Futura Medical's management had their assets handed back to them by Reckitt Benckiser after the consumer products giant saw little use for erection-enhancing condoms and terminated the agreement to distribute Futura's CSD500 product, along with anti-impotence gel MED2002. The problem for Futura was that the deal to distribute CSD500 was originally made with durex manufacturer SSL, which was subsequently taken over by Reckitt and left its products facing the corporate equivalent of being left at the back of the store room.
Futura is now weighing up its options, but chief executive James Barder ruled out the company going it alone with CSD500: "There won't be a Futura-branded condom on the market. We've had offers from other companies with strong brand names and we are weighing up what to do now." Any new agreement for the product will see Futura retaining control of manufacturing while the distribution is handled by the partner, which should guarantee supply, as well as making the product easier to extricate if the agreement ends. Mr Barder added that, at the current burn rate, the company has enough cash to last through 2013.
Nomura is reviewing its forecasts post results.
FUTURA MEDICAL (FUM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 50.5p | MARKET VALUE: | £37.2m | |
| TOUCH: | 49-52p | 12-MONTH HIGH: | 110p | LOW: 39p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 2p | NET CASH: | £1.86m | |
| Half-year to 30 Jun | Turnover £000s | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 121 | -0.70 | -0.87 | nil |
| 2012 | 75 | -1.08 | -1.30 | nil |
| % change | -38 | - | - | - |
