ZENECA, the bioscience group that demerged from ICI last year made
what chairman Sir Denys Henderson called ''an encouraging start''.
Speaking at the annual meeting yesterday, he said the profit and cash
performance had been excellent despite difficult conditions.
Zeneca's three businesses -- pharmaceuticals, agrochemicals, and
specialties -- increased their combined sales by 12% to #4400m and their
trading profits before exceptional items by 21% to #713m. Exports did
particularly well, running at #4.6m a day. Zeneca Pharmaceuticals won
its first Queen's Award for Exports since demerger.
Sir Denys drew attention to the resilient performance of the
pharmaceutical division in spite of government healthcare reforms in
several of its major markets. Zeneca's pharmaceutical sales held up well
with newer products growing strongly. This has continued into the first
three months of the current year.
Reforms in the Common Agricultural Policy in Europe led to a 3%
decline in Zeneca's European agrochemical sales, this was offset by 14%
growth in worldwide sales. From a low base given the depth of the
recession, Specialties' sales rose by 10% and its profit by 92%. This
was largely due to various internal measures.
Capital investment for the future was continued with #313m spent in
1993, an increase of 17% on the previous year. Among the investments
were another Quorn plant at Billingham and plans were announced to build
a Gramoxone plant in China, where the group has identified growth
opportunities for its pharmaceuticals and specialties operations.
Spending on research and development grew by 14% to #519m.
In terms of current trading, the agrochemicals market was said to be
more stable than in the comparable period of 1993 and Specialty
Chemicals are trading satisfactorily against the background of improving
economic conditions. The pharmaecutical market is said to be even more
competitive than in 1993 but so far Zeneca's prices have seen little
erosion.
Sir Denys said: ''We have established a sound, international base of
excellent technology on which we can surely build in the years to
come.''
Zeneca's shares were encouraged by the confident tone of the AGM and
rose 8p to 705p. For the current year, the City is looking for profits
to grow by around 19% to #767m.
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