SSL plans to sell medical division
Durex-to-Scholl firm SSL International today pledged to sell its medical division and use the proceeds to reduce debt and boost the consumer arm.
The company has been conducting a strategic review in an effort to improve shareholder value after a torrid period which has seen the group’s medical division struggle to match the performance of its consumer brands.
In a statement, SSL said the board knew the importance of developing both the consumer and surgical gloves-based medical divisions and for each to receive adequate resources to be able to compete in global markets.
Chairman Ian Martin said: “We scrutinised the group’s capabilities and opportunities in all its markets and product areas.
“Our firm conclusion is that shareholders’ interests would best be served by focusing resources on driving growth in the consumer business where SSL has two major international brands, Durex and Scholl.”
Sales in all business areas to the end of February were hit by difficult market conditions, the company said, particularly in the US and Italy.
SSL said full-year sales were now expected to be around £620m (€898.9m). Analysts’ consensus estimates had forecast sales of £644m (€933.8m) for the year to March 31.
The news follows slowing sales in the medical division which saw price reductions and wholesaler stock reductions offset volume growth in key US surgical gloves products during the six months to September 30.
SSL was thrown into turmoil in 2001 after it was discovered that sales and profits had been overstated.
New management restructured the business, including through 300 job cuts and moving the head office to London. New products and initiatives were also launched.
The company will issue a full trading update for the year at the end of April with a preliminary results statement due in June when SSL will update shareholders on the disposal.
