Directors' Report

The directors are pleased to present their Annual Report on the affairs of the Group, together with the audited financial statements, for the year ended 30 April 2013. View the Remuneration Report, the Corporate Governance Report and the Corporate Responsibility Review.

The Annual Report has been prepared for, and only for, the members of the Company, as a body, and no other persons. The Group, its directors, employees, agents or advisers, do not accept or assume responsibility to any person to whom this document is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. By their nature, the statements concerning the risks and uncertainties facing the Group in this Annual Report involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this Annual Report and the Group undertakes no obligation to update these forward-looking statements. Nothing in this Annual Report should be construed as a profit forecast.

Principal Activities of the Group

The principal activities of the Group during the year have been the design, development and manufacture of specialty medical drug delivery devices and services to the pharmaceutical industry through its Bespak division and until the divestment of King Systems Corporation on 15 February 2013 disposable airway management products for critical care settings in hospitals and pre-hospital settings through its King Systems division. Our products now include metered dose inhalers, dry powder devices, actuators, dose counters, disposable auto-injectors, and needle-free reusable jet injectors.

Business Review

A review of the Group's business can be found in the Operating Review, Corporate Responsibility, Financial Review and Principal Risks & Uncertainties. This review includes a balanced and comprehensive analysis of the development and performance of the business of the Group and a description of the main trends and factors likely to affect the future development, performance or position of the business at the end of the year, using key performance indicators where appropriate.

Principal Risks and Uncertainties

A description of the Group's principal risks and uncertainties can be found here, which forms part of this Directors' Report.

Product Development and Research Investment

The Group has a programme of continuous investment in its product development activities. During the year, the Group invested £5.2m (FY2012: £4.0m) in research and development expenditure. In accordance with IAS 38, "Intangible Assets", the Group has capitalised £0.9m (FY2012: £0.3m) relating to the King Vision device. This was disposed of as part of the King Systems sale on 15 February 2013.

Key Performance Indicators, Results and Dividends

The financial key performance indicators are revenue from products and services, EBITDA, operating profit, profit before tax, earnings per share (all before special items) and operating cash flow.

Revenues of continuing businesses increased by 4% to £101.4m. Operating profit increased by 10% to £18.1m. Profit before tax increased by 13% to £16.2m. Adjusted basic earnings per share increased by 5% to 54.9p and EBITDA increased by 8.6% to £24.0m.

Following a review of performance, prospects and available funding the directors propose a final dividend for the year of 12.71p per share (FY2012: 12.1p per share) to be paid on 25 October 2013 to shareholders on the register at close of business on 20 September 2013. An interim dividend of 7.0p per share (FY2012: 7.0p) was paid on 15 February 2013, making a total dividend for the year of 19.71p per share (FY2012: 19.1p per share).

Post-Balance Sheet Events

There have been no adjusting or non-adjusting post-balance sheet events.

Future Developments

Details of future developments are set out in Development Portfolio, Our Markets, Our Strategy sections of the Operating Review.


The names of the directors as at the date of this Report, together with brief biographical descriptions, appear in the Board of Directors.

In accordance with section 992 of the Companies Act 2006, the directors disclose that rules regarding the appointment of directors are contained in the Company's Articles of Association, which may only be amended with shareholder approval in accordance with the relevant legislation. The powers given to the directors are contained in the Articles and include, subject to relevant legislation and authority being given to the directors by shareholders in general meeting, authorisation for the Company to issue and buy back its own shares. The Company annually seeks the authority of shareholders for the exercise by the directors of these powers.

All directors are subject to appointment at the next Annual General Meeting following their appointment and to reappointment thereafter at intervals of no more than three years in accordance with the Company's Articles of Association. Accordingly, Mr Glenn will seek reappointment as a director at the forthcoming Annual General Meeting. His biographical details are given here.

Details of the service contract of Mr Glenn can be found in the Remuneration Report.

Directors' Remuneration

The Remuneration Report, which includes information regarding directors' service contracts, appointment arrangements and interests in share options, can be found in the Remuneration Report.

Directors and their Interests

Details of the interests of the directors and their families in the ordinary share capital of the Company, as required to be disclosed in accordance with Rule 3 of the Disclosure and Transparency Rules of the Financial Services Authority (the "DTRs"), are given in the Remuneration Report. There were no changes in the directors' shareholdings between 30 April 2013 and the date of this report.

The Board has agreed procedures for considering and where appropriate authorising directors' situational conflicts. None of the directors had any interest during or at the end of the year in any contract of significance in relation to the business of the Company or its subsidiary undertakings.

Directors' Indemnities

Qualifying third-party indemnity arrangements for the benefit of all its directors in a form and scope which comply with the requirements of the Companies Act 2006 were in place during the year. These arrangements remain in effect as at the date of this report.

Directors' and Officers' Liability Insurance

Insurance cover is in force in respect of the personal liabilities which may be incurred by directors and officers of the Group in the course of their service with the Group.

Major Shareholdings

As at the date of this report, the Company has received notification from the following institutions of their and their clients' interests which represent 3% or more of the voting rights of the issued share capital of the Company (in accordance with Rule 5 of the DTRs). The number of shares and the percentage interests are as disclosed at the date on which the interests were notified to the Company.

ShareholderNumber of sharesInterest in
issued shares
Schroder Investment Management3,485,59211.941%
Montanaro Asset Management2,125,7397.28%
Aviva Investors Global Services1,484,1025.08%
Artemis Investment Management1,464,4045.06%
BlackRock Group1,453,1505.02%
Kaupthing Bank1,173,5324.05%
Polar Capital LLP900,6553.08%
Legal & General Group plc884,9383.02%

Payment Policy

It is Group policy to agree payment terms individually with suppliers and to abide by these terms subject to satisfactory performance of the relevant transaction. The Group's average creditor payment period at 30 April 2013 was 41 days (2012: 44 days) and that of the Company was 14 days (2012: 30 days).


The Group is an equal opportunities employer. It is committed to giving fair and equal treatment to all employees and job applicants in terms of recruitment, pay conditions, promotions, training and all employment matters regardless of their race, sex, ethnic background or religious beliefs, sexual orientation or disabilities. An equal opportunities policy is in force which aims to ensure that all employees are selected, trained, compensated, promoted and transferred solely on the strength of their ability, skills, qualifications and merit. The Group also believes that all employees have a right to work in an environment free from discrimination and bullying.

The Group is committed to maximising the level of employee involvement in its business at all levels. Appropriate training is given to enable employees to perform their jobs more competently and to develop their skills and competencies to their full potential. The performance review system allows employees to discuss career opportunities and development and to receive guidance on achieving their goals. In addition, employees are encouraged, through sponsorship or a contribution to costs, to study for job-related qualifications.

The Group is committed to achieving the highest levels of quality. Bespak operates ISO 13485 which is the internationally recognised standard that details the quality management system and design methodology required to develop and manufacture medical devices. Staff working in Bespak operate within this system and are also trained in the regulatory requirements of "Good Manufacturing Practice".

The Group takes a proactive approach to consultation with employees on a variety of work-related issues through the use of consultative forums whose members are elected by staff. Regular briefings are given to staff to keep them informed of matters concerning the business, including financial and economic factors affecting the Group.

The Group operates share option schemes, performance-related bonus schemes and the Company share incentive plan, which employees are encouraged to join.

Information about environmental, ethical, social and community matters is set out in the Corporate Responsibility Review.

Disability Policy

The Group gives full and fair consideration to applications for employment from disabled persons. Opportunities also exist for employees of the Group who become disabled to continue in their employment or to be considered for other open positions in the Group.

Charitable and Political Contributions

During the year the Group made donations to charitable organisations of £16,375 (FY2012: £73,921). Of the total, £16,025 (FY2012: £41,316) was donated to local and educational charities and community development programmes, and £350 (FY2012: £32,605) to healthcare-related charities.

The Company's policy is that no contribution or expenditure is made to or on behalf of any political party. No such contribution or expenditure was made during the year or the prior year.

Significant Agreements — Change of Control

There are a number of significant agreements containing provisions that take effect (including provisions permitting counterparties to terminate agreements) upon a change of control of the Company. These include both commercial and bank loan facilities agreements. Maintaining strong relationships with all counterparties is an important element in the risk management of the business and to help safeguard the Company's interests to help mitigate against any impact resulting from any change of control of the Company should it occur.

Share Capital and Control

Details of the Company's issued share capital are set out in note 24. All of the Company's issued share capital comprises ordinary 10p shares which are fully paid up and rank equally in all respects.

The ordinary shares are listed on the Official List of the London Stock Exchange and are included in the techMARK index. In addition, the Company has entered into a Level 1 American Depositary Receipt (ADR) programme with the Bank of New York Mellon, under which the Company's shares are traded on the over-the-counter market in the form of American Depositary Shares (ADS).

195,717 (FY2012: 65,619) new shares were issued during the year under the Company's SAYE and 2002 ESOS Schemes. No new ordinary shares have been allotted under the Company's share option schemes since the end of the year and up to the date of this report.

Rights Attaching to Shares

The rights attaching to the Company's ordinary shares, in addition to those conferred by law, are set out in the Company's Articles of Association, copies of which can be obtained from Companies House in the UK or from the Company Secretary. The holders of ordinary shares are entitled to receive the Company's reports and accounts, to attend and speak at general meetings of the Company, to appoint proxies and to exercise voting rights and to participation in any distribution of income or capital.

Transfers of Shares

There are no restrictions on the transfer of ordinary shares or on the exercise of voting rights attached to them save where the Company has exercised its rights to suspend their voting rights or to prohibit their transfer following the omission of their holder or any person interested in them to provide the Company with information requested by it in accordance with Part 22 of the Companies Act 2006 or where their holder is precluded from exercising voting rights by the Financial Services Authority Listing Rules or the City Code on Takeovers and Mergers. None of the shares carry any special rights with regard to the control of the Company.

The directors may refuse to register a transfer of ordinary shares where such transfer documents are not lodged by acceptable means or proof of title is required.

Purchase of Own Shares

At the Annual General Meeting on 30 August 2012 shareholders approved a resolution of the Company permitting it to purchase its own shares up to a maximum of 2,902,318 ordinary shares. This resolution remains valid until the conclusion of this year's Annual General Meeting. As at 12 June 2013 the directors had not used this authority. A resolution will be proposed at this year's Annual General Meeting to renew this authority.

The Company operates an independent share ownership trust to acquire shares in the market to satisfy share option plans. During the year the Company's share ownership trust purchased 94,800 ordinary shares on 5 April 2013 at a price of 795.06p each and 30,215 ordinary shares on 12 April 2013 at a price of 792.04p each. The Company's share ownership trust currently holds 511,378 ordinary shares of 10p each representing 1.75% of the Company's issued share capital.

Issue of Shares

At the 2012 Annual General Meeting, shareholders approved a resolution to give the directors authority to allot shares up to an aggregate nominal value of £967,439 and further shares in accordance with ABI guidelines in connection with a rights issue up to an aggregate nominal amount of £1,934,879 (inclusive of £967,439). In addition, shareholders approved a resolution giving the directors a limited power to allot shares for cash in other circumstances. These resolutions remain valid until the conclusion of this year's Annual General Meeting.

A resolution will be proposed at this year's Annual General Meeting to renew these authorities.

Further explanation of the resolutions will be included with the Notice of Annual General Meeting, which will be circulated to shareholders separately.

Share Schemes

A description of the share schemes operated by the Company is set out in the Remuneration Report.

Disclosure of Information to Auditors

In the case of each director, so far as each is aware, there is no relevant audit information of which the Company's auditors are unaware. Each director has taken all the steps he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Annual General Meeting

The 2013 Annual General Meeting of the Company will be held at the Company's registered office, Breakspear Park, Breakspear Way, Hemel Hempstead on 2 September 2013 at 2.00 pm. Details of the resolutions to be proposed, together with the Notice of Meeting, are being sent to shareholders separately and will be posted on the Company's website.

Corporate Governance

The main features of the Group's internal controls and risk management systems in relation to the process for preparing consolidated financial statements can be found in the Corporate Governance Report. The Corporate Governance Report forms part of this Directors' Report and is incorporated into it by cross reference.


PricewaterhouseCoopers LLP are the Company's auditors and a resolution to reappoint them and to authorise the directors to set their remuneration will be proposed at the Annual General Meeting.

Statement of Directors' Responsibilities

The directors are responsible for preparing the Annual Report, the Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group and parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgements and accounting estimates that are reasonable and prudent;
  • state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the directors, whose names and functions are listed in the Board of Directors confirms that, to the best of their knowledge:

  • the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
  • the Directors' Report and divisional Operating Reviews found here include a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

By order of the Board

John Slater

Company Secretary

12 June 2013