British glass manufacturer Pilkington said that it has sold the largest part of its technical glass business – which makes car mirrors and architectural glass – to a management consortium for UK 50 mi…
British glass manufacturer Pilkington said that it has sold the largest part of its technical glass business – which makes car mirrors and architectural glass – to a management consortium for UK 50 million. At the same time, the company said it was seeing revenue growth for the first time in three years. The business is being sold at book value, and comprises principally the group“s automotive and interior mirror operations in Europe and the US, including Flabeg GmbH in Germany, together with the last of the group“s architectural glass processing businesses in Germany. In 1997, Pilkington undertook a fundamental review of worldwide competitiveness and embarked on a programme to improve its competitiveness first in Europe and secondly in North America. The cost of the group“s restructuring this fiscal year, ending 31 March, will be UK 110 million, Pilkington said. The group will announce its results for the fiscal year on 1 June. Job reductions, which were originally targeted at 7,500, will now be over 9,000, the group said, with the costs of achieving these extra reductions to be included in the current fiscal year“s accounts. A UK 22 million charge will arise as a result of additional line closures and restructuring of the European automotive business, Pilkington said, while other manning reductions worldwide have cost UK 20 million. The cost of restructuring the US operations would be UK 68 million, it said. “Pilkington“s businesses are showing better results again this year and turnover from continuing operations is now growing for the first time in three years,” Pilkington chief executive Paolo Scaroni said. Two weeks ago, the group announced a restructuring of its North American operations to address a lack of competitiveness in that market, it said. Although the automotive mirror business performed strongly, the demand for special glass products and for glass used by the electronic industry is still relatively depressed, Pilkington said. As a consequence, profits from that unit are down compared with the previous year, it said. For Pilkington, the sale of the technical glass activities “marks a final step in the process of focusing the group“s European operations on its core competencies of building and automotive glass,” Scaroni said. Net borrowings at the end of February were similar to a year ago, Pilkington said.