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Ransom seeks new CEO following turbulent 2007

Written by Lautaro Vargas

Thursday, 20 December 2007

Ransom'soutgoing CEO, Tim Dye The chief executive of Hitchin healthcare company, William Ransom & Son, has paid with his job following the company’s “unacceptable” performance over the last six months. Tim Dye will stand down at the end of January following a wretched 2007, which saw a damaging product recall as well as falls in sales and profitability. “This has been a disappointing and unacceptable performance,” said David Suddens, non-executive chairman of Ransom, commenting on the firm. “The Board needs to achieve greater focus, particularly as UK consumer market conditions are likely to remain unhelpful. “We have a profitable consumer healthcare business which generates cash and which has the potential for growth. The changes announced today are intended to provide the platform for improved performance in the future.” Ransom, the UK’s oldest pharmaceutical firm, suffered a major setback at the beginning of December when the Medicines and Healthcare products Regulatory Agency (MHRA) temporarily suspended part of the company’s manufacturer’s licence for its Witham facility as a result of its concern over elements of the company’s cGMP manufacturing process and documentation. This sparked the MHRA to propose a widespread voluntary product recall, though following representations from Ransom this was soon downgraded to a limited recall for a small number of product batches manufactured at the site. Prior to the intervention of the MHRA, Ransom had anticipated that overall third party sales would increase in the full year, notwithstanding the fall in first half sales to £2.2m (2006: £2.5m). Its current inability to manufacture licensed product at Witham will have an effect on the results for the full year. Ransom said the longer term financial impact arising from the suspension of the licence will be determined by the amount of time it will take the MHRA to reinspect the facility and reinstate the licence. It added that investment into the marketing of a number of new branded products hit the company’s short term profitability. Group sales of £17.6m for the six months ended 30 September 2007 fell marginally below the 2006 figure, though pre-tax profit dropped from £2.0m to £0.6m. This prompted a 25 per cent drop in the company’s share price before settling at 11p a share at close of play, down 15.4 per cent or 2 pence on the day. As well as working on the integration and rationalisation of its many consumer healthcare brands, Ransom said it would review the potential of its contract manufacturing business. Dye follows three other executive directors – David Wilkie, Fred Whitcomb and Steve Quinn – whose businesses had formerly been acquired by Ransom and whose departure was announced in October, prompted by the healthcare division’s poor performance. Dye announced his intention to relinquish his role as chairman in September, to concentrate on the day-to-day management of the company. The search for a permanent successor in his position as chief executive is already underway after Dye and the Board agreed by mutual consent that he would end his tenure as CEO by the end of January 2008, by which time an interim CEO will be in place.

 

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