Wound Management

SSL International plc ("SSL") announces that it has exchanged conditional contracts with a newly formed company, Medlock Medical Limited ("Medlock Medical"), which is principally owned by funds advised by Apax Partners, for the disposal of the wound management business. Completion of the transaction is expected on 31st March.

Cash proceeds on completion of this disposal will be £55 million, of which £5 million will be held in escrow pending determination of pre-emption rights granted to Ladenburg BV when the Betadine antiseptics brand was purchased by SSL in the early 1990's. As previously indicated, net cash proceeds will be used to reduce group borrowings.

The net book value of the assets being sold to Medlock Medical is approximately £22 million, which includes the production facility in Oldham and a warehouse in North Manchester, both in the UK. 244 employees will transfer to Medlock Medical. After taking account of net assets transferred, goodwill written off and other provisions, the transaction will generate a pre-tax loss in the region of £8 million.

Sales of wound management products in the year to 31st March 2003 of £45 million generated a pre-exceptional operating profit of £17 million before interest and tax and before allocating shared group costs such as UK distribution costs, R&D, insurance and IT costs. After absorbing costs attributable to the business and charging exceptional items, profit before tax was £8 million.

Disposal Programme Update

The sale of wound management is the second of SSL's four planned disposals following the previously announced disposal of the Marigold Industrial gloves business, and will bring cumulative proceeds to some £75m. Discussions on the sale of the Silipos gel business are on-going and a further announcement will be made in due course.

The sale of the largest medical business, Regent Biogel surgical gloves and Hibi antiseptics, has been delayed from our original expectations. The Board has ended its preferred party's exclusivity and is engaged in active negotiation with another party. It is hoped that an agreement to sell will be reached by the end of April, although proceeds may be lower than originally expected due, in part, to the decline in the value of the US dollar over recent months.

Trading Update

Sales for the first 5 months of the second half have continued the trends reported for the first half of the year. Durex sales continue to show growth in line with our expectations while sales of Scholl footwear and footcare combined remain relatively flat overall. Sales of Biogel surgical gloves and the wound management business continue to grow in line with underlying market dynamics. Foreign exchange gains on sales denominated in Euros are partially offset by the weakening US dollar. Sales of branded consumer and medical products continue to grow both before and after adjusting for currency, although on a total Group basis this growth is offset by a decline in the sales of unbranded condoms.

The Group expects full year sales, excluding industrial gloves to be approximately £600 million compared with £591 million last year. These sales are expected to generate a gross margin of approximately 60% and a brand contribution margin of 40% (i.e. after deducting market development and variable selling expenditure), both of which are in line with last year. Operating margin, after reflecting the dilutive effect of the industrial glove disposal and before exceptional charges, is expected to be between 12 and 12.5%.

Commenting, Brian Buchan, Chief Executive, said:

"The sale of the UK wound management business takes us a step closer to repositioning SSL as a focused consumer company and we look forward to completing the remainder of the disposal programme to achieve that objective.

We are pleased that the consumer business is continuing to perform satisfactorily through this period of extensive change. We remain confident in the potential of our portfolio of leading brands."

For further information, please contact:

SSL International plc
020 7367 5760

Brian, Buchan, Chief Executive


Garry Watts , Group Finance Director


Jan Young, Head of Investor Relations


The Maitland Consultancy
020 7379 5151

William Clutterbuck


Brian Hudspith