Brand Architek. Regulatory News (BAR)

29 Mar 2005 10:31

Swallowfield PLC29 March 2005 Swallowfield plc Following the award of the significant outsourcing contract that we recentlyreferred to in the Company's interim results announced on 24th February,Swallowfield is today providing a further strategic and trading update. We cannow confirm that this contract is for the filling of the total aerosolrequirements of PZ Cussons from July this year for an initial period of threeyears. The contract is worth up to 12 million units per year and, againstcurrent volumes, will account for upwards of 20% of the annual productionvolumes of the Wellington site. Although not concluded as early in this year asoriginally envisaged, the contract represents a major underpinning of forecastvolumes for the next 3 years. This positive news, coupled with the increasingsuccess of component and gift pack purchases through the newly set up Chinaoffice, is providing a positive outlook for both volumes and profitability frommid-year onwards. The consumer market place has weakened since December and this, together withthe unusually large Christmas stock overhang at retailers consistently reportedby the media, has caused our customers to delay their current requirements andcreated a short-term gap in our order books for the next 2 months. We now expectaverage weekly business volumes in the second half of the year to be similar toour first half. We believe that the strong business position in toiletries and cosmetics that weenjoy, places the company in a good situation at a time when there isconsiderable market weakness and over capacity across the industry. Against sucha background, we are continuing to review possible acquisitions with a view tofurther strengthening our position. Notes to Editors: Swallowfield formulates, manufactures and packages fine quality household goods,toiletries and cosmetics across the whole spectrum of consumer markets for ownlabel and brand names. This information is provided by RNS The company news service from the London Stock Exchange