Jonathan Glenn Chief Executive Officer



up 5.8%

Good financial and operational performance across the Group

Consort has again delivered good underlying growth across both businesses. Bespak has delivered revenue and underlying EBIT growth with strong sales of its core respiratory products. Aesica has grown its sales with recent contract wins and has achieved a further improvement in its margins. The Group has made good progress in its development pipeline, including its innovative Syrina®/Vapoursoft® master development agreement, and is working on new opportunities with current and potential new customers.

Summary of financial performance

Group revenue increased by 5.8% to £311.1m (FY2017: £294.0m) with underlying growth of 4.4% at constant exchange rates.

EBIT before special items increased by 6.8% to £42.7m (FY2017: £40.0m) and by 5.3% at constant exchange rates.

Special items before tax were £20.9m in the year (FY2017: £13.7m). This comprised: £12.1m of amortisation of acquired intangibles; £4.6m of reorganisation costs; and £4.2m of non-cash impairment charges. These relate to the successful streamlining of the business completed during the year and the one-off impairment of equipment in a non-core activity.

Finance costs at £4.5m were in line with the prior year (FY2017: £4.4m). Group earnings before tax and special items increased by 7.3% to £38.2m (FY2017: £35.6m). Adjusted basic EPS decreased by 0.9% to 64.5p (FY2017: 65.1p) as the previous year included a particularly low tax charge. Basic EPS declined by 28.8% to 32.9p (FY2017: 46.2p) as a result of the restructuring and impairment charges during the year and the low tax charge in the prior year.

Cash generated from operations was £37.1m (FY2017: £48.9m). EBITDA before special items grew £3.7m (7.0%) to £56.4m (FY2017: £52.7m) which was offset by higher capital investments of £22.2m (FY2017: £18.1m) and increased working capital including higher receivables due to the timing of sales. Special items paid in the year were £2.0m (FY2017: £2.7m).

The Group balance sheet remains strong with a net debt position of £95.5m (FY2017: £92.6m), representing gearing of 1.7x Net debt: EBITDA. The Group is appropriately financed with a c.£160m committed multi-currency banking facility.

The Board is proposing an increased final dividend of 13.56p (FY2017: 13.21p), making a total dividend for the year of 21.0p (FY2017: 20.3p).

Delivering the group's strategy

Consort Medical has a well-established strategy, which has four key elements:

1 Driving sustainable organic revenue growth

Consort is driving sales growth through leveraging its strong relationships with existing customers, developing opportunities with new customers and broadening its product offering.

We have deep, long-term contractual relationships with many leading pharmaceutical companies in both Bespak and Aesica, supplying customers with high quality products from our highly regulated facilities. There is a broad range of existing production programmes where we work closely with customers to support their growth strategies. We supplement this with development opportunities by providing innovative solutions utilising our market-leading expertise.

We made good progress in the period including continuing to grow sales of our core respiratory metered dose inhaler (MDI) valves and dry powder inhaler (DPI) devices. We have a strong pipeline of device opportunities and we provide a summary of the more significant Bespak opportunities below. In Aesica, there is also a significant amount of activity on API manufacturing and finished dose development where we continue to quote for a number of new opportunities. We are excited by the opportunities but can only provide a broad overview of what is commercially sensitive information.

2 Delivering margin improvement

The Group has continued its track record of improving underlying EBIT margin. This notably includes an additional 80bps improvement of Aesica's margin during the year. Since the acquisition of Aesica we have made good progress having increased margin from 5.2% at acquisition to 8.8% during this year. Our medium-term margin expectations for the business remain unchanged. Our strategy is to deliver further organic growth and a continued process of improving our operational efficiency. During the year we successfully executed restructuring activities in the UK to streamline the business.

While delivering margin improvement we will continue to invest across the Group in our strong product innovation and development capabilities, both important elements of our growth strategy.

3 Innovating and developing new devices and formulation technologies

Utilising our core expertise and strong relationships, we also partner with pharmaceutical businesses in developing and providing innovative life improving treatments and are committed to investing in patient, clinician and customer driven innovation to create new treatments.

Since 2010, Consort has consistently invested in innovation and expanded from a predominantly respiratory products business to growing positions in a number of attractive markets. We have well-established development programmes in both divisions, including new devices, APIs and finished dose formulations.

Optimising our world-class drug delivery device development and manufacture, together with drug API and finished dose formulation and manufacture within the Group, streamlines and accelerates our pharmaceutical customers' drug route to market. This one-stop capability of being able to develop and manufacture both a drug and its delivery device within a single group is a key differentiator to our competitors.

The Group has continued to broaden its capabilities including growing its medical device business by adding highly innovative proprietary injectable delivery technologies to its well-established respiratory franchise.

Our injectables activities include an innovative gas powered auto-injector technology designed to support the safe operation of single-use syringes capable of injecting higher viscosity liquids. There is a growing demand for products serving this technically challenging area particularly with the growth of large molecule biological drugs which are often highly viscous. We are developing specific products using our proprietary technology, including a significant programme with a leading global biopharmaceutical customer.

We offer sterile oral liquid dose manufacturing as part of our broad range of finished dose capabilities within Aesica. This is supported by our finished dose development team. Our strategy is to further differentiate our capabilities by investing in pre-filled syringe capacity. This will enable the Group to provide a complete range of pre-filled syringe solutions to our customers including our unique auto-injector device technology.

Consort believes that the auto-injector business has the potential to be at least the size of the respiratory franchise in the medium to long term.

We have continued to make good progress particularly on our nasal and injectable technologies and we provide further details on these below.

4 Making selective acquisitions and investments

Consort generates strong free cash flow that supports investment in organic growth and has allowed us to grow the dividend in recent years. The strategy is to supplement this with appropriate strategic investments.

Our non-organic growth strategy is to make selective acquisitions or investments in new geographical markets and complementary technologies that have the potential to broaden our geographic footprint and customer base.

We will continue to review appropriate opportunities that present attractive long-term shareholder value.

Bespak Business Review (Devices)


FY20181FY20171Δ% ReportedΔ% CER2
EBITDA margin %25.8%26.5%
EBIT margin %20.9%21.6%
  1. Underlying figures presented above are defined by our Alternative Performance Measures (APM) methodology.
  2. CER – at constant exchange rates; FY2017 actuals retranslated at the FY2018 average rate.
  3. Before special items of £6.4m that include amortisation of acquired intangibles, reorganisation and impairment costs (FY2017: £0.8m)

Bespak has built a well-established and diverse business of designing, developing and manufacturing high performance medical delivery devices. This business has a strong pipeline of innovative products including: respiratory, injectable, nasal and ocular drug delivery, as well as point of care diagnostics.

Once again, Bespak performed well during the year with increased demand for its broad range of leading advanced medical delivery devices. This growth was with established customers while continuing to invest in and make good progress on development programmes.

Revenue grew 4.8% to £126.9m with good growth of product sales that grew by 12.5% during the period. This includes continued growth in sales of our market leading MDI valves to over 90 commercial products. The broad range of products and programmes has grown over many years and we continue to supplement it with new products including our proprietary EasifillTM MDI primeless valve. We have also continued to see growth in sales of our DPI products. This growth in product sales reflects the successful transition of a number of programmes from development into commercial production.

As anticipated, service revenue decreased during the year to £8.4m (FY2017: £15.8m). This is due to a number of successful development programmes now being reflected as commercial product revenue following approval and launch. In addition, the comparative period included revenue from Nicovations which is no longer in the development pipeline.

Bespak delivered a 1.5% increase in EBIT to £26.5m and maintained a sector leading margin of 20.9%, which was 70bps lower than the particularly high margin in the prior year. This is after our continued investment of our product development resources in our proprietary technology including the development of innovative auto-injectors.

Product development

Bespak has a wide range of production programmes supported by a broad product development pipeline that present further growth opportunities. This development pipeline is across a range of therapeutic areas, including both contract manufacturing and products with our own proprietary intellectual property (IP).

To provide visibility of the business's strong position, we have set out in the table below a summary of our more significant development opportunities recognising that timescales are difficult to predict. For inclusion in the table, projects must have a reasonable expectation of success and are forecast to produce peak annual sales of at least £3m per annum.

We continue to work closely with Mylan in supporting their generic Advair programme. This is subject to Mylan receiving a positive response from the FDA on their resubmitted Abbreviated New Drug Application (ANDA) filing. There is a target action date from the FDA of 27 June 2018. Mylan have recently publicly confirmed that they have been building inventory ahead of a potential launch. If the programme is approved, Bespak's sales outlook will reflect Mylan's launch strategy taking into account the level of inventory that Mylan are already carrying.

We continue to make good progress with the Syrina® / Vapoursoft® auto-injector development contract with our leading global biopharmaceutical customer. This programme is now progressing towards commercialisation with a recent agreement for Bespak to start planning for investments in production processes to support a future potential product launch. This will provide sufficient lead time to prepare the investment in production processes at our Milton Keynes facility to ensure that manufacturing capacity comes on line to support the customer's product launch. Product launch is subject to our customer making the appropriate filing, conducting a clinical trial and gaining regulatory approval. We are also examining additional auto-injector opportunities with this customer and other potential customers.

Further programmes include additional respiratory product opportunities and continued progress on point-of-care, nasal and ocular programmes. The current status of the major programmes in our development pipeline is listed below:

VAL020MDI valveGlobal PharmaProgramme under review by customer
POC010POC Test CartridgeAtlas GeneticsCombined Chlamydia / Gonorrhoea test cartridge development progressing
NAS020Nasal deviceGlobal GenericProgramme under review with customer
DEV610DPIMylanAwaiting FDA approval
NAS030Nasal devicePharma Co.Early stage programme
INJ650ASI® Auto-injectorGlobal GenericEarly stage programme
INJ700Lila® Mix InjectorPharma Co.Development programme on track
IDC300Oral IDCPharma Co.Customer received Complete Response Letter (CRL); Launch still expected in 2018
VAL050MDI valve / actuatorAeropharmDevelopment contract ongoing
OCU050Ocular device/ formulation / fillingOxularEarly stage programme
SYR075Syrina® / Vapoursoft®Global BiopharmaProgressing well to commercialisation

DPI = Dry Powder Inhaler, MDI = Metered Dose Inhaler, POC = Point of Care, IDC = Integrated Dose Counter


The Innovation Team is based in a dedicated facility in Cambridge and continues to work on multiple opportunities. We continue to fund a significant investment in developing our new technology platforms and growing our proprietary technology for a range of opportunities.

We continue to invest in and grow our innovation team due to the growing interest in the injectables franchise from biotech and pharmaceutical companies that complement our current customer portfolio.

In addition, the Bespak proprietary nasal programmes include unique IP protected technology that accurately delivers a single precise dose of a pharmaceutical product to a patient. This Unidose® Xtra product in conjunction with the proposed Aesica sterile fill capability has the potential to provide significant growth opportunities for the Group.

Aesica business review (Drugs)


FY20181FY20171Δ% ReportedΔ% CER2
EBITDA margin %12.8%11.9%
EBIT margin %8.8%8.0%
  1. Underlying figures presented above are defined by our Alternative Performance Measures (APM) methodology.
  2. CER – at constant exchange rates; FY2017 actuals retranslated at the FY2018 average rate.
  3. Before special items of £14.5m that include amortisation of acquired intangibles, reorganisation and impairment costs (FY2017: £12.2m).

Aesica develops, formulates and manufactures APIs and finished dose drugs to the highest quality standards. It has strong and well-established relationships with many of the world's leading pharmaceutical companies and works closely with them to support their growth strategies. Aesica has regulatory approved facilities in the UK, Germany and Italy.

The business performed well with another successive year of sales growth and margin improvement. This included the benefits of successfully streamlining the business during the year.

Aesica revenue grew 6.5% to £184.2m (FY2017: £172.9m) or by 4.2% at constant exchange rates. This included record sales performances in both our German and Italian businesses with increased demand from the established customer base supplemented by opportunities with new customers.

This sales growth includes new business opportunities with new solid dose contracts awarded to our German business. We have gained contracts with new customers based on a strong track record in this market with potential to supply further products in the future.

We are also supporting a customer on a new innovative API. This multi-year supply agreement is for a complicated multi-stage process where we commenced manufacture in the second half of the year.

In addition, we have secured new customers for our semi-continuous processing line and technology installed at the Queenborough site in the UK. We are continuing to explore opportunities with further customers and support them with their development work.

The growth in sales and continued focus on our operational performance has resulted in a 16.5% improvement in EBIT to £16.2m (FY2017: £13.9m) or 12.4% at constant exchange rates. We continue to focus on improving the operational performance of this business including some restructuring activities that were successfully delivered during the period.

Aesica has achieved another successive increase in margin which increased by 80bps to 8.8%. The business has consistently improved its margins since its acquisition in 2014 when it was making a 5.2% return. We remain on track for delivering a double-digit margin from this business.

Business development and innovation

Aesica has deep, long-term relationships with a strong, blue-chip customer base. These relationships are supported by contracts that typically range between three and ten years generating recurring revenues, the majority of which are renewed at their end of term. Our technological and regulatory expertise supports Aesica in providing a broad variety of high quality products to many markets. These long-term relationships from our approved sites enable us to provide additional products and services in partnership with these valued customers.

The Aesica commercial team is focused on a growing number of formulation development and manufacturing opportunities. This includes businesses looking for support on new products and pharmaceutical companies looking to either out-source an activity or change suppliers. Aesica's business development team has a regional structure to ensure that we can effectively support our customers from our manufacturing facilities in the UK, Germany and Italy.

Aesica's track record provides potential customers with an established partner able to provide a high level of service supported by regulatory compliance. We have regular routine compliance audits from many regulatory bodies including the MHRA, FDA, Russian HA and many other regional regulatory authorities. We share our regulatory expertise across the wider Group.

The business has identified a number of attractive business development opportunities with pharmaceutical companies looking to source oral products and has seen further growth in demand for its liquid formulation services at the Pianezza site in Italy. This is supported by an investment under way in an oral production line to increase capacity in this facility which is operating at record levels. We are also planning to invest in pre-filled syringe manufacturing capacity to further expand our capabilities in this growing market.

In addition, we are expanding our packaging capabilities in Germany to support this growing business that has achieved record sales in the year. This is alongside continued strategic investments across the Group in serialisation which facilitates the identification of products at the individual pack level. Aesica is well advanced in developing its service to support and take on customers for the next wave of countries adopting serialisation including many across the EU.

Jonathan Glenn

Chief Executive Officer