BPI: High raw materials costs have hit the UK films manufacturer

British Polythene Industries (BPI) said continuing polymer price increases could result in its 2004 full year profit being significantly lower than in 2003. The statement was made in BPI’s interim results, which were “in line with market expectations despite difficulties with raw material pricing”.
The UK films producer announced a pre-tax profit for the first six months of 2004 of E10.5m, compared with E11.8m for the same period in 2003. Sales from continuing operations were E278.5m, slightly up on 2003’s half-year figure of E277m.
The company has seen margin compression and volume loss as it has attempted to pass on polyethylene price increases to customers.
Raw material cost increases have also had an impact on cash flow, with an additional E15.9m required for working capital since the year-end. BPI’s borrowings increased to £59.6m E87.8m at 30 June, compared with E78.3m in June 2003.

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