Smith and Nephew in good health.
Top of the MT250 is health products company Smith and Nephew. Pre-tax profits for 1989 were £140.5 million, up from £122.8 million the year before. Much of the leap came from surgical and examination gloves, as the AIDS scare hit its frenzied peak. Profits from the gloves in the United States alone jumped from $4 million to $20 million over two years.
The deflation, however, has come equally suddenly: 1990 results, announced just after Management Today's April cut-off date for the current table, showed profits down 6%. "The market has normalised," says chief executive John Robinson, "and prices have halved again from their peak."
But the underlying strength of Smith and Nephew is still there. In the past five years it has consistently been in MT's top 20. Apart from toiletries (such as Nivea lotion and Lillets tampons), the company's main products are orthopaedic implants and "wound management" items.
International expansion has been another priority. A decade ago 54% of turnover came from the UK - now the UK figure is closer to 15%, with Europe and North America as the biggest overseas markets.
Head office is a tightly run ship of some 40 people including support staff. It is among the most beautiful Victorian buildings in London, described by Robinson as "one of our best ever acquisitions", purchased for a mere £200,000 in the early 1960s.
Timing right at last for Hays.
Ronnie Frost's Hays group makes its first appearance in the MT250 with a score of 30.6%, putting it in 15th place. Hays, which offers personnel selection, transport and distribution services, had the misfortune to come to the stock market just after the mini-crash of October 1989. Though some 92% of the shares were initially left with the underwriters, Hays' share price soon recovered.
This success is a triumph for Frost and over 100 of his executives who took over the group in a £255 million management buyout from its former owner, the Kuwait Investment Office, in 1987. Again, their timing was unfortunate. The buyout was completed within a few weeks of the major October 1987 market crash. The KIO still retains a 14.5% stake in the business, and Frost recently dismissed suggestions that it would sell the stake to help pay for reconstruction in Kuwait after the Gulf war.
Despite the severe recession, Hays was able to report half-year profits marginally up from £27.3 million to £27.5 million for the six months to the end of December. Two out of the three divisions performed well, with the only weakness coming from its personnel activities.
Frost is looking to boost his distribution business with the more cost-conscious National Health Service. Last year he signed a three-year contract with the NHS's North East region to set up a Supplies Services agency to distribute equipment to over 120 hospitals.