Trading Update And Disposal
Filtrona plc
25 June 2007
25 June 2007
FILTRONA PLC
TRADING UPDATE ON PROGRESS IN 2007 AND DISPOSAL OF GLOBALPACK FOR $56M
Filtrona plc ('Filtrona'), the international, market leading, speciality plastic
and fibre products supplier, today issues a pre-close trading statement ahead of
its interim results for the six months ending 30 June 2007, which will be
announced on 30 August 2007.
Filtrona also announces that it has signed an agreement for the sale of
Globalpack, its Brazilian consumer packaging business.
TRADING UPDATE
In the first five months of 2007, Filtrona has delivered encouraging results
with strong underlying organic growth. The adverse impact of currency
translation, particularly the movement of the US dollar, has lowered the
Company's reported growth towards historical rates and, at the half year, the
translation impact on operating profit is expected to be circa £2m.
Plastic Technologies
The moderation of Plastic Technologies' sales growth in the second half of 2006
has continued into 2007 with the US Profile and Sheet business principally
affected. Protection and Finishing Products has traded well with new
distribution units starting up successfully in Hungary, Poland and the USA. The
Duraco acquisition, completed in May, has made a good start. The Coated and
Security Products business has delivered improved performance assisted by the
recovery in promotional tear tape volumes.
Fibre Technologies
Fibre Technologies has delivered strong profit performance with both Cigarette
Filters and Bonded Fibre Components performing very well in spite of the
expected sales volume and revenue reduction in Cigarette Filters. The previously
announced restructuring programme within the Cigarette Filters business has
progressed to plan with the completion of the Richmond, Virginia plant closure
and the successful transfer of volumes to Greensboro, North Carolina and
Monterrey, Mexico. The Monterrey facility is performing well as a result of
sustained operational improvement and performance in Asia has also been good.
Cigarette Filters' new policy of obtaining enhanced value for R&D services is
already proving beneficial. The Bonded Fibre Components business is performing
well at all locations as a result of market share gains in the writing
instruments market and the success of new projects.
Despite lower revenues in Fibre Technologies, the success of profit improvement
programmes has generated substantially improved margins in the segment and
enhanced margins for the Company as a whole.
Overall, with strong underlying organic growth now being supplemented by the
first contribution from the Duraco acquisition, the Board remains confident that
Filtrona's financial performance will continue to progress in line with the
Board's expectations.
DISPOSAL OF GLOBALPACK FOR $56m
Filtrona is pleased to announce it has signed an agreement for the sale of
Globalpack, its Brazilian consumer packaging business, to the Itavema Group for
a cash consideration payable of $56m.
Completion of the transaction is conditional upon Filtrona's receipt of the
initial consideration of $31m and the purchaser's provision of security via a
major international bank for the deferred consideration of $25m, which is
payable in five equal annual instalments. For the year ended 31 December 2006,
Globalpack's profit before tax was £2.1m and gross assets were £23.5m.
Filtrona intends to use the net proceeds from the sale to repay Group debt and
completion of the transaction is anticipated to take place on 27 June 2007.
Commenting on the disposal, Chief Executive, Mark Harper said:-
'The disposal of Globalpack confirms Filtrona's commitment to maintain a clear
focus on the growth of its core international businesses within plastic and
fibre technologies. Globalpack did not fit the Board's longer term strategic
plans. I would like to thank everyone at Globalpack for their contribution to
Filtrona and to wish them every success for the future.
Enquiries:
Filtrona plc Finsbury
Mark Harper, Chief Executive James Leviton
Steve Dryden, Finance Director Gordon Simpson
Tel: 01908 359 100 Tel: 020 7251 3801
This information is provided by RNS
The company news service from the London Stock Exchange
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