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10 May 2016 12:30
10 May 2016
BRITISH POLYTHENE INDUSTRIES PLC
AGM TRADING UPDATE
British Polythene Industries PLC ("BPI") is issuing this trading update for the period from 1 January 2016 to date, ahead of its Annual General Meeting to be held today in Greenock at 16:30 hrs.
When we announced the completion of the disposal of our Chinese subsidiary on 27th April, we also indicated a positive start to the year. We can now report that trading performance for the first four months has been strong and ahead of management's expectations, having benefitted, in particular, from lower energy costs and favourable currency translation effects.
Polymer prices, which eased slightly in the first quarter, look now to be firming, although we do wonder how the polymer industry is managing to retain the record levels of margin that they currently enjoy over their raw material input costs. We will be passing these increases through to our customers, although we will have the normal lag in so doing.
We announced to our employees this morning the proposed closure later this year of our films plant at Sevenoaks in Kent. Production of their high quality films will be moved to a larger, more modern facility at Bromborough on the Wirral. The Bromborough site has a much higher roof, permitting faster production rates, and has recently been uprated by a significant capital expenditure programme, making it the largest specialised film plant in the UK.
Closure costs at Sevenoaks will be around £1 million, and we currently anticipate an increased contribution from the Bromborough plant of over £1 million per annum from 2017. The closure costs of £1 million will be offset against the gain on the disposal of our Chinese subsidiary of over £5 million already announced. The subsequent disposal of the Sevenoaks site, and the reduction in duplicated working capital, will, in due course, reduce borrowings.
Your Board remains confident of the outcome for 2016.
Enquiries:
Cameron McLatchie 01475 501000
Chairman
John Langlands 01475 501000
Chief Executive
Charlie Palmer 0203 727 1000
FTI Consulting
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