BPI.L Regulatory News (BPI)

16 Nov 2009 07:00



16 November 2009

INTERIM MANAGEMENT STATEMENT

British Polythene Industries PLC issues today the following Interim Management Statement in respect of the period of 1 July 2009 to 31 October 2009.

As we indicated at the time of our Interim Statement on 28 August, July was a much better month than in 2008. The same pattern continued into August, September and October and we are well positioned to have a much better year than in 2008, with the outcome nearer the top end of current market expectations.

Our UK business continues to benefit from the weakness of Sterling against the Euro, although our European business has seen increased competition from UK based competitors. Currently there is no sign of any upturn in demand from those customers facing difficult economic conditions and overall trading remains challenging.

Volumes will certainly be down on 2008, but our capacity and cost base is better aligned to our customers' demands and this has allowed us to reduce the losses in certain UK sites producing packaging for the depressed construction and industrial sectors of the economy.

Our raw material costs have risen in the last few months, but are now looking to stabilise or erode very slowly. We are fairly well hedged against this winter's power costs, both in the UK and Europe. 

We currently await seasonal demand from the retail sector for pre-store and transit packaging. Much of this demand is just-in-time; however we have, as yet, to see anything which would lead us to expect it to be any different from last year. 

We previously announced the closure of the Stockton site and this is proceeding to plan. Heavy duty sack production has already been moved and pallet-hoods and printed industrial sheeting are being transferred in the next few months. The wide agricultural and horticultural films will transfer on the installation of a new wide film line during the first half of next year and production at the Stockton site will then cease, eliminating the significant site costs. Full benefits should start to come through from the second half of 2010. In the meantime, we have significant duplication of both people and site costs.

Net borrowings remain at similar levels to June 2009.

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