BRITISH POLYTHENE INDUSTRIES
Financial results will be much better than 2008 / July's improved trading pattern has continued / Restructuring on schedule
Leading PE film producer British Polythene Industries (BPI, Greenock, Scotland / UK; www.bpipoly.com) says it is well positioned to deliver a much better financial performance than in 2008, according to its latest interim management statement dated 16 November 2009. When presenting its interim results on 28 August, BPI had indicated that the results of July 2009 outdid those of 2008 – see Plasteurope.com of 15.09.2009 – and it now says that pattern continued into August, September and October. The final outcome for the year to 31 December 2009 will be “nearer the top end of current market expectations”.
While volumes will be down in a year-on-year comparison, due to restructuring measures implemented over the last 12 months, both production capacity and the cost base are better aligned to customer demands. As a result, BPI was able to reduce losses at its UK sites, particularly those producing packaging for the depressed construction and industrial markets. Overall, trading is said to remain challenging. Although the UK business is benefiting from the weakness of the sterling against the euro, this also translates into increased competition for BPI’s European operations from UK-based competitors.
Closure of the factory in Stockton / UK is proceeding on schedule. The manufacture of heavy duty sacks has already moved to another site, with production of pallet-hoods and industrial sheeting due to transfer over the next few months. Wide agricultural and horticultural film will be relocated in the first half of 2010, once a new wide film line has been installed at the site in Ardeer / Scotland. The full financial benefits of the Stockton closure are expected to be felt by the second half of 2010. In the meantime, BPI explains, it has significant duplication of both people and costs.
Net borrowings remain similar to the levels of June 2009, when they totaled GBP 55m (EUR 63m). BPI believes it is fairly well hedged against winter power costs, both in the UK and mainland Europe, and expects material prices to stabilize or erode slowly after the recent increases.
Results for the 2009 financial year will be announced in March 2010.
While volumes will be down in a year-on-year comparison, due to restructuring measures implemented over the last 12 months, both production capacity and the cost base are better aligned to customer demands. As a result, BPI was able to reduce losses at its UK sites, particularly those producing packaging for the depressed construction and industrial markets. Overall, trading is said to remain challenging. Although the UK business is benefiting from the weakness of the sterling against the euro, this also translates into increased competition for BPI’s European operations from UK-based competitors.
Closure of the factory in Stockton / UK is proceeding on schedule. The manufacture of heavy duty sacks has already moved to another site, with production of pallet-hoods and industrial sheeting due to transfer over the next few months. Wide agricultural and horticultural film will be relocated in the first half of 2010, once a new wide film line has been installed at the site in Ardeer / Scotland. The full financial benefits of the Stockton closure are expected to be felt by the second half of 2010. In the meantime, BPI explains, it has significant duplication of both people and costs.
Net borrowings remain similar to the levels of June 2009, when they totaled GBP 55m (EUR 63m). BPI believes it is fairly well hedged against winter power costs, both in the UK and mainland Europe, and expects material prices to stabilize or erode slowly after the recent increases.
Results for the 2009 financial year will be announced in March 2010.
20.11.2009 Plasteurope.com [214875]
Published on 20.11.2009