Randox: One-man operation has become a Covid testing giant | Health industry
As the Covid-19 pandemic swept across the UK, a senior executive at healthcare firm Randox addressed an audience of horse racing royalty, gathered amid the neoclassical splendor of St George’s Hall from Liverpool.
Randox, who had landed a role in the “sport of kings” through his sponsorship of the Grand National, had developed a test for Covid-19, he explained to them.
According to an observer, the coronavirus seemed an unusual theme for âweights lunch,â an annual event to celebrate the announcement of weight disabilities for running.
It was February 2020 and, with the pandemic yet to unleash in the UK, the coronavirus was not yet a pressing concern for many guests.
A year from now, Britain’s response to the pandemic – and Randox’s role in it – would be a matter of public scrutiny, not least given the fact that the company was named in a lobbying scandal involving Conservative MP Owen Paterson.
Randox was founded in 1982 by biochemist Peter FitzGerald, who ran a one-man operation in a converted chicken coop near Randox Road, near Crumlin in Antrim, where he grew up.
FitzGerald began using equipment discarded by university research labs, but, through decades of hard work and innovation, gradually made the company a market leader.
Today, FitzGerald is a multimillionaire with a penchant for polo, while Randox is one of the best-known diagnostic companies in Europe, if not the world. It is also one of the biggest beneficiaries of public contracts in the fight against Covid-19.
Since the start of the pandemic, its testing division, Randox Laboratories, has won nearly Â£ 500million in government contracts and processed more than 10million Covid-19 PCR tests.
The full effect of these contracts on its financial situation will not be known until the company publishes its next financial statements, expected next year.
Figures covering the 18 months ending June 2020 show a pre-tax loss of Â£ 11.7million, largely due to Â£ 33million of one-off accounting items related to its rapid shift in focus to Covid-19.
But earnings for the period, including the first four months of the pandemic, offer an indication of the company’s most recent fortunes. Sales nearly doubled from Â£ 94million to Â£ 181million, although this was in part due to its six-month fiscal year extension.
The company also paid a dividend of Â£ 15.9million, the first in Randox history, according to documents from Companies House. The payment, to parent company Randox Holdings, came in an important year for another reason.
In March 2020, shortly before Randox Laboratories won its first Covid-19 contract, worth Â£ 133million, the company restructured.
It did so through the creation of a new ultimate control entity, Randox (IOM) Ltd, on the Isle of Man.
It is not clear from the accounts whether the company paid its Â£ 15.9million dividend before or after the restructuring, but Randox said it had received “no tax benefit”.
A spokesperson said the new Isle of Man ownership agreements were made “to support any future transfer of company ownership to future generations.”
While Randox denies a tax benefit, tax is among the topics that first put the company in contact with Owen Paterson, according to government disclosures.
In July 2014, after stepping down as Secretary of State for Environment, Food and Rural Affairs, Paterson sought advice from Acoba, the body that reviews former ministers in paid employment.
Acoba’s advice to Paterson underscored that his contact with the company began when he was Shadow Secretary of State for Northern Ireland between 2007 and 2010, a dialogue that continued when he held the same mandate in government.
The relationship was established “as part of the debate on the devolution of corporate tax liability,” Acoba said.
It was not until August 2015 that Paterson accepted a paid position with the company, with a salary of Â£ 100,000, the equivalent of Â£ 500 an hour for his part-time consultancy work.
With Paterson on board – and FitzGerald’s expertise and enthusiasm driving the business forward – Randox was getting better and better even before the pandemic – but not without a degree of controversy.
In March 2016, seven months after Paterson joined, Randox agreed to sponsor the Grand National, which was held in Aintree. The racetrack was chaired at the time by Paterson’s wife, Rose. There is no suggestion that the relationship affected the sponsorship decision.
It was in 2016 and 2017 that Paterson lobbied Ministers Priti Patel and Rory Stewart on behalf of Randox, among the actions that ultimately led to his resignation last week.
The following year, the criminal convictions of 41 people who had pleaded guilty to drug driving were overturned – and another 50 investigations were dropped – after an investigation into an alleged data tampering at a Randox forensic laboratory.
The chief of the forensic science of the National Council of Chiefs of Police, Police Chief James Vaughan, described the scandal as the “greatest breach of the integrity of forensic science” in living memory.
Its Covid-19 contracts have not been entirely free of setbacks, either. In July 2020, the government asked nursing homes and members of the public to immediately stop using the company’s test kits, after discovering problems with substandard swabs. At the time, the company said it had temporarily suspended distribution of home specimen collection kits using a particular swab lot / supplier and that the issue was not affecting its private business which was using a other swab supplier.