Neogen has reported a 38 per cent year-on-year jump in Q3 2010 net income to almost US$4m on the back of booming sales of its food safety kits as it continues to buck the recessionary trend.
The US-based company forecast the need to dramatically increase global food production over the coming decades would also fuel its long-term growth.
Neogen said that much of its Q3 growth had been as a result of the boost in sales of its mycotoxin diagnostic kits and dehydrated culture media. Neogen also posted year-to-date nine month revenues of $101.5m – a 15 per cent increase compared to 2009. This continues strong performance shown by the company which announced an 18 per cent increase in its Q2 income to $4.6m
“We are very pleased to report our exceptional third quarter results, especially considering that many of our customers have been under severe economic stress,” said James Herbert, company chief executive officer and chairman. “The broad-based nature of our organic growth, and operating results, indicate significant progress in continuing our plan to ensure long-term growth.”
He added that the company’s international operations had been “significant contributors” to the buoyant results. The European division posted a year-on-year 47 per cent increase in revenues, while its Latino segment saw revenue climb 39 per cent.
The company chief also hailed the significance of the recent BioKits acquisition for its European operations – a Wales-based business focusing on diagnostic kits for the detection of foodborne allergens and tests to determine meat speciation. Herbert revealed that BioKits operations had been switched to Neogen’s US headquarters in Michigan and Scotland.
“The acquisition now clearly puts us in a position I think of being the dominant supplier in many European countries and the acquisition also brought along 50 new diagnostic tests to add to Neogen’s offering”, he added.
The need to increase global food production by 30 per cent by 2025 will mean that larger production and processing facilities are needed – which will also trigger more demand for Neogen’s products, said the CEO.
“This means that a larger concentration of animals in small areas, bigger and higher speed processing plants, and a faster distribution system to get food from the farm to the dinner plate,” he added. “All of these increase the likelihood of food safety problems and add to the growing problem of widespread outbreaks of foodborne illnesses.
Demand for quick and easy-to-use diagnostic tests will be heightened, as will the “pressure to discover and use intervention methods to prevent the problems”, said Herbert. “Of course Neogen’s mission is specifically aimed at providing solutions to both of these problems.”