UK Scientific & Laboratory Equipment Industry - What’s in Store for 2010?

Few would argue that 2009 was a difficult year for the UK Scientific & Laboratory Equipment industry but early signs suggest that conditions in 2010 will be much brighter. According to new research by leading industry analysts Plimsoll, the market is slowly emerging from the malaise of the last 2 years.

David Pattison, senior analyst and author of the 2010 Plimsoll Analysis explained, “The recession tore through the market in 08 and most of 09 like a tornado and accelerated the rate of change in the market. Aggressive “growth at all cost” operators have been forced to abandon their reckless strategies and many have been caught out and are in real trouble. However, some amazing companies have come through the recession largely unaffected and look set to make 2010 their year. As the market continues to recover during the year the changes will continue to come thick and fast.

” When pressed on what likely changes he envisages in the market in 2010 he offered: “More job losses and consolidations sadly. Even as the market improves there are a lot of companies, large and small, that survived by the skin of their teeth and they have to rebuild their profit margins and efficiencies.

” He continued “Our latest analysis projects that a further 1,000 jobs will have to be shed if companies are to get back to profit and remain competitive in 2010. Whether through natural wastage, or compulsory layoffs, job losses are necessary. With the average sales per employee figure down to £140,000, employees need to “buy in” and contribute more to the recovery of their companies - if you still have a job expect to work much harder in 2010. £349 million worth of profit has been wiped from the market in the last year and employers have no choice but to cut their cloth accordingly and get more from their resources.

” As for mergers and acquisitions Pattison said, “In all we named 110 companies in our latest analysis that are ripe for takeover or merger with a larger parent. It’s a buyer’s market in 2010 with many companies still recovering from the recession. Our report has picked some great examples of companies that are currently undervalued because of the recession that would be very attractive to prospective owners. For many struggling companies, a buy-out may be the quickest route to get the company back on an even keel – even if it means relinquishing their independence. Inevitably, this will further increase job losses as new owners would quickly look for efficiency gains and to synergise their new acquisition with existing operations.

” So, aside from a serious refocus of profitability and the inevitable job cutting and takeovers, does Pattison see any cheer in 2010? “There are some real good news stories out there. We rated 355 companies as “Strong” in our latest report. As expected this number is down compared to previous years but these companies will lead the market out of the downturn. They have managed to be commercially successful without jeopardising their financial stability.

” The new Plimsoll Industry Analysis – Scientific & Laboratory Equipment gives an instant performance rating on the top 691 companies in the market. Each company has been rated as Strong, Good, Mediocre, Caution or Danger according to their latest performance. A graphical and written analysis will tell you which companies are in trouble and who is getting it right.

Readers of Labmate UK & Ireland are entitled to a £50 discount of this new special edition of the
Plimsoll Industry Analysis – Scientific & Laboratory Equipment. Call 01642 626400 for further details and quote reference PR/PC40.

Better Bank Lending as well as new Growth Capital Fund Needed

The Forum of Private Business (FPB) is calling for bank lending to be made more accessible and affordable following a report identifying a ‘permanent gap’ in small business finance. In its submission to the Rowland’s Growth Capital Review, which highlighted a major shortfall in growth capital for businesses seeking between £2m - £10m, the FPB called for a range of finance options to be made available for more small firms, including those requiring significantly less capital. Following the review, which was led by venture capital expert Christopher Rowlands and included ‘Dragons’ Den’ entrepreneur James Caan, the Government announced plans to introduce a new growth capital fund to plug the gap. In addition, it revealed there will be a £1 billion innovation fund for technology startups. However, the FPB believes that the banks must also play their part by increasing the availability of lending – particularly investment of between £100,000 and £500,000, which is the level typically required by most small businesses. The FPB is also arguing that the steep cost of bank finance must be reduced without delay. On 3rd December 2009 the FPB presented its recent small business finance research at a meeting of the Small Business Finance Forum amid concerns that a lack of affordable credit will leave many businesses unable to expand and cope with an upturn in trade as the country heads out of recession. “We are entering a key period,” said the FPB’s Policy Representative Matt Goodman, who attended the meeting. “Firms are likely to require finance from a greater range of sources over the next year. Growth funding is certainly welcome but must be accompanied by more sustainable banking lending and public sector support – including a replacement for the Enterprise Finance Guarantee (EFG) - so that they are able to take full advantage of future opportunities. For further information or advice visit www.fpb.com

Streamlining Accreditation for Medical Laboratories

Medical Laboratories accredited by UKAS to ISO 15189:2007 will now be recognised as meeting the management systems principles of ISO 9001:2008. This recognition is set to reduce costly, redundant, time-consuming audits as well as enabling such labs to better meet their customer’s needs. This development was announced in a joint communiqué by ISOS (International Organisation for Standardization), ILAC (International Laboratory Accreditation Cooperation) and the IAF (International Accreditation Forum) in September 2009. The move is designed to address the misconception that medical laboratories accredited to ISO 15189:2007 do not operate a recognised management system. Until now medical laboratories accredited by UKAS have been asked by customers to become certified to ISO 9001:2008 in order to demonstrate they are in full control of their processes. Accredited medical laboratories that are part of a larger organisation certified to ISO 9001 should only need to be assessed once according to ISO 15189, with these results accepted as meeting the principles of the management systems requirements. Jon Murthy, UKAS Marketing Manager, said: “This recognition removes the need for UKAS accredited medical laboratories to seek unnecessary certification to ISO 9001 to demonstrate that they have a recognised management system in place. The market can therefore have confidence that a medical laboratory accredited by UKAS to ISO 15189 can deliver a service that is fit for purpose.

” BIA Welcomes Access to Capital

The BioIndustry Association (BIA) welcomes the announcement by the Department for Business, Innovation and Skills today that
Hermes Private Equity and the European Investment Fund have been appointed, subject to contract, as the fund-of-fund managers of the UK Innovation Investment Fund (UKIIF). Initially it is expected that the UKIIF will have
£325 million to invest, £150 million from the Government and £175 million from private investors, with investment starting at the beginning of next year. £200 million is for digital/ICT, life sciences and advanced manufacturing. The £200 million technology fund-of-funds is to be managed by the European Investment Fund. The UK Government will invest £100 million in this fund, of which at least £25 million is for life sciences. Hermes Private Equity will manage the £125 million low-carbon and clean tech fund-of- funds.

The BIA has been calling for the establishment of an Innovation Fund since the publication of the Bioscience Innovation and Growth Team Review and Refresh in January of this year, and was delighted when the UKIIF was announced in June. The appointment of the fund-of-funds managers means that it is now possible for the first, much needed, investments to be made. Clive Dix, BIA Chairman, said: “The BIA believes that the UKIIF could provide a lifeline to life sciences sector, which has been seriously hindered by the lack of capital over the last five to six years. It is pleasing that the UKIIF has been received with enthusiasm by private investors, and that money will be available from the beginning of next year. We will follow the investments of the European Investment Fund with interest.”