UK glassmaker Pilkington Plc has recently reported pre-tax profits of UK 55 million for the financial year to 31 March after a UK 155 million exceptional charge for restructuring. Last year, it incurr…
UK glassmaker Pilkington Plc has recently reported pre-tax profits of UK 55 million for the financial year to 31 March after a UK 155 million exceptional charge for restructuring. Last year, it incurred a UK 24 million loss, including exceptionals. The restructuring, as reported in Glass-Technology International No. 4-96, has already cost 600 jobs, mainly in Germany, and will involve another 1,300. This should benefit the company by about UK 70 million a year when complete in three years“ time. However, Pilkington expects its results to continue to be depressed by falls in the price of raw float glass in Europe, announcing that falls of up to 20% in the price of raw float glass in Europe had resulted in an 8% reduction in the price of the company“s products in the European construction market. The UK 155 million charge comprises UK 82 million in asset writedowns and UK 73 million for redundancy and restructuring costs. Turnover rose 10%, to UK 2.89 billion, largely due to the acquisition of the outstanding 50% in Italian automotive glassmaker SIV and currency translation effects. Operating profit increased 26%, to UK 214 million and, as a result, the dividend rose to 5p, from 4.2p. In order to overcome the weak European markets, Pilkington is counting on a price rise of between 8% and 10%. Competitors are also raising their prices, suggesting that the increases may be permanent. However, other parts of the Pilkington group are looking impressive. The second-half performance from the American Libbey-Owens-Ford business was impressive and came despite a strike at General Motors that cost UK 6 million. Pilkington Aerospace, which makes specialist technical glass products, saw profits up 10%. The UK company is also taking advantage of the fact that demand from the US construction industry is now soaring. In the longer term, South America, where UK 14 billion of investment is planned by car makers, offers a huge opportunity. Looking at a regional breakdown of turnover and profits, European sales were UK 1.61 billion (up from UK 1.40 billion for the previous year), with profits at UK 119 million (UK 69 million). North America sales rose to UK 736 million (UK 723 million), with profits at increasing slightly to UK 58 million (UK 54 million). The rest of the world saw turnover up to UK 422 million (UK 401 million), although profits fell to UK 52 million (UK 72 million). Pilkington also announced that it has just supplied Suncool Neutral – a solar-control clear glass – for several large-scale projects. According to the company, the trend towards neutral or clear, rather than tinted or reflective glass is gathering pace.