LONDON, Aug 28 (Reuters) - British plastics and fibre products firm Filtrona
said a continued weakness in U.S. markets and rising raw materials
costs dented its half-year profit but was still hopeful of hitting full-year
targets.
The firm, which makes cigarettes filters and laminates for passports,
reported a 1.6 percent fall in pretax profit to 31 million pounds as revenue
grew 3 percent to 264.6 million pounds. The company increased the interim
dividend by 7.1 percent to 2.70 pence.
The company, which operates in 24 countries, saw profits at its
cigarette filters division fall by 12.4 percent to 14.9 million pounds due to
falling demand and mounting costs. The rising oil price has caused significant
raw material cost inflation, particularly in relation to polymers, said the
group.
Measures taken to raise selling prices benefited Filtrona by 3.5 million
pounds, helping to offset 4.6 million pounds of increased material costs. The
group said it would continue such pricing measures in the second half, adding it
was confident it would meet forecasted full-year pretax profit of 60.2 million
pounds.
"There has to be caution with regard to market conditions during the
balance of the year ... but the board remains confident that Filtrona's
performance will continue to progress in line with its expectations," said Chief
Executive Mark Harper.
The Milton Keynes-based group said profit in its plastic technologies
unit rose 11 percent with strong performances from protection and finishing
products and coated and security products divisions, highlighting Filtrona's
"robustness" amid "challenging market conditions which have prevailed during
this period," according to Harper.
Shares in Filtrona, which have fallen 18 percent since the turn of the
year, were down 0.3 percent at 165.5 pence by 0810 GMT on Thursday.
Filtrona's stock has underperformed the UK support services sector index
<.FTASX2790> by 5 percent since the start of 2008.
Reporting by Rhys Jones; Editing by Greg Mahlich) Keywords: FILTRONA/
tf.TFN-Europe_newsdesk@thomson.com
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