UPDATE: Consort Medical Sees New Products Driving Growth

17th Jun 2010 11:59

(Adds executive and analyst comment.) By Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Medical device company Consort Medical PLC (CSRT.LN) Thursday reported a 13% decline in fiscal year profit, hurt by lower sales and a restructuring, but said new products like an automatic injector for India's Dr. Reddy's Laboratories Ltd. (500124.BY) will drive growth this year. Consort, which makes valves, actuators and other components for inhalers used for asthma and similar conditions, said its pharmaceutical company customers are showing "considerable interest" in its broader range of products following its 2009 purchase of smaller peer The Medical House, which makes automatic injectors for complex biologic drugs. Chief Executive Jonathan Glenn told reporters new products slated for launch in 2010 and 2011 include auto-injectors for an undisclosed generic medicine from Dr. Reddy's and another drug soon to come to market in the U.S. A major new valve contract and a new suite of products for anesthesia are also expected to contribute to growth, he added. Glenn said he couldn't be more specific for commercial reasons. Glenn said Consort is also seeking acquisitions. It is scouting for businesses that could add new capabilities or products to its Bespak unit, its inhaler business, and companies that could add new products or expand the international reach of its King Systems unit, which makes bags and tubes used in anesthesia. Glenn said Consort is still interested in establishing "a third leg" for its business by acquisition to complement Bespak and King systems. An approach to wound care company Advanced Medical Solutions Group PLC (AMS.LN) earlier this year was rebuffed. Consort Medical Thursday reported a pretax profit of GBP10.5 million for the year to April 30, compared with a profit of GBP12 million a year earlier. Revenue declined 1.5% to GBP118.6 million as customers chose to work through inventories rather than order new components, Consort said. Fewer hospital procedures affected King Systems' earnings. Glenn said both these pressures have now eased. Earnings were weighed on by layoffs and other charges associated with a restructuring of Consort's Bespak facility in King's Lynn, England. Consort maintained its dividend at 12.1 pence a share. Michael King, an analyst at Nomura Code Securities, said Consort's sales and earnings beat his forecasts. However, he maintained a "hold" rating. King said in a note to clients he expects the current fiscal year to be slow for Consort due to issues like pressure on pricing from customers like GlaxoSmithKline PLC (GSK.LN). Still, new products launches may lead Nomura to revisit its opinion on the stock, King said. At 1046 GMT, shares in Consort were flat at 363 pence, underperforming a 0.3% higher Dow Jones U.K. Smaller Companies index. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [email protected] (MORE TO FOLLOW) Dow Jones Newswires June 17, 2010 06:59 ET (10:59 GMT)