Product recall still weighs heavily as Norbrook profits plunge again
A MAJOR product recall nearly two years ago continues to weigh heavily on the financial performance at Newry veterinary pharma firm Norbrook, where millions more have been wiped off its sales and profits.
In what its boss Liam Nagle admitted was "another hugely challenging year", revenues at Norbrook Holdings plunged by 11 per cent to £212 million in the end to last July.
Significantly, operating profits also endured a double-digit percentage fall to just £4.5 million. That's a tenth of the comparable figure of £45 million just two trading years ago.
As revealed in Norbrook's previous set of annual results, the company recalled a Newry-made veterinary injectable drugs product in May 2019 as a precautionary measure over concerns that the sterility of 34 products had been compromised, and their use could result in introduction of infectious agents to animals.
It had emerged at the time that product - mainly destined for the lucrative US market - had been made on an aseptic line that subsequently did not pass process simulation tests.
While business there did take a hit, turnover in the US (where Norbrook does roughly a third of its business along with a third each in the UK/Europe and in the rest of the world) was up 6 per cent on 2019, while Companion Animal sales rose 31 per cent on the previous year.
“We've come through the worst and we'll bounce back from all this,” chairman and chief executive Liam Nagle told the Irish News.
“We knew this time last year that some of those manufacturing and supply issues which we experienced in 2019 would persist into 2020 and the majority of these were resolved and our business had returned to normalised levels of output and supply.
“But obviously no-one predicted Covid, which then presented significant additional issues for us to deal with.
“However, Norbrook continues to invest heavily in R&D, and we are confident in the strong pipeline of products anticipated to launch over the coming years.”
Production stopped for a time at Newry in the early stages of the pandemic, and while around 350 sales and administrative staff continue to work from home, more than 1,000 lab and technical are back at their work stations.
Among other trading highlights last year, company - founded in 1969 by the late Lord Ballyedmond (Edward Haughey) - pumped in another £11 million (5 per cent of revenue) in capital investment, bringing the total cap-ex in the last four years to £63 million.
A number of new products were brought to market in the last year, the most significant of which was Cefenil RTU Injection for the US Farm Animal market.
Mr Nagle also said he expects "some short term logistical problems" in the new year when post-Brexit arrangements kick in, and revealed Norbrook has lined up "additional raw material sources".