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Pilkington says performance in line with forecasts

UK building and construction products company Pilkington Plc said in September that it performed well in the first five months of its financial year starting April 1 2001, in line with its expectation…

UK building and construction products company Pilkington Plc said in September that it performed well in the first five months of its financial year starting April 1 2001, in line with its expectations. It expects this to lead to a “good” underlying improvement in first half results. The company said it is too early to predict what impact, if any, the recent terrorist attacks in the US will have on the company, but subject to this uncertainty, expects to see progress being made in the whole year. In the last fiscal year, Pilkington reported pretax profit of GBP 172 million and sales of GBP 2.5 billion. Building products are continuing to perform strongly, the company said. Float glass prices have remained firm and are ahead of the first half last year. A continuing focus on efficiency has led to first five month results for building products being “well ahead” of the previous year, the company added. Pilkington“s European building products business, which accounts for two thirds of sales of the building products division, has continued to perform well, with overall sales and profits increasing significantly compared with a year ago, it said. In North America, demand has been weak and prices have been under pressure, however, sales and profits are ahead of last year, Pilkington said. Benefits from the company“s “Step Change” productivity programme are helping North American results, together with the absence of repairs to float tanks, in which flat glass is produced. South American sales volumes are under pressure and its sees currency devaluation affecting reported results. Sales and profits have held up well and prices are firm, it added. Sales and profits from Australasia are expected to be lower than last year, as one of two float tanks in this region is undergoing repairs. Pilkington said automotive glass sales are slightly down at present, due to a reduction in world automotive production. Sales to the replacement market have been strong and have boosted profits for the whole division, which are running ahead of last year. European automotive glass sales are marginally down but profits are ahead of last year as a result of plant closures and cost savings initiatives. Replacement glass demand has been steady in Europe and profits are stable. North American automotive glass sales to original equipment manufacturers are down by about 6% when compared to last year, in line with vehicle production in this region. However, replacement glass profits in North America are well ahead of last year, Pilkington said. VVP, the company“s unit in Mexico, has seen lower demand and is currently undergoing some rationalization. Pilkington reiterated its GBP 35 million estimate for rationalization charges for the year to achieve further efficiencies. The company“s joint venture float glass plant in France is on schedule for full-scale production in November according to the company when output is expected to help bridge an expected capacity gap in early 2002.

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