15 December 2005
Filtrona today issues a pre-close trading statement ahead of its results for the year ending December 31st 2005 which will be announced on March 1st 2006.
Filtrona demonstrated its resilience during the second half of 2005 with performance ahead of historic growth trends despite significant increases in raw material and energy costs.
Plastic Technologies' sales have continued to show strong growth and profits have grown well despite the rapid increase in raw material costs. The performance of our North American businesses was particularly encouraging. The FractureCode development programme continued to yield positive results with the phased customer trials being extended from one to two manufacturing facilities. Sustained investment in marketing programmes, new products and productivity improvements continue to drive growth in this business segment.
Fibre Technologies has regained sales momentum in the second half as expected, with volume growth at our new filters plant in Monterrey, Mexico. Profit performance will be marginally lower than the same period last year. The performance of Cigarette Filters was adversely impacted by start up operating costs arising from the new factory in Mexico and the transfer of technology following the closure of the filters facility in Switzerland. Within Bonded Fibre Components, household products demand is recovering and volumes progressed satisfactorily at our new Ningbo facility in China. Prospects for the Fibre Technologies business remain positive and performance in 2006 will benefit from additional outsourced special filter volumes and lower costs due to the Swiss closure and the new facilities in China and Mexico.
The second half results will include the expected demerger costs of £1m. In addition, higher US interest rates are expected to increase net interest costs for the full year to £6m.
Filtrona's continued investment both in developing its niche market positions through service, supply chain and new product development and in productivity improvement programmes gives the Board confidence that Filtrona will continue to develop satisfactorily.