Filtrona Plc (FLTR), a maker of price labels for Wal-Mart Stores Inc., said first-half earnings fell 1.6 percent on costs to close a U.S. factory and the effects of a stronger British pound.
Net income dropped to 18.1 million pounds ($36.4 million), or 8.2 pence a share, from 18.4 million pounds, or 8.3 pence, a year earlier, Milton Keynes, England-based Filtrona said today in a statement. Sales declined 4.5 percent to 257.2 million pounds.
Filtrona shut a plant in Virginia and added factories in Mexico and China to reduce expenses, boost profitability and meet rising demand for plastics in emerging markets. The British currency's gain against the dollar reduced sales by about 16 million pounds, the company said. North America is Filtrona's biggest market, generating about 39 percent of annual revenue last year.
``It's quite a significant impact,'' Chief Executive Officer Mark Harper said in an interview. The company has translated its U.S. earnings at a rate of $1.97 per pound so far this year, compared with $1.79 last year, he said.
Filtrona fell 3.75 pence, or 1.6 percent, to 226 pence in London trading, making it the third-biggest decliner in the FTSE 250 Index today. Earlier, it dropped as much as 5.6 percent, the most since the company was spun off from U.K. packaging maker Bunzl Plc in 2005.
Operating profit was equal to 13.5 percent of sales, compared with 11.8 percent a year earlier, Filtrona said.
The company, which also makes trim for Boeing 777 airliners, is ``pleased'' with first-half results and `looks forward to the rest of the year ``with confidence,'' Harper said.
Filtrona's plastics division, the world's biggest maker of self-adhesive tear-tape used to open compact-disc wrappers, also produces parts for refrigerators and nets that catch falling rubble on building sites. Its fibers unit is the world's largest maker of wicks used in pregnancy testing.
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