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11 Nov 2015 07:00
11 November 2015
BRITISH POLYTHENE INDUSTRIES PLC
Trading Update
We indicated in the Interim Statement that volumes were slightly ahead of the previous year, and that we were seeing polymer price reductions. These reductions coincided with lower demand from certain sectors, resulting in volumes to the end of October being below those of the corresponding period, notwithstanding a healthy 5% year-on-year increase in sales of silage stretch-wrap. The shortfall in demand was offset by margin recovery during September and October. We are now seeing order books firming again, and polymer producers seeking price increases for November, but it remains to be seen how successful they will be.
Overall the Board remains confident that our business is on course to meet our expectations for the year as a whole.
Recent and imminent capital expenditure at Zele in Belgium and Leominster in the UK, our two largest facilities for production of blown stretch-films, has led to the decision to close a smaller facility at Widnes in the UK. This will both reduce costs and offer customers higher quality product. This closure will result in around 50 redundancies but some personnel may transfer to other Group sites at Bromborough and Winsford. We also plan to consult with employees to reduce numbers employed at VMB, our Consumer facility at Worcester, and in our Films business at Sevenoaks, in order to align staffing levels against current demand at these locations. In total, this may result in a further 40 redundancies. In addition, in October we disposed of the loss making Promopack Digital Studio business for a consideration of £0.2 million. In aggregate, the closure, restructuring, and disposal are designed to enhance performance in future years and will result in a one off exceptional restructuring charge to the 2015 accounts of around £1 million.
Cameron McLatchie
Enquiries:
Cameron McLatchie 01475 501000
Chairman
John Langlands 01475 501000
Chief Executive
Charlie Palmer/Karen Tang 0203 727 1000
FTI Consulting
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