William Ransom & Son plc plans Site Sale: Reorganisation should yield cash and operational cost benefits
London (ots)
William Ransom, the natural healthcare company, today confirmed that it is considering the sale of its valuable Hitchin town centre site for residential development. A reorganisation would produce operational savings as pharmaceutical manufacture is transferred to the company's Witham site. Cash from the site sale would be used for the continued growth of the consumer healthcare division as well as for investment in the expansion of the Witham plant and the creation of a state-of-the-art botanical extraction facility in the Hitchin area.
William Ransom & Son PLC, the Hitchin-based natural healthcare company, today announced that it is considering selling its 4.3 acre Hitchin town centre site. Under the plans, pharmaceutical manufacturing would be transferred to the company's site in Witham, Essex, while some of the site sale proceeds would be invested in a new botanical extraction plant in the Hitchin area. The company also anticipates that a sale would realise cash necessary for further acquisitions for its consumer healthcare division.
Overhead reduction and the simplification of the company's traditional business are expected to produce considerable operating efficiencies. The new state-of-the-art botanical extraction facility planned for the Hitchin area will be compliant with impending changes in regulatory standards. It should allow the company to maintain its leading position in the supply of plant extracts to customers in the food, drink and healthcare industries, for which it has been renowned worldwide since its establishment in 1846.
The proposals, if confirmed, would mark an important milestone in the transformation of Ransom in a process which began three years ago. As well as a new Board and senior management team and a move to AIM, the company has adopted and begun implementation of its strategy to become a natural consumer healthcare business through the acquisition and development - using its botanical expertise - of healthcare brands from multi-nationals and private companies. Acquisitions from Roche, Boehringer Ingelheim and of Cariad, a private company, have been made so far.
Consultation with employees on the proposals has begun and, if they are confirmed, it is intended that the level of redundancies at Hitchin would be kept to a minimum by offering as many staff as possible the opportunity to transfer to Witham or to the new extraction facility. The company, nevertheless, expects that the overall headcount of the company would reduce from 190 to 116 as a result of the efficiencies of concentrating pharmaceutical manufacturing at one location. The company would aim to vacate its historic town centre site by the end of 2004.
Ransom believes that its site would be most appropriate for residential development. With the advice of property agents FPD Savills, a shortlist of major developers and housebuilders has been invited to submit proposals for schemes which respect the importance of a large site in Hitchin's historic town centre. In the event that the offers received are regarded as unsatisfactory by the company, the Board intends to submit its own planning application for residential development of the site.
Trading Update
Profit performance of the Consumer Healthcare Division ('CHD') has
been satisfactory so far this year, with a small overall decrease in
branded sales off-set by improved cost control. The brands Metanium
and Pavacol-D are performing well and it is anticipated that Radian
B's UK sales will, having been slightly affected by excessive
competitor advertising spend over the last six months, be improved by
the on-going new product development programme, which has already
yielded new listings in some national accounts. Cariad's streamlined
product range has delivered a good level of profitability. CHD, which
is unlikely to be affected by the proposed site sale, is actively
seeking further complementary acquisitions.In the Pharmaceuticals and Natural Extracts Division, the company has already begun to take operational decisions to facilitate its site move, should the move be confirmed. In particular, it has terminated some contract and other business not earmarked for transfer to its Witham site. This has meant that sales in the first six months, which otherwise would have been ahead of last year, are approximately at the same levels as in the period to 30 September 2002. Furthermore, in the event that the reorganisation plans are confirmed, financial results for the years ending 31 March 2004 and 31 March 2005 would be materially affected by a number of factors associated with moving. These include moving costs themselves, costs and loss of contribution associated with discontinuation of many smaller and unprofitable lines and exceptional items relating to the realisation of the value of the company's freehold site. Ransom would of course seek to keep the effects of the relocation on its continuing business to a minimum and has undertaken extensive planning to ensure customer supplies would not be interrupted.
Timothy Dye, Chairman and Chief Executive said, "The decision to recommend a move from our base of over 150 years has not been an easy one to make. Nevertheless, I am convinced that it is the right thing to do and we will ensure that redundancies are kept to a minimum. As well as realising cash for potential acquisitions, the business move would allow us to reduce overheads significantly by concentration of our pharmaceutical manufacturing business on one site. We would also be able to retain our Hitchin presence by the creation of a new state-of-the-art botanical extraction facility which is compliant with impending regulatory change."
In September, the company announced the appointment of two new non-executive directors when Jacqueline Paterson, Head of Beauty and Lingerie at Marks & Spencer, and William Nabarro, a senior corporate financier, joined the Board.
Ransom's objective is to establish itself as the UK's leading natural consumer healthcare company. The company believes that it is in a strong position to continue to acquire and grow healthcare brands that no longer fit within enlarged multi-national pharmaceutical businesses. Sales for the year to 31 March 2003 grew by 38% to £14.725m, returning the company to a profit before goodwill amortisation of £0.563m. Interim results for the 6 months to 30 September 2003 are expected in mid-November.
This information is provided by RNS
The company news service from the London Stock ExchangeContact:
Timothy Dye
Chief Executive
William Ransom & Son plc
Phone: +44/1462'437615
Robert Howard
Finance Director
William Ransom & Son plc
Phone: +44/1462'437615
Ronel Lehmann
Lehmann Communications plc
Phone: +44/207/266'3020