details of its research and development activities, refusing to disclose any
information on the products in the R&D pipeline, or even the extent of its
R&D expenditure. Nor would it provide breakdowns of divisional sales by
region or by product, as was usual with other drugs companies.^6 Wherever
and whenever possible, Fisons preferred to maintain a ‘golden silence’.
Despite this tendency towards secrecy, the majority of analysts slept
soundly in their beds at night, confident that Fisons’ remarkable financial
performance could be relied upon for the foreseeable future.
In September 1990, the UK economy – like most of the industrialized
world – was sinking into recession, but as Fisons announced its half-year
profits, the company showed no signs of succumbing to economic pres-
sures. A 35 per cent rise in pre-tax profits for the half year reinforced its rep-
utation as a safe and predictable performer, ‘a safe haven for investors in
troubled economic times’.^7 The company’s achievements were summed up
by The Timesin the following way:
Any company that has net borrowings of £150 million but can still include an
interest receivable item of £1m in its interim accounts deserves to be taken
seriously. That company is Fisons, the pharmaceutical and scientific equip-
ment group, which continues to amaze its followers by never putting a foot
wrong ... With Fisons’ five-year record of rising sales and profits pretty
much second to none, the inevitable question is how long can it all
continue.^8According to theFinancial Times, Fisons itself was in no doubt, claiming
that its ‘current 20% earnings growth can be repeated annually for the rest
of the millennium’.^9 The results led analysts to raise their estimates of pre-
tax profits for the full year to £230 million, up £61 million on 1989. Sure
enough, when the full year figures for 1990 were announced in March the
following year, Fisons did not disappoint, turning in pre-tax profits of
£230.2 million. These were halcyon days for Fisons. The normally public-
ity-shy Kerridge was feted by the media amidst speculation that a knight-
hood must be just around the corner. There were, however, occasional
dissenters.
Lingering doubts
Globally, the pharmaceutical industry was undergoing a rapid process of
restructuring and consolidation. In terms of size, Fisons was a small player
in a land of giants, ranking around fiftieth worldwide. Because of its size,
some commentators questioned the company’s ability to finance the devel-
opment of new products in the longer term, and to muster the marketing
resources required to bring them to market. To achieve greater critical
272 Relationship Marketing