15th Dec 2006 07:58
Filtrona plc15 December 2006 FILTRONA PLC TRADING UPDATE ON PROGRESS IN 2006 Filtrona today issues a pre-close trading statement ahead of its results for theyear ending 31 December 2006, which will be announced on 1 March 2007. Filtrona has continued to develop satisfactorily during 2006, in line with theBoard's expectations, and underlying organic revenue growth in both Plastic andFibre Technologies has continued to exceed historical growth rates. As expected,the first half benefit from foreign currency exchange movements has reversed inthe second half of the year primarily due to the weaker US dollar. Plastic Technologies Plastic Technologies has maintained good revenue and profit growth. Protectionand Finishing Products performed particularly well and has now grown to becomeFiltrona's largest profit contributing business, benefiting from the impact ofnew product ranges, ongoing expansion in continental Europe and Brazil, and thestrength of the oil and gas sector. In Coated and Security Products,FractureCode is expanding to support both the first customer roll-out and thedevelopment of other licensees, although the tear tape business has experiencedcontinuing soft demand for printed promotional tapes. The Plastic Profile andSheet business has maintained its strong growth with the point of purchase andaerospace sectors again showing excellent results. In the second half, theGlobalpack consumer packaging business has also performed consistently ahead ofthe comparable period last year due both to improved market conditions and afocused productivity improvement programme. Plastic Technologies is expected to maintain its strong growth in 2007 as itenhances its niche market positions through sustained investments in geographicand supply chain development, range expansion and new marketing programmes. Fibre Technologies Fibre Technologies has continued to deliver good revenue growth with improvedprofits following productivity gains in the Mexican Cigarette Filters business.The Fibertec Bonded Fibre Components business has produced good results with anencouraging performance in both household products and writing instruments. Looking forward, as highlighted at the half year, the market conditions for theCigarette Filters business in 2007 will remain challenging as customers respondto mature and declining Western markets with significant capacityreconfiguration. Recent customer discussions indicate that Filtrona willexperience a reduction in volumes of conventional carbon dual filters next year.The volume reductions will impact the Company's European facilities and itsfacilities in North America where, as previously indicated, a capacity review isalready underway. In anticipation of weaker volumes, management has introduced amajor cost reduction programme, which, together with increased volumes in Asia,will mitigate the impact from the reduction in activity. The cost reductionprogramme will require significant plant restructuring to improve productivityand, as a result, a restructuring charge of circa £5m is expected in 2007.Filtrona's strategy is to move the focus of the Cigarette Filters businesstowards the research and development of innovative and more complex filtersolutions to enhance value to customers. This underpins the Company's confidencein the future prospects of the Cigarette Filters business to meet the growingdemand for innovative filters for PREPs (potentially reduced exposure products)and other differentiated tobacco smoking products, and for research anddevelopment services. The Board remains confident that Filtrona will continue to make satisfactoryunderlying progress in 2007. Enquiries: Filtrona plc FinsburyMark Harper, Chief Executive James LevitonSteve Dryden, Finance Director Gordon SimpsonTel: 01908 359 100 Tel: 020 7251 3801 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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