25th Jun 2007 07:02
Filtrona plc25 June 2007 25 June 2007 FILTRONA PLC TRADING UPDATE ON PROGRESS IN 2007 AND DISPOSAL OF GLOBALPACK FOR $56M Filtrona plc ('Filtrona'), the international, market leading, speciality plasticand fibre products supplier, today issues a pre-close trading statement ahead ofits interim results for the six months ending 30 June 2007, which will beannounced on 30 August 2007. Filtrona also announces that it has signed an agreement for the sale ofGlobalpack, its Brazilian consumer packaging business. TRADING UPDATE In the first five months of 2007, Filtrona has delivered encouraging resultswith strong underlying organic growth. The adverse impact of currencytranslation, particularly the movement of the US dollar, has lowered theCompany's reported growth towards historical rates and, at the half year, thetranslation impact on operating profit is expected to be circa £2m. Plastic Technologies The moderation of Plastic Technologies' sales growth in the second half of 2006has continued into 2007 with the US Profile and Sheet business principallyaffected. Protection and Finishing Products has traded well with newdistribution units starting up successfully in Hungary, Poland and the USA. TheDuraco acquisition, completed in May, has made a good start. The Coated andSecurity Products business has delivered improved performance assisted by therecovery in promotional tear tape volumes. Fibre Technologies Fibre Technologies has delivered strong profit performance with both CigaretteFilters and Bonded Fibre Components performing very well in spite of theexpected sales volume and revenue reduction in Cigarette Filters. The previouslyannounced restructuring programme within the Cigarette Filters business hasprogressed to plan with the completion of the Richmond, Virginia plant closureand the successful transfer of volumes to Greensboro, North Carolina andMonterrey, Mexico. The Monterrey facility is performing well as a result ofsustained operational improvement and performance in Asia has also been good.Cigarette Filters' new policy of obtaining enhanced value for R&D services isalready proving beneficial. The Bonded Fibre Components business is performingwell at all locations as a result of market share gains in the writinginstruments market and the success of new projects. Despite lower revenues in Fibre Technologies, the success of profit improvementprogrammes has generated substantially improved margins in the segment andenhanced margins for the Company as a whole. Overall, with strong underlying organic growth now being supplemented by thefirst contribution from the Duraco acquisition, the Board remains confident thatFiltrona's financial performance will continue to progress in line with theBoard's expectations. DISPOSAL OF GLOBALPACK FOR $56m Filtrona is pleased to announce it has signed an agreement for the sale ofGlobalpack, its Brazilian consumer packaging business, to the Itavema Group fora cash consideration payable of $56m. Completion of the transaction is conditional upon Filtrona's receipt of theinitial consideration of $31m and the purchaser's provision of security via amajor international bank for the deferred consideration of $25m, which ispayable in five equal annual instalments. For the year ended 31 December 2006,Globalpack's profit before tax was £2.1m and gross assets were £23.5m. Filtrona intends to use the net proceeds from the sale to repay Group debt andcompletion of the transaction is anticipated to take place on 27 June 2007. Commenting on the disposal, Chief Executive, Mark Harper said:- "The disposal of Globalpack confirms Filtrona's commitment to maintain a clearfocus on the growth of its core international businesses within plastic andfibre technologies. Globalpack did not fit the Board's longer term strategicplans. I would like to thank everyone at Globalpack for their contribution toFiltrona and to wish them every success for the future. 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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