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Pilkington: earnings exceed market expectations

Even though UK glassmaker Pilkington reported a 31 per cent improvement in earnings for the half-year to 30 September, investors continued to call for a share buy-back following a slump in the stock. …

Even though UK glassmaker Pilkington reported a 31 per cent improvement in earnings for the half-year to 30 September, investors continued to call for a share buy-back following a slump in the stock. On 26 October, Pilkington, supplier of glass for the new Bundestag building in Berlin, announced pre-tax profits before exceptional items of UK 102 million. Turnover remained unchanged at UK 1.36 billion. The company also said it expected further growth in the second half of the year. The interim dividend was held at 1.75p per share. The group had been forecast to chalk up profits of around UK 96 million compared with UK 78 million previously. Sales in its building products division rose 6 per cent to UK 686 million and in its vehicles division by 5 per cent to UK 668 million. “Europe is our biggest trading area,” noted finance director Andrew Robb. “We started with a major reconstruction programme three years ago and have delivered all our improvements,” he said. However, the Pilkington stock price has fallen since the summer, suffering in September when US rival PPG Industries issued a profits warning, despite the fact that analysts suggested the problems were mainly in PPG“s non-glass operations. Pilkington could repurchase up to 10 per cent of shares, though chairman Nigel Rudd has said the company does not intend to use the authority at the present time. Investment house UK Active Value, which owns just over 5 per cent of Pilkington, said it would put pressure on the firm and the other shareholders for a share buy-back to boost investor returns.

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