash flows. Nonetheless, no market is completely immune from these exceptional economic conditions and volumes and margins in some parts of the business have come under moderate pressure. We continue to take action on costs in order to largely mitigate these pressures. Additionally, we are pleased to announce a three-year restructuring and investment programme to increase margins in both Divisions, most particularly in King Systems where an extensive automation project is expected to yield compelling returns. This period we have consolidated the results of IAC Ltd, a subsidiary which was previously accounted for as an asset held for sale, and we have re-presented the prior period income statement comparatives. The impact of this is disclosed separately below.
Corporate Responsibility Review
Consort Medical plc recognises the importance of the impact its businesses can have on the environment, its customers, shareholders, employees and society at large and focuses where appropriate on opportunities that can have a positive impact in these areas.
We seek to uphold the highest standards of ethical and professional behaviour and are committed to ensuring that our business is managed and developed in a responsible and sustainable manner that is aligned to our business objectives. This commitment is driven by the belief that significant benefits can be realised for all of our stakeholders by pursuing a proactive and consistent corporate responsibility (CR) strategy.