Vindon Healthcare

Providing controlled environment products and services to defensive sectors such as pharmaceuticals and food, Vindon Healthcare has defied the downturn by delivering record sales and profits for calendar 2008.

On turnover up 10.5% to £5.51m, pre-tax profits put on 12.1% to £1.5m, allowing the cash-generative company to propose a 50% dividend hike to 0.15p.

Small in terms of market cap, yet boasting clout with giants including Pfizer and GlaxoSmithKline, Vindon is a niche maker of controlled environment testing chambers and blood banks. Its services include drug stability storage trials, servicing of controlled environment chambers and, more recently, cryogenic and heritage storage.

2008’s main achievement was the move to a purpose-built, larger-capacity facility in Rochdale, which not only consolidated its position in outsourced stability storage trials but also diversified the business by allowing it to bid for work in new areas such as heritage and cryogenic storage.

Further highlights included growth in the emerging US market – sales grew to £289,000 last year (2007: £46,000) – as well as the passing of the break-even point by the Irish operations.

Given wider uncertainties, chairman Liam Ferguson was keen to highlight high levels of income visibility in the business, with an improved £4.05m of contracted sales in the bag at the year-end (2007: £3.75m). Moreover, he insists that large pharmaceutical companies are ‘increasingly looking to outsource their [drug] storage with us’.

Pared back by cautious analysts, 2009 forecasts still suggest good growth in pre-tax profits to £1.73m on £5.95m sales, indicating that Vindon is a resilient growth stock for your portfolio.

Save 50% off your first year’s subscription to Growth Company Investor magazine, and gain immediate access to all the recommendations online. Click here.