24th May 2016 09:17
LONDON (Alliance News) - Scapa Group PLC on Tuesday said it was well positioned to make progress in the year ahead and purchased wound dressing manufacturer Euromed Inc, after revenue grew in its financial year that ended in March, but was offset by higher exceptional items costs.
The bonding products manufacturer posted revenue growth of 4.5% to GBP246.7 million in the year to March 31 from GBP236.0 million the year earlier, boosted by a 26% rise in its Healthcare division to GBP93.3 million, from GBP73.9 million, which offset a slight drop in revenue from its industrial division to GBP153.4 million from GBP162.2 million. In light of the total revenue growth, trading profit rose 15% to GBP21.3 million from GBP18.6 million.
However, this growth was hit by a rise in exceptional items costs to GBP6.6 million from GBP500,000 a year earlier, stemming from a pension liability management exercise that concluded in the period, as well as costs relating to the closure of its Swiss site and acquisition-related costs. As such, pretax profit dropped to GBP9.8 million from GBP13.7 million a year earlier.
Scapa raised its full year dividend to 1.75 pence per share from 1.50p, given "the continuing progress and improved performance".
"It has been a year of further progress, and we have taken the necessary steps - strategically, operationally and financially - to ensure Scapa remains well positioned to exploit the opportunities that exist for the business," said Chairman James Wallace.
Elsewhere, Scapa said it was purchasing EuroMed, a US-based manufacturer of wound dressings, for USD35.0 million. Scapa said there was a contingent deferred payment of up to USD7.0 million on top of the initial payment, depending on the company's performance in calendar year 2016.
Scapa said the acquisition will be earnings enhancing in its first full year.
"The acquisition of EuroMed is another key step in the execution of our Healthcare strategy, to become the strategic outsourcing partner of choice for our global customers. EuroMed has a strong and well established history of delivering high quality, innovative products and technologies which will bring added benefit to Scapa Healthcare's customers in advanced wound care and consumer wellness. The acquisition further enhances our capabilities to be the single source for turn-key solutions to our global healthcare customers," said Chief Executive Heejae Chae.
Shares in Scapa were up 1.9% at 250.50p on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
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