Pilkington
Trading Statement
In accordance with its established policy, Pilkington on September 25
issued the following trading up-date ahead of its interim results announcement
for the period to 30 September 2002, which will be made on Wednesday,
30 October 2002.
Stuart Chambers, Group Chief Executive, summariseed:
'As we indicated at the time of the Annual General Meeting, we expected
difficult trading conditions in the current year. Our experience in the
first half year confirms this view. The significant improvement in our
competitiveness achieved over the last five years is helping to mitigate
in part the impact of these tough markets, but the outlook for the current
year remains challenging.'
Building Products:
As explained at the Annual General Meeting, the markets for Building Products
remain difficult, with the notable exceptions of the U.K. and Australia
where demand has been strong. Against this trading background the internal
action taken over time has strengthened materially Pilkington’s competitive
position in this market.
The slowdown in continental European markets in the second half of last
year continues to affect our European Building Products business, which
represents around 60 per cent of Building Products’ sales in total.
As a result of the reduced level of demand we extended the planned shutdown
for cold repairs of our float glass plants at Gladbeck in Germany and
at Venice, Italy. Both plants are now back to full production. Float selling
prices have been under pressure, but have now stabilised at a level around
10 –12 per cent below the average for last year.
By contrast with continental Europe the market in the U.K. has been robust,
underpinned by the rapid increase in the use of low emissivity glass in
buildings, which has been a legislative requirement since 1 April. This
has benefited both our primary and processing and merchanting businesses
in the U.K.
Building Products North America, which accounts for approximately 15 per
cent of Building Products’ sales, has been affected by the contraction
in commercial building, which is its prime focus, although the residential
market has been strong. In July the Ottawa float plant was taken down
for repair and will be back in service in early October.
Sales of our 35 per cent owned Mexican associate VVP were marginally down
in local currency terms, reflecting pressure on prices and the softness
of the US economy, especially on the West Coast. Operating profits in
sterling terms are below those of the first half of last year.
Although economic recession and currency devaluations in Argentina, and
devaluations and political uncertainty in Brazil, made trading in these
markets difficult, our South American operations have performed well,
with earnings still running at a reasonable level. The Australian housing
market continues to be strong and some glass products are in short supply.
Results for the year to date of this business, which represents approximately
10 per cent of Building Products’ sales, are very encouraging. Though
sales of our 19 per cent owned associate in China, SYP, continue to grow,
pressure from new competitive floats will result in lower profits than
the first half of last year.
Finance:
As indicated at the year end results presentation, from 1 April Pilkington
will charge the costs of ongoing restructuring programmes to operating
profit. The cost this year will be between 1-11ž2 per cent of turnover.
Also as indicated, priority is shifting to the generation of free cash
flow. Despite the difficult market background and a heavy programme of
cold repairs in our float plants this year, borrowings at 30 September
are expected to be at a similar level to the end of last year.
VVP (Mexico) has recorded a non cash exchange loss on its borrowings which
are denominated in US dollars. Despite this, Pilkington’s total interest
costs for the year to date will be in line with last year.
Tel: +44 (0)1744 692000
Email: mailto:contact@pilkington.com
Web: http://www.pilkington.com
Silly Season Fun or the return of Esther Rantzen?
A
number of local and national newspaper articles have recently been published
which could herald the unwelcome return of the media vilification of the
double glazing salesman. First, an article in The Daily Mirror exposed
a ‘pushy salesman’ from a Norwich window firm who had apparently
called a woman ‘a stupid f***ing old bag’ after she refused
to buy double glazing. Next, a Midlands based Sunday paper exposed the
‘double glazing dirty tricks’ of a company who has allegedly
been stealing leads from the rubbish bins of a rival firm. And most recently,
a Daily Mail article described how a telephone canvasser from another
West Midlands double glazing company threatened that he would ‘come
down and kill you, your wife and your children’ when his sales pitch
was rebuffed.
In the latter case, some comfort can be drawn from the fact that a supervisor
apparently overheard the abusive call and intervened to apologise, but
this did not prevent the householder from contacting the police. And while
the incident has led to two suspended telesales staff and an embarrassed
sales manager, it shows that complainants are increasingly likely to go
to the police to seek justice - and compensation.
The police are obliged to act on a complaint and can request telephone
records in the course of an investigation, so a flat denial will not go
down well. In the first of the incidents mentioned above, the woman householder
actually managed to get a tape recording of the salesman’s abusive
comment. This may be another indication of us following the example of
the USA in becoming an increasingly litigious nation - after all, anyone
who is bothered enough by getting ‘six calls in 18 months’ (the
first case above) can always sign up - at no cost - to the Telephone Preference
Service, which has been widely publicised and now has several million
subscribers.
Not everyone is convinced of the efficacy of the Telephone Preference
Scheme, which was initiated by Oftel after the Direct Marketing Association
failed to come up with a scheme which was deemed to satisfly the authorities.
The Direct Marketing Association ran their own voluntary fax and telephone
preference schemes before the introduction of the statutory schemes in
1999, and by April 2000 the numbers registered with the Telephone Preference
Scheme had already reached over a million.
The TPS states that ‘Organisations that engage in unsolicited direct
marketing by phone and fax must not contact individuals and companies
that have registered with the opt-out schemes. Telesales companies that
breach the Regulations could face action by the Data Protection Registrar.
Failure to comply could lead to fines of up to £5,000.
An alternative view of the TPS - which we do not necessarily endorse –
can be found here:
http://users.powernet.co.uk/hack/junk/prefserv.html
In conclusion, let’s hope that these are just silly season stories
which will fade as the autumn nights start to draw in and make the great
British public grateful for their double glazing. After all, we don’t
want Esther Rantzen on our case again!
Hot
Help from HomePro and British Gas's House.co.uk
HomePro has announced a strategic partnership with an association with
British Gas. From September 2002, British Gas will be offering consumers
- through its http://www.house.co.uk
web site - access to HomePro's Find-a-Pro service. The HomePro Find-a-Pro
service will enable British Gas's multitude of customers to locate reputable
and professional tradespeople for all types of home improvement projects
- except heating, provision of which will be retained by British Gas.
For the trades professional, registration with HomePro will now provide
them with the opportunity of quoting to undertake home improvement works
the majority of UK households.
Furthermore, British Gas will promote an lnsurance backed Guarantee (IBG)-
or warranty - to its customers seeking home improvements; further enhancing
the business opportunities and perception of the trades professional to
the consumer. Currently, a large proportion of British Gas customers'
source warranties for 'white goods' through the company - so the potential
is truly massive.
The trade professionals that will be accessible to British Gas's customers
will need to have undergone strict legal and financial vetting as well
as have been in business for minimum four years.
The IBG offered will be similar in form to HomePro's recent Home lmprovement
Protection Plan (HIPP). The HlPP enables consumers to: protect any deposit
payments up to the value of 25% of the contract; assist in providing a
new contractor in the case of a 'let down'; protect against work being
left unfinished; guarantee the quality of workmanship and materials; and
insure against increases in cost through changing contractor. The plan
also covers all the terms of the IBG in the event of a contractor ceasing
trading - and is fully transferable to subsequent dwelling owners.
House.co.uk was launched by British Gas in October 2001 as a one-stop
aid to help visitors move, improve and manage their homes conveniently.
Visitors can take advantage of on-line discounts and help and advice,
with services ranging from online conveyancing and mortgage arrangemenfs
to home improvement tips and an energy efficient audit. British Gas customers
can also save time by managing theirbills online.
Contact: Kim Rehfeld
Tel: 0870 7344 344
Email: mailto:info@homepro.com
Web: http://www.homepro.com
Read more about the British Gas website here
Vitro
Rebuilds Atrium at the World Financial Centre in New York
Following last week's story on the renewal of the first building in New
York's Ground Zero, The Winter Garden, we have heard from the glass company
which supplied the contract. Super Sky, skylight manufacturer and a division
of Vitro America in the United States, concluded the high-profile/fast-track
rebuilding project of the Winter Garden's Atrium, located in the World
Financial Centre in New York City.
Due to its location, it incurred severe damage by falling steel beams
and other wreckage precipitated by the ultimate collapse of the north
tower of the World Trade Centre.
Remarkably, forty-percent of the original aluminum framing was reusable;
therefore, Super Sky provided new caps and glass on that portion of the
structure. However, the remaining sixty-percent of the old skylight required
extensive repairs to the steel frame and complete replacement of the aluminum
skylight, while maintaining the 'look' of the old structure, along with
better performance (leak-proof) than the original atrium.
'Super Sky's fabrication centre located in Mequon, Wisconsin, commenced
to work on the project by mid-January 2002 by a staff of ten people, and
installation was completed in August 2002, exceeding by far owners' expectations',
said Roberto Rubio, President of the Flat Glass business unit of Vitro.
Besides Super Sky, Vitro America has four other divisions in the United
States; Binswanger Glass, Binswanger Mirror, Glasscraft and ACI Distribution,
dedicated to distribution and sales of construction glass; home decoration
and mirrors, residential and commercial glass, as well as automotive glass
replacement.
Vitro America, a Vitro company, has 270 distribution centres in the USA
and 2001 annual sales were close to US$500 million.
More information about this project can be found at the Engineering News
Record internet address:
http://www.enr.com/features/buildings/archives/020909.asp
Trouble
at the Top, says Plimsoll
82% of the Top 100 companies in the UK Windows & Doors industry have
seen their performance slip compared to three years ago. Their decline
is astounding. Currently, 20 of these companies are actually losing money.
This is according to the latest analysis of the Top 100 companies by Plimsoll
Publishing Ltd.
9 of the largest players in the industry are heading for trouble. These
companies are racing towards major problems as they pursue extra market
share and profitability.
Why is This Happening?
Despite a healthy market growth of 8.1%, not all are sharing in this prosperity.
18 of the companies are selling less than they were 3 years ago and remarkably
35 are making less profit.
What is Happening?
3 years of stagnant sales and an inability to curtail costs have left
many of the companies in a sorry state.
Of the Top 100 companies in the UK Windows & Doors industry:
* 18 are selling less
* 35 are making less profit
* 53 are carrying more debt
* 25 are employing less people
* 76 are spending more on salaries
* 27 have less shareholders funds
82 of the Top 100 companies in the industry fall into at least one of
the categories above. As a consequence of this serious decline, 21 of
the companies are currently rated 'Danger' in Plimsoll's latest financial
rating.
What Will Happen?
David Pattison, senior analyst at Plimsoll, suggests that acquisitions
will form part of a consolidation of the industry. 'There is just not
enough room for all these companies to breathe. We have identified 25
companies likely to be acquired by an aggressive competitor'.
Who Will it Affect?
The reaction of individual companies often varies. Some of the reactions
are predictable within the Top 100 UK Windows & Doors Analysis. Watch
out for activity at the companies named and analysed in the following
sections of the publication.
* 'Market Share at Cost' - 4 Companies
These companies are capturing market share at the expense of financial
strength. Is this a sustainable strategy?
* 'Potentially desirable to own' - 25 Companies
Some companies are under performing yet they seem to have hidden potential.
Could they be targets for the stronger players?
* 'Losing Pace' - 6 companies
A number of players are falling behind in the market. Are they losing
out in the race for the new market?
* 'Watch out for change' - 9 Companies
Recent performance has left some companies with big decisions to make.
Can they get back in the race?
The Top 100 UK Windows & Doors Analysis is available from Plimsoll
Publishing Ltd priced at £500. Order now and receive a FREE comprehensive
analysis of the other 1000 companies that make up the industry. Call 01642
626400 to order the Top 100 Windows & Doors Analysis today.
Sheerframe
Spells out Partnering Pedigree
UK window systems company LB Plastics has detailed its partnering credentials
in a new partnering pack.
The
company has been involved in some of the country's biggest window partnering
projects over the past twenty years.
The new pack, available to all local government and housing association
organisations, as well as major contractors in the public and private
sectors, contains information, in booklet and CD formats, on issues around
the partnering concept.
It spells out how LB works in partnership to exceed Best Value Performance
lndicators (BVPls). It also highlights how tenants are encouraged to participate
in the Sheerframe experience.
The pack provides supporting information about the design and performance
of Sheerframe window, door and curtain walling systems as well as giving
information demonstrating the products' sustainability and environmental
credentials.
The company is supporting the pack launch with a series of seminar/presentations,
delivered to individual organisations across the UK.
Details of the seminar programme and copies of the pack are available
by contacting Cary Doxey on mailto:sheerframe@lbplastics.co.uk
Tel: 01773 852311
Saint-Gobain:
First Half Net Income Excluding Capital Gains at EUR 515 Million
The Board of Directors of Saint-Gobain met on September 19, 2002 to review
the final consolidated financial statements of the Group for the six months
ended June 30, 2002. The main consolidated results, which are in line
with the estimates announced on July 25, are as follows:
Within the Housing Products Sector, the Pipe Division's distribution operations
have been transferred, as from January 1, 2002, to the Building Materials
Distribution Division, in order to set up a European organisation for
sales of materials in civil engineering markets.
This transfer does not affect overall Group income as presented below,
but it does impact sales and operating income data by division presented
in the Appendix.Group net indebtedness improved: taking into account the
fact that the dividend had not been paid at the end of June 2001, net
indebtedness at June 30, 2002 was EUR 724 million lower than a year earlier.
The Board of Directors also reviewed the financial statements of Compagnie
de Saint-Gobain, the parent company of the Group, which operates as a
holding company. These financial statements show net income of EUR 520
million for the first six months of 2002, compared with net income of
EUR 1,027 million for the same period of 2001, which included capital
gains from disposals that did not recur in 2002.
Group sales over the months of July and August were in line with the full-year
target of net income excluding capital gains on a par with 2001.
Tel:
01203 458844
Web: http://www.saint-gobain-glass.com
Double
First for Volkswagen with Golf and Caddy TDI Racers
Motor Sport history was made at Thruxton recently with the first-ever
British race victory by a diesel car, in the shape of the Golf TDI. Not
only that, but the final race of the Volkswagen Racing Cup season marked
the debut of the first diesel van - a Caddy TDI - to take part in a competitive
sprint race in the UK.
Michael Neuhoff and his Golf TDI drove their way into the record books,
beating a host of petrol-powered machinery in the Volkswagen Racing Cup
not once, but twice. Having qualified the Golf on pole position, Neuhoff
battled all the way to the chequered flag in the first of the day's races,
beating a 2.8-litre V6 petrol Beetle RSi by a half-second margin. In race
two the diesel domination was absolute, Neuhoff racing to a 14-second
victory. Along the way the TDI established a new lap record for the Hampshire
circuit in this race series.
'The Golf TDI seems to thrive on fast circuits,' said Neuhoff,'and so
we made some key suspension set-up changes to take advantage and found
that the long sweeping corners of Thruxton were just ideal for the car.
It's been fantastic fun getting to grips with a diesel racing car and
developing it into a winner for the first time ever.'
The
Caddy TDI Racer (pictured), in its first ever race, also demonstrated
the viability of a diesel van in mbtor sport, with its power and impressive
handling capabilities. Driven by Volkswagen Commercial Vehicles (UK) Director
Peter Wyhinny, who competes in a national go-karting series, the track-developed
Caddy made a big impression during the weekend's racing.
Volkswagen Racing successfully boosted the standard 90 bhp TDI engine
to an impressive 200 bhp - along with maximum torque of 264 Ibs ft - primarily
through the use of variable turbine geometry (VTG), larger versions of
the injectors, pump and intercooler and a reprogrammed Electronic Control
Unit (ECU). Though it failed to complete race one, it rolled home a creditable
16th in race two.
Peter Wyhinny was delighted with the van's inaugural performance:'We've
always known that the Caddy feels more like a car than a commercial vehicle
from behind the wheel, and the TDI engine is a gem. But with these modifications
it was a revelation around the track. lts reception at Thruxton, too was
delightful; the overwhelming enthusiasm for the Caddy surprised us all'.
Commenting on the weekend's racing events, Sam koach, Managing Director
of Volkswagen Racing UK, said: 'l think these victories prove that diesel
power has arrived as a force with which to be reckoned in motor sport.'
Tel: 01908 601187
Web: http://www.volkswagen.com
Art
of Glass for Glydegate
Bradford City's most ambitious piece of public art yet is proving a window
of opportunity for local contractors with the fitting of a giant glass
screen.
On Monday September 23 a specialist team of local glaziers lowered into
place a 4.5 by 3 metre piece of glass at Glydegate Square with the help
of a 25 tonne crane.
The
glass screen (pictured) was fitted onto the side of a new café
kiosk and inside a special camera relayed images of passers by alongside
recorded shots of famous local TV and film celebrities. The multi media
art work called 'Extra', has been designed by artists Frances Hegarty
and Andrew Stones from South Yorkshire and celebrates Bradford's rich
film heritage.
The glass - weighing 534 kg - was specially made by Solaglas of Bradford
for the art work.
Chris Hizzett, Regional estimator for Solaglas said: 'This is probably
the heaviest piece of single glazed glass I have made in over 20 years.
The glass is 16.8mm Stadip Safety glass in a construction of 2 leaves
of 8mm Planilux with a .76mm pvb interlayer.
Later this month, around 100 local people representing different generations,
communities and occupations will join famous celebrities with links to
the district for a special film shoot at Extra public art site in Glydegate
Square. Among those attending will be actress Jenny Agutter and TV presenter
Richard Whiteley.
The £5 million Glydegate Square development was completed in the
Spring and includes themed café bars next to a large terraced area.
The Glazing team consisted of:
On site supervisor/foreman glazier was John McCarthy (City and Guilds
for glazing) who has been with the company for 28 years, and working on
the team was Daniel Halligan (18 years service), John Turnpenny (28 years
service), John Quinn (13 years) service
Contact: Robert Kandt
Tel: 01274 436111.
For more on the Extra project log onto http://www.bradford.gov.uk/art/extra
A
Fitting Start for New Company
Two former fitters have set up their own window company to supply the
West Midlands area with Profile 22 frames.
Eric
Willden and Paul Leslie Clarke, together with Paul's son, Paul Matthew
Clarke (pictured right), created CW Frames, based at Castle Vale, to serve
the needs of local builders and installers wanting a competitively-priced
and quality window fabrication service.
Paul (senior) sums up their philosophy: 'We're fitters making windows
for fitters. Having nearly 50 years fitting experience between us, we
know what fitters want and we can offer a friendly, reliable local service
at the right price.
'Because we're small enough to be flexible, we can respond quickly to
the needs of our customers,' continues Paul.
The directors, who have worked for large national window companies, plan
to grow the business steadily as their customer base expands. They chose
Profile 22 because of its quality system, plus the technical and marketing
support that is so vital in the early days of a new business.
'Having fitted Profile 22 windows in the past I knew it was a good profile
and simple to install,' says Eric. 'Using the 70mm system gives us versatility
and enables us to supply any type of window tailored to our customers'
requirements - all of course discussed over a friendly cup of coffee!'
CW Frames can be contacted on 0121 749 5511.
Profile 22:
Tel: 01952 290910
Web: http://www.profile22.co.uk
Heywood
Williams on Track
Heywood Williams Group PLC, the UK manufacturer and distributor of PVC
windows, doors and conservatories, 'is well on track to deliver its turnaround
plan, meet market expectations for the year and is making good progress
towards realising the strategic goals', said Chief Executive Ian Stuart
when he announced the interim results for the half year ended 30 June
2002.
The operating profit increased by 56% to £11.2 million, Earnings
Per Share increased by 79% and the UK restructuring programme is set to
deliver £3.5 million of cost savings in 2003. A one-off operating
exceptional item of £10 million has been set against these figures
in relation to the estimated lifetime cost of a legacy product rectification
issue of a cosmetic nature, with the related claims arising over the next
two to three years. The company is already in the legal process of re-claiming
this amount from its supplier.
The benefits of restructuring and the investment in new facilities and
research and development costs in bringing new products to market such
as the new conservatory roof, composite door, Fibrex material, the Centra-Lock
and a £3 million investment in new window suites should begin to
have a positive impact on the results in the very near future.
Since arriving as Chief Executive some eighteen months ago Ian Stuart
has been committed to a policy of strategic clarity and organic growth
that concentrates on targeting both established and new markets with a
range of products and services. Complementing this growth activity is
a purchasing strategy designed to drive costs from the operations. As
well as the restructuring plan, savings are being achieved by a combination
of outsourcing, purchasing on a central group basis and by strengthening
local purchasing management.
'We have been delighted with the progress of the individual companies
within the group in the last six months and all the signs point to further
growth and profitability. We are also beginning to see the benefits of
operating on a group basis in markets such as DIY retail, new build and
social housing and these new markets offer huge opportunities for all
companies within the group. In these market sectors we can offer, as a
group, a comprehensive range of products and services on a national scale
that puts us in a league of our own. Heywood Williams is not only the
market leader in terms of sales, but is now exhibiting all those characteristics
you would expect of a company in that position', concludes Stuart.
Web: http://www.heywoodwilliams.com
Meetings
of European Fenestration Federations in Barcelona
The European fenestration federations have selected Barcelona as the venue
for their annual meetings from 31 October to 3 November 2002. The material-specific
federations FAECF (aluminium), FEMIB (wood) and EPW (plastics) will hold
their individual annual meetings in the Catalan capital and will address
in a joint EuroWindoor plenary meeting the issue 'The future of the European
construction market and its effect on the European fenestration industry'.
The managing directors of the member associations, members of the EuroClubs
and - as last year - also the members of the individual national associations
are cordially invited. Interested guests are also welcome to attend the
events. According to Mr. Karl Heinz Herbert, secretary general of EuroWindoor
'...strong individual associations make sure that their memberships have
a say in European matters. EuroWindoor, the materials-neutral stakeholder
of the fenestration industry is a means to bundle the opinions of all
material-specific associations when it comes to items of common interest
and make oneself heard. This applies, for example, to the transposition
of European standards and the future CE-mark.'
The events of the material-specific associations include technical papers
presented by experts of the relevant trades. For FAECF, Mr. Hans Rudi
Schweizer from Switzerland will cover 'Concepts for curtain walling',
for FEMIB Mr. Kurt Heikkila of Andersen Windows will talk about the situation
in the US market. A representative of Ducker Research, the global market
research company, will update on the state of play of the window, curtain
walling and external door markets. Communication between the delegates
from different European countries and of different languages, will be
facilitated by simultaneous interpretation.
The fact that Barcelona is among Europe's most beautiful cities, with
a pleasant climate, especially in Autumn, will not be left unnoticed by
the delegates after days full of technical discussions and presentations.
In 2002, Barcelona celebrates the 150th anniversary of the ingenious architect
Antoni Gaudi. A tour of the fabulous and bizarre structures erected by
him will be the highlight of the by-program.
Tel: +49 (69) 95 50 54 0
Web: http://www.window.de
Wolseley
Boosted by Booming House Market
Wolseley is showing the rewards of the booming UK house market and strong
consumer demand with a 15.4% rise in pre-tax profits.
The building materials group operates across Europe and North America
but says the UK had been its strongest operation.
The group says its Wolseley Centers outlets took 'full advantage' of the
buoyancy of the repairs, maintenance and improvement (RMI) sector as annual
sales grew 8.7% to £1.7 billion.
It also contributed to a 10.7% surge in group sales to £7.97 billion
while annual pre-tax profits before one-off costs jumped to £437.4
million.
The group has boosted its performance over the year with an aggressive
expansion policy, spending £160.3 million on 14 acquisitions. These,
along with those made last year, added £740 million in sales and
£39.8 million in trading profits. The group is aiming to spend around
£200 million each year on acquisitions and said today it would continue
to search out key deals.
The UK's strong performance came against a background of flat conditions
in mainland Europe and a mixed showing in the US.
Bestbuy
Quality Reaches Barbados
Shepley customer, Bestbuy 2000 Ltd, has recently received an order from
Barbados! A couple who had used Bestbuy before were so impressed with
the product and the quality of service they received, that when they moved
to a villa in Barbados, they asked for more of the same. The white PVCu
windows supplied were worth £8,000 to Bestbuy and when the couple
return to the UK for a holiday in November this year, they are likely
to bring another order to the company for their colleagues in the sunshine.
'We are a family oriented company and pride ourselves in supplying a quality
product for a reasonable price,' comments Michael Dainty, Managing Director
of Bestbuy 2000 Ltd. 'We've delivered our windows right across the UK
and Southern Ireland before but we've never been quite so far a-field
as Barbados!'
Contact: James Brisbane
Tel: 0161 339 2433
Email: mailto:james@shepley.com
Web: http://www.shepley.com