Boosted by the partial divestment of its Spartech US associate and the sale of a yarns business that together generated cash of GBP 101m, British Vita (Middleton, GB-Manchester M24 2DB; www.britishvita.com) is looking for higher value-added acquisition opportunities to complement its continuing programme of leveraging the efficiency and scale of existing operations. The group has quickly absorbed this summer´s purchase of the Swedish VTC Elastoteknik compounding operation, and it is the compounding and sheet activities that make up its Industrial Polymers business, rather than the Cellular Polymers business, that is likely to be the target for acquisitions.

Pre-tax profits for the group in the first half of 2002 were GBP 39.5m, 5% ahead of the same period last year, but 26% better than in the second half of 2001, despite sales being down 6%, at GBP 460m. Operating profit for the period was 19% higher than in 2001, at GBP 31.7m, with the margin improving to 7.4%, from 6.4% in the first half of 2001.

Demand for foam products was subdued across Western Europe, said chairman Jim Mercer, but “investments in Eastern Europe delivered excellent results” and “US operations recovered strongly from a difficult 2001”. Operating profit for Cellular Polymers was GBP 16.2m on a turnover of GBP 232.2m, with the margin recovering to 7.0%. Despite operating in a flat market, Industrial Polymers achieved a record operating profitability of GBP 13.2m from sales of GBP 176.4m. The margin was 7.5%.

Mercer says market conditions are stable and he does not expect improvement in the underlying demand for British Vita products in the short term. Margins should be protected in the second half of the year despite rising raw material costs.