North East pharma firm sees profits plummet 40% after delays but insists business will grow
Piramal Healthcare UK manufactures drugs from its facilities in Morpeth and Grangemouth
- 16:00, 2 JUN 2017
Directors at Northumberland pharma firm Piramal Healthcare said they expect to see “reasonable growth” this year despite seeing profits fall by more than 40% in accounts for last year.
The business, which manufactures and packages drugs from its sites at Morpeth and Grangemouth, saw its post-tax profits fall from 4.17m to 2.47m during the year ending December 31 2016.
According to financial director Christopher Leahy the decreased profits were a result of turnover falling by 2m to 73m, largely due to order delays in 2015 and 2017.
The firm’s Morpeth and Grangemouth facilities both specialise in different areas of the pharmaceutical sector, such as API ingredients and oral medication.
In the financial statement accompanying the accounts, Mr Leahy said: “Turnover was slightly down 3% from 75m to 73m compared to 2015, which together with slightly higher operating costs has led to profit after tax falling from 4.1m to 2.4m.
“Timing differences due to some large orders in late 2015 and early 2017 are a key reason behind the dip in turnover in 2016.
“The directors fully expect a reasonable growth in revenues and profit in 2017 as the order book is strong at both businesses.”
Operating costs over the year increased by 2.2% over the year, 36.8m to 37.6m, which also had the effect of lowering profit.
However, the business did receive 367,800 from a government tax incentive scheme, after investing in research and development.
Headcount at the firm also increased during 2016 when it gained 17 members of staff. Thirteen of the new roles were made in the firm’s production division, while Piramal’s administration and support team gained five new members of staff. Research and development gained one new worker, although the sales and marketing team saw its headcount fall by two.
The changes in headcount led to the firm’s overall staffing costs increasing by 400,000 to 28.9m.