Fiberweb pre-close statement - 29 June 2007
6 August 2007
Fiberweb is today publishing its pre-close trading statement, ahead of interim results for the six-month period ending 30 June 2007, which will be announced on 7 August 2007.
For the full year, the Board confirms that overall performance remains in line with its expectations at the time of the trading update on 16th April 2007.
In response to the issues described in the April trading update, we have been actively restructuring the Americas Industrial business. Cost reduction initiatives are making good progress and we expect to see benefits coming through later in the year. Following a detailed review of inventory, Fiberweb now expects to record a non-cash, non-recurring write-down of up to £5m in the first half of 2007. Continuing our restructuring, we have decided to close the loss-making manufacturing line at Gray Court, South Carolina, which had a carrying value of around £20m at the end of 2006. The majority of sales from this line will be moved to our Old Hickory, Tennessee site. We are making good progress in customer qualification of products from Old Hickory containing recycled polyester, with successful completion likely early in the second half of 2007.
In Hygiene, we have agreed the sale of our non-core US cotton bleaching business to Barnhardt Manufacturing Company for $1.6 million plus working capital. Additionally, following slower than expected commercialisation of elastic non-wovens produced at Linotec, a specialist line in Germany, the £10m carrying value of this site is now being reviewed.
Since the April trading update, raw material prices have increased to reach levels around 6% above our assumptions. If these levels are sustained or increase further during the second half, there will be downward impact on profit for the year.
As indicated in our 2006 results announcement, progress in 2007 was expected to be weighted towards the second half. As a result, we continue to expect first half performance to be significantly behind that in the corresponding period last year. The Board is confident that significant overall progress will be evident in the second half of the year.
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Contacts
Fiberweb plc
0208 439 8594
Daniel Dayan, Chief Executive
Simon Bowles, Chief Financial Officer
Weber Shandwick Financial
0207 067 0700
Ian Bailey / Nick Dibden / James White