| Half Year to 30th September | ||||
|---|---|---|---|---|
| 2011 £ million |
2010 £ million |
% change |
% at constant rates |
|
| Revenue | 146 | 127 | +15 | +19 |
| Sales (excl. precious metals) | 142 | 122 | +16 | +19 |
| Underlying operating profit | 32.5 | 28.8 | +13 | +16 |
| Return on sales | 23.0% | 23.6% | ||
The performance of our Fine Chemicals Division was good with sales 16% higher at £142 million and underlying operating profit up 13% to £32.5 million. Fine Chemicals’ return on sales fell slightly as a result of the impact of a restructuring programme at Macfarlan Smith.
The division’s Active Pharmaceutical Ingredient (API) Manufacturing businesses, which comprise Macfarlan Smith and Pharmaceutical Materials and Services, grew their sales by 17% to £102 million partly as a result of legacy business associated with the Conshohocken, USA plant acquired in November last year, which benefited this period’s sales by £7.6 million. Operating profit growth was slightly lower than growth in sales due to the impact of the restructuring at Macfarlan Smith.
The businesses made good progress, particularly in the US, with higher sales of methylphenidate as a result of a short term boost in market share and the launch of a new product. The Conshohocken plant gives the businesses access to much greater flexibility and capacity, and plans are being implemented to use this facility to manufacture intermediates and final products at lower cost and higher efficiency. The plant will enable the API Manufacturing businesses both to rationalise global production and secure new business which could not have been targeted previously. The full benefits of the facility will take some time to bear fruit as regulatory approval is required before any change to the existing manufacturing process is made.
Our Research Chemicals business increased its sales by 14% to £40 million with good demand for its products across all regions. Operating profit increased broadly in line with sales. In the first half of the year the business launched a new biochemical product catalogue which added over 3,000 products to its portfolio. The new range, which includes materials for biological research, is available throughout North America and will be launched globally over the next 18 months.