The 267 year old company has had a turbulent time over the last few years, with this latest set of results for the six-months to 30 June showing just how troubled the company is.
In a separate release, the company's Chairman, Bob Thian, has expressed his desire to step down from his position no later than next years AGM (annual general meeting) scheduled to be held on 22 May, 2008.
According to the company, the 28 per cent operating profit plunge from £14.1m for the first half of 2006 to £10.1m for the same period in 2007 was partly fuelled by the 13 per cent drop in sales to £53.7m.
Profits after tax fell by a staggering 69 percent to £5.4m, from £14.6m with the company stating that results had been significantly impacted by adverse currency exchange rates.
Despite the company's poor performance, its board has decided to increase the interim dividend by 4 per cent to 2.18p per share.
"We started 2007 with a weak order book and supply chain and manufacturing issues hampered our ability to fulfil orders. Looking to the second half [of the year], there is a recovery in the order book and the steps we have taken to improve our supply chain problems are now beginning to take effect," said Kieran Murphy, Whatman's CEO.
With group sales declining by 13 per cent, the company claims that the order book coming into the year was 22 per cent below that for the beginning of 2006, however "much of the order book shortfall was recovered during the [first] six months".
The company has only released segmental results based on constant exchange rates that would have led to only an 8 per cent drop in revenue. Based on these figures, the Labsciences division suffered a 2 per cent drop in sales to £32.9m.
The Bioscience and MedTech groups fared much worse, with sales from the Bioscience segment dropping 18 per cent to £12.5m. The MedTech group suffered a 14 per cent drop in revenue to £8.3m.
The depth of the company's troubles is surprising in light of its 2006 results that showed a 5 per cent increase in revenue.
Indeed, a strategic review of the company has been completed and a three year plan to transform operational performance that includes increased R&D investment in its core product lines and especially its membrane technologies.
"The initial phase of our strategic review is complete. This has confirmed our views on the weakness in sales and operations planning and manufacturing processes," said Murphy.
This restructuring plan has already led to a £5.3m non-recurring charge during the first 6 months of 2007 with the company expecting a similar charge in the second part of the year.
These plans include discontinuing loss making and obsolete products and reducing the number of manufacturing sites, centralising its three paper conversion sites into one as well combining its three membrane production sites.
No one from the company was available to comment about the possibility of job losses during this reorganisation at the time of going to press.
The company is already starting to see the effects of the restructuring, with a 2 per cent increase in orders compared to the first half of 2006.
"We have secured valuable new business in the BioScience division, notably with significant orders for FTA," said Murphy.
According to the company, these orders have been boosted by a distribution agreement with Qiagen for the company's DNA collection, transportation and storage FTA product lines.
