Randox: how one-man-band operation became a Covid testing giant

Healthcare firm named in Owen Paterson lobbying scandal has won £500m in UK government contracts

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Last modified on Tue 9 Nov 2021 06.47 EST

As the Covid-19 pandemic swept towards the UK, a senior employee of the healthcare firm Randox addressed an audience of horse racing royalty, gathered amid the neoclassical splendour of St George’s Hall in Liverpool.

Randox, which had garnered a role within the “sport of kings” via its sponsorship of the Grand National, had developed a test for Covid-19, he told them.

According to one observer, coronavirus seemed an unusual theme for the “weights lunch”, an annual event to celebrate the announcement of weight handicaps for the race.

It was February 2020, and, with the pandemic yet to let rip in the UK, coronavirus was not yet a pressing concern for many of the guests.

Within a year, Britain’s pandemic response – and Randox’s role in it – would be a matter of public scrutiny, not least due to the company being named in a lobbying scandal involving the Conservative MP Owen Paterson.

Randox was founded in 1982 by the biochemist Peter FitzGerald, who ran a one-man-band operation from a converted chicken house off Randox Road, near Crumlin in Antrim, where he had grown up.

FitzGerald started out using equipment discarded by university research labs but, through decades of hard work and innovation, slowly built the company into a market leader.

Today, FitzGerald is a multimillionaire with a penchant for polo, while Randox is one of the best-known diagnostics companies in Europe, if not the world. It is also one of the biggest beneficiaries from UK government contracts in the fight against Covid-19.

Since the start of the pandemic, its testing division, Randox Laboratories, has won nearly £500m-worth of government contracts and processed more than 10m Covid-19 PCR tests.

The full effect of those contracts on its financial position will not be known until the company publishes its next set of accounts, due next year.

Figures covering the 18 months ending in June 2020 show a pretax loss of £11.7m, due largely to £33m in one-off accounting items related to its rapid shift in focus to Covid-19.

Revenues for the period, including the first four months of the pandemic, offer some indication as to the company’s more recent fortunes. Sales nearly doubled from £94m to £181m, although this was due partly to the extension of its financial year by six months.

The company also paid a £15.9m dividend, the first in Randox’s history, according to Companies House filings. The payout, to parent company Randox Holdings, came in a year that was significant for another reason.

In March 2020, shortly before Randox Laboratories won its first Covid-19 contract, worth £133m, the company restructured itself.

It did so via the creation of a new ultimate controlling entity, Randox (IOM) Ltd, in the Isle of Man.

The accounts do not make clear whether the company paid its £15.9m dividend before or after the restructure but Randox said it had received “no tax advantage”.

A spokesperson said the new Isle of Man ownership arrangements were made “to support any future transfer of company ownership to future generations”.

While Randox denies a tax benefit, tax is among the subjects that first brought the company into 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 scrutinises former ministers who take paid jobs.

The advice Acoba gave to Paterson highlighted 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 brief in government.

The relationship was established “in the context of the debate about the devolution of responsibility for corporation tax”, Acoba said.

It was not until August 2015 that Paterson took up a paid role with the firm, on a £100,000 salary, the equivalent of £500 an hour for his part-time consulting work.

With Paterson onboard – and FitzGerald’s expertise and enthusiasm driving the company on – Randox was going from strength to strength 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, held at Aintree. The racecourse was chaired, at the time, by Paterson’s wife, Rose. There is no suggestion the relationship affected the sponsorship decision.

It was in 2016 and 2017 that Paterson lobbied the 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 quashed – and a further 50 investigations were dropped – after an investigation into alleged data tampering at a Randox forensics lab.

The National Police Chiefs’ Council forensics lead, chief constable James Vaughan, described the scandal as the “biggest breach of integrity in forensic science” in living memory.

Nor have its Covid-19 contracts been entirely free of setbacks. In July 2020, the government instructed care homes and members of the public to immediately stop using the company’s testing kits, after discovering problems with sub-standard swabs. At the time, the company said it had temporarily suspended distribution of home sample collection kits using one particular batch/supplier of swabs and that the issue did not affect its private business, which used a different supplier of swabs.

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