BRITISH VITA
Record half-year profits / Improved operating margins / Strong performance expected
A record first-half result from British Vita (Middleton, GB-Manchester M24 2DB) saw profits before tax rise 13%, to GBP 41.7m, as sales increased by 15%, of which the new UK subsidiaries, Doeflex and Hyperlast, contributed GBP 55m. Overall operating margins were up 7%, to 7.9%, and a strong cash flow cut gearing from 47% to 39%.
Chief executive, Jim Mercer, said it was an excellent performance, adding: “These results reflect the successful implementation of our strategy of focussing the development of the group, both through capital investment and aquisitions, on those speciality areas of the polymer market which offer real growth opportunities through product substitution and enhanced technical performance.”
Despite its successful policy of diversification into thermoplastic compounding and sheet production, cellular polymers, principally polyurethane, remain the core of the British Vita business. Sales of foams totalled GBP 247m, yielding an operating profit of GBP 19.6m, thanks to the operating margin rising to 7.9%, from 7.5% in 1998. There was particularly strong demand in France and the US, although a slow start-up of the new facility was experienced in Lithuania, due to subdued local demand. Excellent growth is said to have been achieved for technical foam products.
There was weak demand in the compounding business because most of the plants are based in the UK. The exceptions were the PVC and thermoplastic elastomer sectors, which performed strongly. Total sales for Vita´s industrial polymers operation reached GBP 160m, generating an operating profit of GBP 12.5m. Thermoplastic sheet did well, with significant success in the graphic arts market for polypropylene products.
Continuing strong performance is expected in continental Europe and the US in the second half, although little improvement is anticipated in the UK. The company stresses it still has plenty of resources for further acquisitions, perhaps as much as GBP 100m given the strength of the balance sheet, although it expects, also, to be able to capitalise on existing potential for organic growth. On-going investment includes two further compounding lines for Doeflex, another PVC compounding line at Vitapol and additional equipment at the Axxpack operation in Belgium.
Chief executive, Jim Mercer, said it was an excellent performance, adding: “These results reflect the successful implementation of our strategy of focussing the development of the group, both through capital investment and aquisitions, on those speciality areas of the polymer market which offer real growth opportunities through product substitution and enhanced technical performance.”
Despite its successful policy of diversification into thermoplastic compounding and sheet production, cellular polymers, principally polyurethane, remain the core of the British Vita business. Sales of foams totalled GBP 247m, yielding an operating profit of GBP 19.6m, thanks to the operating margin rising to 7.9%, from 7.5% in 1998. There was particularly strong demand in France and the US, although a slow start-up of the new facility was experienced in Lithuania, due to subdued local demand. Excellent growth is said to have been achieved for technical foam products.
There was weak demand in the compounding business because most of the plants are based in the UK. The exceptions were the PVC and thermoplastic elastomer sectors, which performed strongly. Total sales for Vita´s industrial polymers operation reached GBP 160m, generating an operating profit of GBP 12.5m. Thermoplastic sheet did well, with significant success in the graphic arts market for polypropylene products.
Continuing strong performance is expected in continental Europe and the US in the second half, although little improvement is anticipated in the UK. The company stresses it still has plenty of resources for further acquisitions, perhaps as much as GBP 100m given the strength of the balance sheet, although it expects, also, to be able to capitalise on existing potential for organic growth. On-going investment includes two further compounding lines for Doeflex, another PVC compounding line at Vitapol and additional equipment at the Axxpack operation in Belgium.
15.10.1999 Plasteurope.com [17780]
Published on 15.10.1999