Fiberweb, which supplies specialist non-woven fabrics to industrial and healthcare companies, managed to edge up adjusted first half pre-tax profits to £4.5m, in spite of a 17 per cent decline in volumes. Underlying operating margins rose by 40 basis points to 4.4 per cent, helped by a combination of restructuring, which cost the company £17.5m, a rationalisation of its product offering and lower raw materials costs.
Progress was made despite tough trading in Fiberweb's industrials division, which is particularly exposed to the construction industry both in Europe and the US. Sales in these regions slumped by 18 per cent and 27.5 per cent, respectively, but underlying operating profits rose 7 per cent to £6m, reflecting lower commodity prices and the exit from unprofitable business.
The hygiene division also saw sales fall, by £10.9m to £148m, of which £3.4m is due to the closure of a production facility in Italy. But profit margins improved to 5.9 per cent, up from 4 per cent, on lower raw material costs and restructuring savings. Chief executive Daniel Dayan said there were signs of stabilisation in Fiberweb's main markets, with hygiene picking up particularly as public sector organisations order material for masks and safety equipment, while infrastructure construction has picked up in the US. However, he added that there has been no sustained improvement in volumes.
Broker Panmure Gordon forecasts pre-tax profits of £9m and EPS of 8.1p (2008: £9m/7.3p.)
| ORD PRICE: | 62p | MARKET VALUE: | £ 75.9m | |
| TOUCH: | 60-62p | 12-MONTH HIGH: | 76p | LOW: 23p |
| DIVIDEND YIELD: | 6.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 132p | NET DEBT: | 76% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2008 | 260 | 1.8 | 1.9 | 1.7 |
| 2009 | 243 | -13.0 | -6.2 | 1.7 |
| % change | -7 | - | - | - |
Ex-div:30 Sep Payment:06 Nov *Includes intangible assets of £35m, or 29p a share | ||||
