A hiatus in leadership, changes in accounting rules and a restructure in manufacturing have taken their toll on separations specialist Whatman, whose sales growth for last year appears stagnant, just 1 per cent up when adjusting for new business and currency movement.
In its trading update for the 12 months ending 31 December the British company said that multiple senior management changes, including the appointment last November of a new CEO, Bill Emhiser, affected sales performance and resulted in manufacturing targets not being met.
But turbulence at the top could possibly continue as rebel shareholders of drug developer SkyePharma are currently battling to install Whatman 's chairman, Bob Thian, as executive chairman of SkyePharma.
Missing a big order for DNA storage technology in the fourth quarter also didn't help matters, but Whatman, blaming disruptions to its supply chain to the necessary integration of its various manufacturing facilities, says the order would now arrive in the first half of 2006, boosting performance then.
The company acquired biotech manufacturer Schleicher & Schuell (S&S) in December 2004, boosting its total sales in 2005 to $194 (€162) million.
Nevertheless, following the introduction of new International Financial Reporting Standards (IFRS) accounting rules, particularly with regard to the impact of currency on borrowings, and taking into account the S&S acquisition and currency movements, savings that Whatman claims has achieved throughout its operations did not prevent earnings before interest, tax and amortization (EBITA) falling just short of market forecasts.
The firm is now looking forward to 6-8 per cent revenue growth in 2006, meeting consensus analysts EBITA expectations.
"The integration of S&S is largely completed and we are well positioned to return to sales growth above the market in 2006," Mr Thian said.
"Although revenues and profits were lower than we hoped, we now have the organisation in place to drive the business forward."
When the company reported its half year results in September, Whatman's market share in the lab and medical separations sector was 16 per cent, ranking it third behind Millipore (35 per cent) and Pall (30 per cent).
In the MedTech field Whatman still ranked fifth, but the addition of S&S had expanded its share from 4 to 6 per cent.
Whatman is organised into three business development units: LabSciences, which focuses on the preparation of non-cellular samples prior to analysis; BioScience, which focuses on the preparation of cellular samples prior to analysis and storage for study of nucleic acids or proteins; and MedTech, which focuses on filtration components for manufacturers of medical devices and clinical diagnostic tests.
Its products range from filter papers and membranes and disposable filtration devices to groundbreaking technology for capturing, archiving and purifying DNA at room temperature.
The company will be announcing its preliminary results on 3 April 2006.