New-look SSL reports profits fall

Footcare products and condom maker SSL posted lower-than-expected annual profits today despite higher demand for some of its key brands.

Footcare products and condom maker SSL posted lower-than-expected annual profits today despite higher demand for some of its key brands.

The group, which recently sold its medical businesses in order to concentrate on consumer products, reported healthy sales for its Scholl and Durex brands.

Pre-tax profits, including the results of discontinued businesses and losses on disposal but before exceptional items fell to £53.3m (€79.8m) in the year to March 31, compared with £59.5m (€89m) last year.

Analysts had expected this figure to come in at around £60m (€89.8m).

SSL, which is based at Knutsford, Cheshire, England, began the final phase of the break-up of its medical division last week with the sale of its surgical gloves and antiseptics business.

The move, which followed the disposal of the group’s Marigold industrial gloves business and wound management arm, brought the total raised from the sales to £250m (€374m).

At the bottom line, the group made pre-tax losses of £7.5m (€11.2m), compared with profits of £39.1m (€58.5m) last year. This was due to the disposal of the gloves business as well as increased investment in advertising and marketing.

Group sales were £8.4m (€12.6m) higher at £576.4m (€862.8m) last year, after eliminating sales of Marigold gloves.

Sales of Durex rose 7.4% due to the continued success of Performa condoms and good sales of its new Pleasuremax and Comfort XL ranges. Demand for Scholl’s new Party Feet insoles helped lift footcare sales by 3.7%.

In contrast sales of Scholl footwear were down 4.6% to £73.1m (€109.4m) after a decline in demand in the Asia Pacific region, particularly Thailand, due to increased competition and Sars.

However growth in UK footwear sales, helped by improved distribution in fashion stores, was beginning to be offset this.

Sales of the group’s over-the-counter products also fell by 1.9% as lower demand for hosiery in Italy and Japan offset higher demand for products such as cough medicine in the UK.

Meanwhile other consumer business – which includes unbranded condoms – saw a 16.5% fall in sales to £36.5m (€54.6m).

SSL said the new year had begun “satisfactorily” and added: “We believe that the outlook for the remainder of the year and beyond is promising.”

Chairman Ian Martin said the results and the approaching completion of the disposal plan marked the start of a new era for SSL as a consumer healthcare company.

Shares fell 5p to 308p.

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