Glassmaker Pilkington sees tougher second half

Date: 30 October 2001
Source: Yahoo
British glassmaker Pilkington Plc reported a 13 percent rise in first-half profits on Thursday that beat market forecasts but said it expected tougher trading conditions in the second half.Pre-tax profits before exceptionals rose to 115 million pounds ($164 million).

Analysts had forecast around 112 million.

The group said its markets in the United States and Far East had weakened recently. The United States counted for over a third of group sales last year.

Rival Belgian glassmaker Glaverbel also said earlier this week it would have to trim output to cope with less demand, as global economic slowdown impacts the glass sector.

U.S. car giant General Motors, which is among Pilkington's key auto glass customers, last week posted a third-quarter net loss of $368 million and forecast a sales slump.

But Pilkington said it was well placed to cope with current market conditions, but its shares edged down in morning trade, as the second half outlook led investment bank Merrill Lynch to trim its forecast for annual profits.

Pilkington was trading down 1.9 percent at 103 pence by 0950 GMT. The stock has underperformed the FTSE construction and building materials sector by about 10 percent since the start of 2001.

Merrill analyst Kevin Cammack said he would probably cut his current annual pre-tax profit forecast of 245 million pounds by five percent. He kept an "accumulate" rating on the stock, with a price target of 120 pence.

Leading Pilkington institutional shareholder Active Value Capital said that while they were pleased with the results and the company's management, they felt Pilkington should buy back shares to give a boost to the stock price.

"We've been in regular correspondence with the company, and they've said a share buyback is something they would consider," Active Value fund manager Julian Treger told Reuters. Active Value owns around four percent of Pilkington.

600450 Glassmaker Pilkington sees tougher second half
Date: 30 October 2001
Source: Yahoo

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