UK-based separations specialist Whatman saw its turnover drop in the first half of 2003, but says an ongoing restructuring effort is on track and helped the company improve its operating profit by 85 per cent.
Sales dropped 8 per cent to €40.8 million, with exchange rate effects and the divestment of businesses (Whatman Hemasure and Fitzco) each accounting for around half the decline. Group operating profit before goodwill amortisation and exceptional items was £5.9 million, up from £3.2 million in the first half of 2002 and despite flat like-for-like sales. Again, almost half of this improvement resulted from the divestment programme, with the balance achieved by headcount reductions and cost-cutting.
Bob Thian, Whatman's chairman, said " the restructuring programme is delivering clear improvements in Whatman's performance". He expressed confidence that the group's loss-making business will be turned around under the guidance of the new senior management, namely Howard Kelly (CEO), Phil Greenhalgh (finance director) and Ian Bonnar (operations director).
Sales of filtration and separation products totalled £32.3 million, down 6 per cent and with a 7 per cent dip in the USA. However, the business is expected to meet budget for the year with the shortfall in US sales countered by higher sales in all other major territories.
Whatman's traditional macrofiltration products maintained market share during the half year, although sales of cellulose products were down, while glass products showed some worthwhile growth. Noting that chromatography is being overtaken as a standard laboratory technique, Whatman said that its product range will progressively be restricted to a relatively small number of end users.
Encapsulated media products continued to achieve good sales growth, in both larger-scale laboratory filtration capsules and the GD/X and Mini Uniprep syringe filters used in pharmaceutical applications.
Sales of membrane products were lower than in the first half of 2002, although within this overall decline, there was an increase in sales of higher margin track etched and cellulose nitrate membranes for clinical diagnostic applications.
Whatman's biotechnology business had a difficult half, with sales down 15 per cent to £4.4 million. In addition to the Fitzco sale, the Biometra business in Germany, which manufactured and sold laboratory instruments, was put into voluntary liquidation in July.
The company maintains that the remaining technologies in this product grouping, comprising BioScience products for DNA, RNA and protein purification, storage and retrieval and multiwells used to facilitate laboratory automation, have real potential.