Bloomberg News

Filtrona Net Advances 6.6% on Products, Asian Plants (Update1)

March 01, 2007

Filtrona Plc (FLTR), a U.K. maker of plastic packaging and cigarette filters, boosted second-half profit 6.6 percent as it introduced higher-value products and added factories in Asia to cut costs and target new markets.

Net income at the company, which makes price labels for Wal-Mart Stores Inc. and trim for Boeing 777 airliners, rose to 16.1 million pounds ($32 million), or 7.2 pence a share, from 15.1 million pounds, or 6.9 pence, a year earlier.

Filtrona added plants at locations including Ningbo, China, to pare expenses and meet increased demand for plastics in emerging markets. The Milton Keynes, central England-based company's fibers unit has also introduced products that soak up ink for Eastman Kodak Co. printers and help test saliva for diseases. Sales volumes for its cigarette filters declined.

``Plastic Technologies has been growing particularly well by expanding geographically and reducing costs,'' Filtrona Chief Executive Officer Mark Harper said in an interview. ``Marketing spend is stimulating our top line growth. Organic growth is the highest priority.''

Shares of Filtrona, which was spun off from U.K. packaging company Bunzl Plc in 2005, fell 5.75 pence, or 2.3 percent, to 240 pence, as European stocks extended their biggest slump in four years. That gives Filtrona a market value of 526.4 million pounds.

Second-half sales barely rose to 261.3 million pounds as sterling's advance against the dollar clipped the value of exports by as much as 12 million pounds, Finance Director Steve Dryden said in an interview.

Filtrona was largely successful in passing to customers the higher cost of polymers used to make plastic.

Pregnancy Testing

The company's plastics division makes products ranging from toothpaste tubes and parts for refrigerators to nets that catch falling rubble on building sites and tear-tape used to open compact-disc wrappers. Its fibers unit is the world's biggest maker of wicks used in pregnancy testing.

Full-year net income rose 9.2 percent to 34.5 million pounds, or 15.6 pence a share, from 31.6 million pounds, or 14.4 pence, Filtrona said in a statement today. Sales advanced 6 percent to 544.2 million pounds.

To contact the reporter on this story: Sophie Kernon in London at skernon@bloomberg.net.

To contact the editor responsible for this story: Chris Jasper in London cjasper@bloomberg.net.


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