Trading Statement - October 2019
Scapa Group Ltd (AIM: SCPA) is today providing a period end update for the six months ended 30 September 2019.
The Group’s trading performance for this period is in line with the Board’s expectations. On a statutory basis, revenues grew 14.3% (10.4% on a constant currency basis) predominantly driven by Healthcare and the full period effect of the Systagenix technology transfer. Statutory group trading profits reflect the impact of the loss of the ConvaTec contract and are expected to be approximately 17.0% below last year.
| H1 Statutory Basis | H2 Statutory Basis2 | Organic Growth (excl Syst3 & CVT4) | ||||
|
Growth (reported) |
Growth (constant FX) |
Growth (reported) |
Growth (constant FX) |
Growth (reported) |
Growth (constant FX) |
|
| Healthcare Revenues | 29.2% | 22.7% | 23.0% | 16.75% | 4.6% | -0.4% |
| Industrial Revenues | 3.9% | 1.5% | 3.9% | 1.5% | 3.9% | 1.5% |
| Scapa Group Revenues | 14.3% | 10.4% | 11.7% | 7.9% | 4.1% | 0.8% |
Healthcare revenues on a continuing basis are 23.0% ahead of last year (16.7% on a constant currency basis), despite the loss of ConvaTec volumes. On an organic report basis, revenues grew 4.6%, but were broadly flat on constant currency. We anticipate that the second half of the year will benefit from a strong pipeline of new products and technology transfers from new and existing customers. The cost-out related to restructuring of our footprint is in line with expectations.
Industrial revenues increased 3.9% (1.5% on a constant currency basis) despite strong market headwinds, particularly in the automotive sector. We expect the market-wide challenges to continue.
Adjusted net debt at £49.0m reflects the continuing strong cash generation of the Group.
The Board considers Scapa to be well positioned to make further progress against its strategic, operational and financial objectives and remains confident in the Group’s outlook.
1 Trading profit is before exceptional items, acquisition costs, amortisation of intangible assets and legacy pension costs
2 Excluding IFRS 15 provision release. A contract liability provision was created as a result of the acquisition of Systagenix in line with the requirements of IFRS 15 and this is excluded on a ‘continuing’ basis as it represents a non-cash item. This provision will be released on a straight-line basis over a five-year period, in line with the exclusive supply contract
3 Systagenix
4 ConvaTec
5 Adjusted net debt excludes the £12.0m temporary finance lease for Knoxville site and the impact of IFRS16
For further information:
Scapa Group Ltd - Tel: 0161 301 7430
Heejae Chae – Chief Executive
Oskar Zahn - Chief Financial Officer
Numis Securities Limited - Tel: 020 7260 1000
(Nominated Adviser)
Mark Lander, Freddie Barnfield
Berenberg - Tel: 020 3207 7800
(Joint Broker)
Chris Bowman, Toby Flaux
FTI Consulting - Tel: 020 3727 1000
(Media Relations)
Brett Pollard, Victoria Foster Mitchell
