Pilkington Rise Masks Tough Conditions

The group, which makes glass used by builders and car manufacturers worldwide, said it expected “testing” conditions to persist for the remainder of its current financial year.The prediction came as results for the six months to September 30 showed an 11% hike in underlying profits to £84 million, even though turnover was flat at £1.4 billion.But after taking one-off hits from pulling out of car glass replacement operations in New Zealand and laminating activities in Brazil, bottom line profits were down slightly on the same period last year – from £72 million to £71 million.Merseyside-based Pilkington said the rise in underlying profits, which was in line with expectations, was underpinned by efficiency gains achieved following a long-term restructuring drive which has seen it exit a string of underperforming businesses.But it added that the figures also reflected a favourable comparison with the same period last year when a series of plant closures for routine repairs dented its performance.Chairman Sir Nigel Rudd said: “The benefits of Pilkington’s extensive restructuring of the last six years are evident in our improved operational efficiency and robustness.“With Pilkington currently in the second stage of its strategy, and demonstrating our capability to generate cash, we are in a good position to withstand the testing trading conditions which we expect to continue over the rest of the financial year.”Pilkington’s building products arm maintained operating profits at £67 million in the first half thanks largely to efficiency gains.It said demand for building products continued to be weak, with the exception of the UK and Australian markets.In the UK, the division’s performance held up well, boosted by strong sales of its environmentally friendly K Glass which has benefited from legislation requiring builders to install energy-saving windows.Sales in its automotive operation, excluding those from joint ventures and associates, were up 3% at £614 million despite weak markets being boosted by the popularity of new models which use Pilkington’s glass.In Europe, where Pilkington does just over half of its automotive business, the company saw lower volumes for light vehicles but higher shipments of specialised products such as for coaches and trucks.Glassmaker Pilkington offered investors little hope of an immediate upturn in its markets today – despite delivering a jump in first half profits.

The group, which makes glass used by builders and car manufacturers worldwide, said it expected “testing” conditions to persist for the remainder of its current financial year.

The prediction came as results for the six months to September 30 showed an 11% hike in underlying profits to £84 million, even though turnover was flat at £1.4 billion.

But after taking one-off hits from pulling out of car glass replacement operations in New Zealand and laminating activities in Brazil, bottom line profits were down slightly on the same period last year – from £72 million to £71 million.

Merseyside-based Pilkington said the rise in underlying profits, which was in line with expectations, was underpinned by efficiency gains achieved following a long-term restructuring drive which has seen it exit a string of underperforming businesses.

But it added that the figures also reflected a favourable comparison with the same period last year when a series of plant closures for routine repairs dented its performance.

Chairman Sir Nigel Rudd said: “The benefits of Pilkington’s extensive restructuring of the last six years are evident in our improved operational efficiency and robustness.

“With Pilkington currently in the second stage of its strategy, and demonstrating our capability to generate cash, we are in a good position to withstand the testing trading conditions which we expect to continue over the rest of the financial year.”

Pilkington’s building products arm maintained operating profits at £67 million in the first half thanks largely to efficiency gains.

It said demand for building products continued to be weak, with the exception of the UK and Australian markets.

In the UK, the division’s performance held up well, boosted by strong sales of its environmentally friendly K Glass which has benefited from legislation requiring builders to install energy-saving windows.

Sales in its automotive operation, excluding those from joint ventures and associates, were up 3% at £614 million despite weak markets being boosted by the popularity of new models which use Pilkington’s glass.

In Europe, where Pilkington does just over half of its automotive business, the company saw lower volumes for light vehicles but higher shipments of specialised products such as for coaches and trucks.