21st May 2019 09:59
LONDON (Alliance News) - Scapa Group PLC Chief Executive Heejae Chae is to step down, the firm said Tuesday, as it reported a mixed annual performance despite "record" revenue.
Shares were 12% lower in morning trade at a price of 326.50 pence each.
Chae has headed up the bonding and adhesive products maker for a decade, and he will remain with Scapa to help with a "smooth transition". A search for a new CEO has already begun.
Chair Larry Pentz said: "During his ten-year tenure, Heejae has delivered significant growth, greatly improved efficiency and built firm foundations, setting a strategic blueprint that will continue to drive future growth."
"Under his leadership, the business transformed financially and strategically. Scapa is a high performing global organisation underpinned by an entrepreneurial culture which has delivered significant shareholder value."
"As a result, Scapa is financially stronger with a successful strategy and is well placed to deliver on its many future growth opportunities," Pentz continued.
Scapa also released results for its year ended March 31 on Tuesday, reporting a "record" revenue of GBP311.8 million, up 7.0% on the year before.
Scapa's pretax profit halved to GBP14.9 million from GBP28.8 million, due to GBP12.8 million of one-offs, mainly site closure costs and a goodwill impairment.
Scapa has increased its final dividend by 21% to 2.9 pence a share, with the company not paying an interim dividend.
Looking divisionally, Healthcare revenue climbed 25% to GBP141.3 million, with trading profit rising 20% to GBP20.9 million.
Revenue growth in the unit was helped by two acquisitions, BioMed and Systagenix, but organic revenue at constant currency fell 4.3% due to product launch delays, operational issues at some key customers, and the shutdown of a third-party steriliser in the UK.
Industrial revenue was 4.6% lower, however, at GBP170.5 million due to "adverse" macroeconomic conditions. Trading profit was broadly flat at GBP22.3 million as organic margins improved to 13.1% from 12.6%, with Scapa saying they are on track to reach 15.0%.
"Financial 2019 was a transformational year when Scapa took definitive steps to cement a leading position in Healthcare. We have delivered a record profit and crossed the GBP300 million revenue milestone for the first time," said outgoing CEO Chae.
"The [Healthcare] acquisition, by way of a technology transfer of the research & development and manufacturing assets of Systagenix, advances our offering across the continuum of the Healthcare value chain and validates our strategy. Our Industrial business is now a truly global business that is highly profitable and cash-generative."
"As we enter the next phase of growth, we have refreshed and strengthened our leadership team, which positions us well to meet the increasing demands of our customers. I am confident we have the right strategy and capabilities in place to continue to deliver," Chae concluded.
Related Shares:
SCPA.L