UK-based tempered safety glass manufacturer Darby Group has announced that opening-half profits for the year have more than doubled from UK 407,000 to UK 880,000 pre-tax. The improvement comes on the …
UK-based tempered safety glass manufacturer Darby Group has announced that opening-half profits for the year have more than doubled from UK 407,000 to UK 880,000 pre-tax. The improvement comes on the back of a 4% rise in sales to UK 9.56 million but the company has switched to a calendar year-end and the figures include the traditionally poor trading months of January and February. Michael Darby, chairman, said the underlying sales performance in the three months to the end of June was 15.7% up on the corresponding period on a like-for-like basis. The company expects over-capacity in float glass manufacturing to continue to strengthen its negotiating position with suppliers. The interim dividend is being lifted 11% to 1p. It has also been announced that international glass manufacturers are considering a bid for the Darby Group. The UK company is seen as a key target for the big glass suppliers, which are suffering from global over-capacity. UK-based Pilkington, French group Saint-Gobain and America“s PPG are among the industry giants looking hard at Darby, whose strategic importance as a large consumer of raw glass belies its small market value of UK 22 million. A defensive bid for Darby is likely to come soon as the industry braces itself for consolidation with prices for float glass set to fall further. Darby buys raw glass to use in high-value products – it is a world leader in curved safety glass – and has transformed its business this year through increased exports. Full year profits will be UK 2.3 million and analysts are revising 1997 forecasts upwards to more than UK 3 million. Its main suppliers are PPG and Pilkington, who have issued profit-warnings as a result of falling prices in Europe. These two would lose valuable sales should Darby be taken over by one of the other international players, such as Luxembourg-based Luxguard and Japanese Asahi Glass“s Belgian subsidiary Glaverbel, which are desperate to protect their market positions. Pilkington and Saint-Gobain have already shored up their downstream operations with the acquisitions of UK-companies Heywood Williams and Solaglas respectively. However, the future of Darby is vital to Pilkington, which on the most optimistic forecasts will produce flat profits of UK 215 million this year.