Chief Executive's Review

"The Group won its first combined Bespak and Aesica opportunity, covering both device development/manufacturing and fill/finish services"

Jonathan Glenn

Consort has again delivered strong organic growth. In Bespak, this has once again been delivered through strong revenue growth and operating leverage.

Adjusted basic EPS was 20.5% higher than FY2015 at 57.6p

Consort has again delivered strong organic growth. In Bespak, this has once again been delivered through strong revenue growth and operating leverage. In its first full year under Consort ownership, Aesica has now been largely integrated, and delivered improved operating performance resulting in strong organic growth. The Group has achieved continued progress with opportunities in development and innovation.


  • Strong Bespak revenue growth of 10.8%, with significant operating leverage delivering 20.4% EBIT growth and 170bps EBIT margin growth to 21.5%
  • Significant growth in Aesica EBIT following reorganisation actions and streamlined operational performance: organic EBIT up £2.7m, and encouraging EBIT margin growth of 210bps to 7.4%
  • Adjusted basic EPS was 20.5% higher than FY2015 at 57.6p, as a result of the strong operating leverage, and margin expansion
  • Final proposed dividend of 12.56p, an increase of 7.5% reflecting the strong financial performance and the Board's confidence in the Group's prospects
  • Net debt reduction from £99.2m to £97.0m, with gearing (Net debt: EBITDA) at 30 April 2016 reducing to 1.92×, achieving the Group gearing target set at the time of the Aesica acquisition
  • DEV610 unveiled as DPI for Mylan generic Advair; potential GDUFA date 28 March 2017
  • Bespak added two development programmes for Aeropharm, and Precision Ocular (the Group's first combined device/formulation contract)
  • Completion of the semi-continuous line project development, with product approval and launch in Aesica
  • Completion of post-acquisition reorganisation in Aesica, including German reorganisation, relocation of Nottingham FDD to Queenborough, and downscaling of Newcastle office
  • Further progress in joint Bespak/Aesica service offering with enthusiastic market response, and first combined contract win with Precision Ocular
  • Equity investment of £3.3m in Precision Ocular, with £2.0m first tranche paid up
  • Successful commercial unveiling of Syrina® 2.25 compact autoinjector

Summary of Financial Performance

Revenue increased by £92.1m (49.8%) to £276.9m (FY2015: £184.8m) with Bespak delivering continued growth of 10.8% to £117.2m (FY2015: £105.8m). In its first full year in Consort, Aesica revenue grew 102.1% to £159.7m which included organic growth of £1.4m (1.8%) and acquisition growth of £80.1m (101.4%) at constant exchange rates.

EBIT before special items increased by 47.6% to £37.0m (FY2015: £25.1m). This included 20.4% growth from Bespak to £25.2m (FY2015: £20.9m), which continues to deliver strong operating leverage from higher revenues. Bespak EBIT margin increased by 170bps to 21.5%. Aesica EBIT increased 185.0% to £11.8m, with EBIT margin growing 210bps to 7.4% reflecting strong organic growth from volume and improved operating performance of £2.7m (64.9%), and acquisition growth of £5.0m (121.5%) at constant exchange rates.

Special items amounted to £21.0m in the year (FY2015: £17.2m): this comprises amortisation of intangibles, Aesica integration reorganisation costs, advisory and acquisition costs.

Finance costs grew 99.4% to £4.7m (FY2015: £2.4m), reflecting the first full year of borrowings following the acquisition of Aesica. Group Earnings before tax and special items increased by 42.2% to £32.3m (FY2015: £22.7m). Adjusted basic EPS increased by 20.5% to 57.6p per share (FY2015: 47.8p). Basic EPS increased by 152.2% to 30.7p per share (FY2015: 12.2p).

Cash generated from operations1 increased by £25.7m to £54.1m (FY2015: £28.4m). EBITDA before special items grew £15.1m (45.3%) to £48.3m (FY2015: £33.2m). Bespak EBITDA grew 16.0% to £30.4m, with Aesica adding 154.6% of EBITDA to £17.9m. Working capital decreased £20.2m to £14.0m (FY2015: £34.1m), which represents 5.0% of sales (FY2015: 12.3%). Capital expenditure of £21.5m (FY2015: £20.7m) included £12.7m from Bespak (FY2015: £16.9m), as expenditure on the significant planned investments in facilities and production capacity for DEV200 and DEV610 neared completion, and £8.8m from Aesica in its first full year within Consort.

The Group balance sheet closed with a net debt position of £97.0m (FY2015: £99.2m), representing gearing of 1.92× Net debt: EBITDA, comfortably within the banking facility covenant (maximum 3.0×) and in line with our expectations communicated at the time of the Aesica acquisition of below 2.0×. Interest cover was 13.8× against a covenant minimum of 3.0×. The Group has comfortable cash resource availability, with total committed facilities of £161.2m.

The Board is proposing an increased final dividend of 12.56p (FY2015: 11.68p), making a total dividend for the year of 19.31p (FY2015: 18.11p).

Further commentary on the financial results is contained in the Bespak and Aesica business reviews below and within the Financial Review.

Joint Bespak/Aesica Commercial Activities

A core objective of the acquisition of Aesica was to harness, over time, significant cross-selling opportunities, and to secure development and manufacturing opportunities for combined drug and device services. The Bespak and Aesica commercial teams have continued working closely together in a joint mission, to facilitate introductions for their sister division's commercial teams to access their core customer relationships, and to work together jointly to secure combined formulation and device contracts.

Since the acquisition, a number of joint Bespak and Aesica meetings have been held with customers and the consequent reaction has been encouraging.

In addition, cross-selling introductions have led to firm enquiries in a variety of device opportunities for Bespak, for both customer and Bespak IP platforms.

In October 2015, the Group launched its new branding at the CPHI exhibition in Madrid. This is the largest global trade event for the pharma services industry and Bespak and Aesica exhibited together on the same stand drawing a significant amount of new and existing customer interest and enquiries.

In February 2016, the Group won its first combined Bespak and Aesica opportunity, securing an important development and supply agreement, covering both device development/manufacturing and fill/finish services with Precision Ocular for their novel ocular device and drug applications. This exciting new partnership will draw on the skills and expertise of both Bespak and Aesica, and is an important demonstration of the value of our single solution for device and drug combinations. In addition, it extends our competencies into the ocular therapeutic area in line with our stated strategy. A significant attraction for Precision Ocular was Consort's ability to offer a "one stop shop" for development and eventual commercial manufacture of the final filled, finished and packaged product.

Investment in Precision Ocular

Following the signing of a development agreement with Precision Ocular for the development and manufacturing of the novel delivery device technology and fill finish, Consort subscribed to an equity financing completed by Precision Ocular. The financing will raise a total of £13.5m. Investors include Imperial Innovations, Hovione, NeoMed and Consort. Of the £13.5m equity raise, Consort's investment is expected to be a total of £3.3m, of which the first tranche was £2.0m, giving the Group a 12.2% shareholding, rising to 13.7% after the second tranche. Consort Medical also has a Board seat at Precision Ocular.

We believe Precision Ocular's proprietary drug products and drug delivery system has the potential to be a platform technology with broad applicability. Precision Ocular's novel drug products and drug delivery system is designed to access specific small spaces in the eye and to provide unique drug distribution to tissues specifically involved in retinal diseases. This unique approach effectively optimizes the pharmacokinetics and pharmacodynamics of both existing and new ophthalmic therapeutic agents. It may also increase therapeutic effectiveness, reduce side effects and minimize the frequency of treatment for certain patient groups.

Consort is a leading company in innovation and our participation in Precision Ocular's equity financing once again highlights our commitment to investing in companies that are at the forefront of the development of new treatments, new markets and new opportunities.


  1. Cash flow performance metrics are before any cash paid relating to special items.

Bespak Business Review


EBITDA margin %26.0%24.8%
EBIT margin %21.5%19.8%

Bespak has a well-established and diverse core business of products in volume manufacturing. Once again, the business performed strongly in the year with the production of the 2 billionth HFA pMDI valve, as well as winning two new development contracts.

Revenue grew 10.8% to £117.2m with growth in all segments. MDI produced a particularly strong revenue performance with 7.1% growth, especially in valve sales. DPI grew revenue 1.6% with continuing growth from the Chiesi NEXThaler. Other sales continued this trend with growth of 49.3%, including a doubling of sales in Injectables. Included in these segments, service revenue also continued its strong contribution given the growing development and innovation pipelines.

Overall, with all segments growing, the positive diversification trend has continued, with the proportion of sales by segment for MDI at 51.1% (FY2015: 52.9%), DPI at 31.2% (FY2015: 34.0%), and Other 17.7% (FY2015: 13.2%). In 2012, Other sales were just 8.0% of Bespak's total sales, and have therefore more than doubled in the last four years, delivering on our diversification strategy.

The strong revenue performance significantly translated to EBIT growth, which increased 20.4% to £25.2m, delivering strong operating leverage from the increased volume and further benefits driven from continuous improvement initiatives as EBIT margin increased 170bps to 21.5%.

Product Development

In line with our strategy, we have assembled a full and broad product development pipeline of organic growth opportunities, which will add to the strength of the core business going forwards. Successful conversion of these opportunities will provide progressive revenue and profit growth, in both contract manufacturing and products with our own proprietary IP and across a range of therapeutic areas, including commercial drug handling.

Our published development portfolio provides an update on the key business development projects in the business. We guide that for inclusion in the published portfolio, projects must have a reasonable expectation of success, though timescales are difficult to predict, and be expected to produce peak annual sales of at least £3m per annum.

In the period, we successfully added two new projects to our development pipeline. These include one respiratory project and one ocular, which is Bespak's first project in this therapeutic area:

  • VAL050 is a significant new development and supply agreement for our proprietary pMDI valve and actuator technology for Aeropharm GmbH, a Sandoz company
  • OCU050 is a development contract for Precision Ocular for their novel drug products and drug delivery system, which is designed to access specific small spaces in the eye and to provide unique drug distribution to tissues specifically involved in retinal diseases

With the addition of the two new programmes, the portfolio has grown to 14 live programmes. The status of the major programmes currently in our development pipeline is listed below:

VAL310Easifill primeless valveUS PharmaAwaiting regulatory approval
INJ570Auto-injectorGlobal PharmaAwaiting regulatory approval
VAL020MDI valveGlobal PharmaStability trials complete; customer progressing towards approval and launch
DEV200Nicotine deliveryNicovationsWe remain committed to the delivery of the product for successful launch which we are hopeful of in the next 12 months
POC010POC Test CartridgeAtlas GeneticsCE marking granted for Chlamydia; Combined Chlamydia/Gonorrhoea test cartridge development progressing
NAS020Nasal deviceGlobal PharmaFormulation change; brief under review
DEV610DPIMylanPotential GDUFA date 28 March 2017
NAS030Nasal devicePharma Co.Early stage programme
INJ600PatchPump® for TreprostinelSteadyMed Therapeutics Inc.Good progress made. NDA submission planned Q4 2016
INJ650ASI® Auto-injectorGlobal GenericContinuing progress; early stage
INJ700Lila Mix® InjectorPharma Co.Development programme on track
IDC300Oral IDCPharma Co.Good progress; launch expected H1 2017
VAL050pMDI valve/actuatorAeropharmAwarded November 2015
OCU050Ophthalmic drug deliveryPrecision OcularAwarded February 2016; first combined Bespak/Aesica programme

DPI = Dry Powder Inhaler, MDI = Metered Dose Inhaler, POC = Point of Care, IDC = Integrated Dose Counter

From the existing programmes in the pipeline, the following are the most notable updates:

  • VAL020: following the completion of stability trials, the pMDI valve has received customer approval, and regulatory approval planning follows
  • DEV200: the Voke inhaler is a technically complex design which presents a number of challenges. We remain committed to the delivery of the product for successful launch, which we are hopeful of in the next 12 months
  • DEV610: solid progress with device validations. DEV610 unveiled as DPI for Mylan generic Advair; potential GDUFA date 28 March 2017


The Innovation team has continued to be highly active on a number of fronts over the past year. The team has now grown to 22 people at its own dedicated facilities in Cambridge, and we plan to grow this further during the forthcoming year.

The commercial and innovation teams continue to generate very strong interest in our new technology platforms on a range of opportunities. The Innovation pipeline has progressed broadly during the period across a number of therapeutic areas and technologies.

Syrina®, Lila® and Lapas® Update

Following the commercial unveiling of Vapoursoft®, Syrina®, Lila®, and Lapas®, we continue to generate widespread interest from several pharma companies with injectable drug portfolios. At present, we have an active portfolio of two early stage Vapoursoft® powered Syrina® auto-injector development programmes.

We have two programmes actively developing the Lila® Mix and Duo technologies. We also have one early stage development programme centred on our Vapoursoft® powered Lapas® technology.

Launch of Bespak's Syrina® 2.25 Auto-injector

In November 2015, Bespak unveiled its latest addition to the Syrina® range of auto-injectors at the PDA Europe 2015 exhibition/conference. The new Syrina® 2.25 is one of the most compact auto-injectors available today, utilising a standard 2.25ml pre-filled syringe, and based on Bespak's proprietary Vapoursoft® technology.

Its benefits include:

  • Self-administration, which reduces the treatment cost to the health system as the patient does not need to attend a clinic and
  • Simple adaptability of dose size/power source dependent on drug and viscosity, providing lower configurability/adaptability risk and a simple delivery mechanism for pharma clients

The target drug market includes biologics, where the viscosity and volume of some drugs means that there is significant benefit from powered injection. The platform incorporates our proprietary Vapoursoft® technology to "power" the injection for large dosage volumes and a very wide range of viscosities.

Aesica Business Review


EBITDA margin %11.2%8.9%
EBIT margin %7.4%5.3%
  1. Organic – H2 FY2016 less H2 FY2015 at constant currency.
  2. Acquisition – H1 FY2016 at constant currency.
  3. Currency retranslation effects from historically reported to constant (FY2016 Average).

FY2016 saw Aesica's first full year within Consort. In order to provide a means of monitoring Aesica's development on a like-for-like basis, a bridge of FY2016 to FY2015 is provided in the table above, showing organic and acquisition growth and currency exchange rate effects. Aesica was acquired by Consort in November 2014, hence FY2015 only consolidated six months of Aesica's financial performance.

Aesica revenue grew 102.1% to £159.7m, which included organic growth of £1.4m (1.8%) and acquisition growth of £80.1m (101.4%) at constant exchange rates. Aesica has grown its business in anaesthetics during the year, with both customer and product diversity, mainly from its Queenborough facility.

Aesica has made solid progress in the year in improving its operating performance into increased EBIT and EBIT margin. EBIT in FY2016 grew by 185.0% to £11.8m, with EBIT margin growing 210bps to 7.4%, reflecting strong organic growth from volume and improved operating performance of £2.7m (64.9%) and acquisition growth of £5.0m (121.5%), at constant exchange rates. This follows sustained and growing improvements in operational performance across the network from upgrades to teams and processes, as well as a continued focus on the elimination and management of low margin products. In addition, restructuring actions (see below) have begun to deliver operational savings in the current year, with further benefits to be received in the forthcoming year. This has propelled the EBIT margin to 7.4% in FY2016, an increase of 210bps over the prior year (FY2015: 5.3%).

Post-acquisition integration restructuring actions signposted 12 months ago have been completed at a cost of £6.5m – within the previously communicated budget of £7.7m:

  • The Newcastle corporate office has been closed, with the remaining shared service functions moved to smaller local facilities
  • The restructuring in Germany has completed, with consolidation of warehousing and a move to cell based manufacturing
  • The Nottingham site has closed and the Finished Dose Development activities have been relocated to existing refurbished facilities at the Queenborough site

Aesica has maintained a solid regulatory track record during the year with successful FDA and MHRA audits at some of its sites, as well as ongoing customer audits. A large pharmaceutical company and major customer awarded Aesica an External Supplier Award, reflecting Aesica's strong focus on reliability, service and quality.

Business Development and Innovation

Following the closure and relocation of the Finished Dose Development Centre from Nottingham to Queenborough, it has received its first new contract at the newly recommissioned facilities and has generated a high level of interest and site visits from both large pharmaceutical and small "virtual" pharmaceutical customers. Its initial business focus will be on Potents and other high demand areas.

In FY2015, Aesica concluded a product development programme for a product manufactured using the first semi-continuous processing line and technology installed at a CDMO. The product is now approved and launched in the first major market, with others expected to follow over the next 24 months.

Aesica has been working with a leading Japanese pharmaceutical company to provide the active ingredient for an anti-inflammatory formulation containing S+flurbiprofen. The patch has received market approval from the Ministry of Health, Labour and Welfare in Japan for the indication of osteoarthritis. Aesica is in the process of supplying API materials for launch stock under a new long term supply agreement, with demand for the new formulation expected to grow steadily from 2016.

Aesica provides an integrated supply chain management service to some of its customers and has announced the extension of this service. In addition to providing its finished dose, packaging and release operations to the customer, the service model provides management of product supply chains of upstream and downstream processes at third party suppliers on the customer's behalf. This additional service enables the customer to reduce the overall number of CDMO partners it deals with. Aesica has been routinely offering this service to two of its customers and market feedback clearly points to other opportunities with existing and new customers.

During the year, the business has identified a number of attractive business development opportunities from investment in additional capabilities, or upgrade and expansion of existing ones. These incremental capex programmes will take place over the next 24 months.


Aesica is primarily focused on two pools of business development: development services and manufacturing services, with some overlap between the two.

  • Development services applies know-how in API/formulation development to a wide range of project opportunities for a wide range of customers at different stages of the clinical trial cycle
  • Manufacturing services revenue mainly comes from the application of its process technology and know-how to specific API and drug product manufacturing opportunities, many of which may be different from those API/formulation development opportunities

The Aesica commercial team is focused on a growing pipeline of API/formulation development and manufacturing opportunities. There is significant contractual and commercial confidentiality as to the identity of specific projects and contracts.

Jonathan Glenn
Chief Executive

PICTURED: The Syrina® Range.