Scapa Group Plc - Preliminary Results

Group Financial Highlights:

·      Delivered record revenue and trading profit1

·      Revenue grew 7.0% to £311.8m (2018: £291.5m); 6.9% on a constant currency basis2

·      Trading profit¹ increased 10.7% to £38.2m (2018: £34.5m); 10.1% on a constant currency basis2

·      Adjusted earnings per share3 increased 3.8% to 18.9p (2018: 18.2p)

·      Basic earnings per share of 5.3p (2018: 15.4p); reflecting business reorganisation and site closures

·      Adjusted net debt4 of £43.7m (2018: £3.8m) is after the acquisition of the Systagenix manufacturing facility for a cash consideration of £34.0m and includes the one-off stock build of £2.9m for the Dunstable and Knoxville site moves

·      Pension deficit significantly reduced to £8.4m (2018: £21.0m)

·      Final dividend increased 20.8% to 2.9p (2018: 2.4p)

 

Group Operational Highlights:

·      Investment in Board and executive leadership teams with key appointments, including Oskar Zahn as Chief Financial Officer, Joe Doherty as an Executive Director and Healthcare President, Sevan Demirdogen as an Executive Director and President & Vice-President, and Juliet Thompson as a Non-Executive Director

·      Heejae Chae intends to step down as Group Chief Executive (announced today - see separate press release)

 

Divisional Highlights

 

Healthcare:

·      Revenue increased 25.3% to £141.3m (2018: £112.8m); 24.4% on a constant currency basis2

·      On a continuing basis5 revenue increased 22.1% to £137.7m (2018: £112.8m); 21.2% on a constant currency basis2. This includes the benefit of the BioMed and Systagenix acquisitions

·      Trading profit¹ of £20.9m (2018: £17.4m) is 20.1% higher and on a continuing basis5 is £17.3m (2018: £17.4m)

·      Organic trading profit margins increased to 16.0% (2018: 15.2%)

·      Established two Healthcare Centres of Excellence:

-  Integration of the R&D and manufacturing assets of Systagenix progressing well ahead of expectations in Gargrave, UK

-  Completed investment programme in purpose-built site in Knoxville, US

·      Invested in expanding BioMed capabilities to enhance Scapa's value proposition beyond adhesives to meet customer/market demand

 

Industrial:

·      Revenue of £170.5m (2018: £178.7m) was 4.6% lower due to adverse macro conditions; 4.3% lower on a constant currency basis2

·      Trading profit¹ of £22.3m (2018: £22.5m) and organic trading profit margins increased to 13.1% (2018: 12.6%).

·      Industrial business on track to 15.0% trading profit margin target

·      Continued to focus on Return on Capital Employed (ROCE); cost-to-serve optimisation delivered

·      Asia grew 8.4% predominantly in India; opened a new manufacturing site in Chennai, India, to support the fast-growing Consumer and Automotive markets

 

Commenting on the results Chief Executive, Heejae Chae said:

 

"FY 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 £300m revenue milestone for the first time. The acquisition, by way of a technology transfer of the R&D 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 that we have the right strategy and capabilities in place to continue to deliver."