BPI.L Regulatory News (BPI)

15 November 2010

INTERIM MANAGEMENT STATEMENT

British Polythene Industries PLC issues today the following Interim Management Statement in respect of the period of 1 July 2010 to 31 October 2010.

As we indicated on 31 August in our Interim Statement, the result for the second half will depend on a respite from polymer price increases and improved operational performance from the measures we have taken to improve our cost base.

We are pleased to report that the improvements we expected from these measures have started to come through and that our restructuring program is performing to expectations. Volumes have also remained sound, if somewhat subdued in certain sectors.

However, far from getting any respite from polymer price increases, we continue to be buffeted by increases, particularly for certain of the higher-performance grades that we use for many of our technically demanding products. Many of our suppliers have scaled back production, are running on tighter inventories and were quick to take advantage of the recent wide-scale disruption to petro-chemical refineries in France which led to a severe imbalance of both feed-stocks and finished raw materials.

As a result it is difficult to be certain about input costs for November and December, and our current profit expectations for the full year before property gains, restructuring costs and pension financing, are towards the lower end of current market forecasts.

However, after the net gain on sale of properties, less restructuring costs, we are confident that the overall result will be well ahead of last year.

In November, we sold the vacant Brampton site for £0.3 million, and currently anticipate the sale of the Essex site for £2.5 million early next year. So, despite higher raw material costs, the restructuring program continues to have a positive impact on our borrowings which continue to trend downwards, as we rationalise the number of sites, reduce the quantum of stock and work-in-progress and dispose of the surplus properties.

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