Attends Healthcare firm is confident of profit

Mar 3 2010 by Karen Dent, The Journal

A HEALTHCARE hygiene company owned by venture capitalists and based in the North East is poised to move back into the black after two years of successive losses.

Newcastle-based Attends Healthcare, which was formerly part of Procter & Gamble, is confident the business will show a profit when it publishes its next annual results this summer.

The business, which specialises in incontinence products for adults, made a pre-tax loss of £3.9m in the 12 months to June 30 last year, compared to a loss of £3.8m in 2008.

Turnover stood at £102.6m, compared to £99.62m in 2008. Attends, which operates in 11 European countries and has a manufacturing base in Sweden, said it had increased volumes by 3.8% after investing in new machinery.

But the weakness of the pound against the euro and the other European currency it trades in has resulted in a 2.9% fall in average selling prices, while raw material prices increased by 22.8%.

Group CEO James Steele said: “Sterling has fluctuated from 67p to the euro from a peak of £1. We’re now back to around 88p. That has a material impact on the profit.

“Overall, the business has taken a good direction. We are quite happy with our performance.

“We see ourselves as a healthcare business and we are achieving healthcare margins, if you compare us to a healthcare business on the FTSE.

“In the past three years, we have invested nigh on 15m to 20m euros (£13.4m to £17.8m) into our Swedish site. As a consequence, we are more automated, we operate faster. We’ve got a different and leaner operation.”

He said the company, which employs 15 people at its Newcastle headquarters as part of an overall workforce of 474, has been back in the black as of November of last year.

And he is confident new products now hitting the market would spell further success for the company.

Mr Steele said: “We have launched and relaunched in the light to moderate incontinence segment. As a consequence of the investment, what we’ve been bringing to market is a range of leading edge light to moderate incontinence products.

“We’d argue we are the most technically advanced company in the marketplace in that sector.

“The products look good. We’ve got a family of products that are thin, very dry and discreet, and that have taken us a lot of time and effort.

“There is robust growth in that product segment and a lot of interest.”

Attends, which has a mixed market of public sector and private retail customers depending on the particular country, has been owned by a group of investors led by Rutland Partners private equity since 2002.

Mr Steele said the company had the second-best selling incontinence products in the UK and Nordic countries and was number two/three in the Germanic and Low Countries markets.