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Fiberweb reports further progress
Wed, 08 Feb, 2012
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Fiberweb reports further progress
Fri, 5 Mar 2010, 17:11:00
Nonwoven products supplier Fiberweb produced slightly better than expected results for 2009 and it has declared the completion of its turnaround phase. Fiberweb had hoped to announce an acquisition with the figures and that is why they were delayed by one day. Fiberweb failed to secure this acquisition at an appropriate price. Fiberweb is still looking for acquisitions but only at a valuation that will enhance earnings. Revenues fell from £512.8m to £454.2m but operating margins improved from 3.7% to 5.1%. There is scope for further improvement in margins. Underlying profits rose from £9m to £11.1m. Restructuring charges and write-downs were still significant at £17.2m but that was one-half the previous year. The final dividend is unchanged at 2.5p a share. Fiberweb appears likely to maintain its total dividend at 4.2p a share for the foreseeable future. Net debt fell from £149.9m to £136.6m by the end of 2009. Higher interest charges relating to the refinancing of group debt will hold back future profits, though. Fiberweb negotiated a new £210m loan facility in February. The facility lasts until July 2013 but interest rate margins are much higher than the previous facility. This means that there will be an additional £3m of interest payments in 2010. There will also be a £3m non-cash amortisation charge, relating to interest rate swaps, in each of 2010 and 2011. The hygiene sector remains strong with Fiberweb running at capacity but there has yet to be a recovery in the construction market, which accounts for two-fifths of the industrial division's revenues. Panmure Gordon forecasts earnings of 5.6p a share for 2010.
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