Improved performance in both the UK and mainland Europe contributed to a 4% year-on-year increase in operating profit to GBP 17.0m (EUR 21.3m) in the first half of 2014 at the UK’s largest PE film producer, British Polythene Industries (BPI, Greenock, Scotland; www.bpipoly.com). The result was achieved despite a setback in North America due to a delay of almost three months in delivery and installation of the replacement of the company’s largest extrusion line, it said. Sales in the period were down marginally at GBP 281m, as the strength of sterling reduced revenues from mainland Europe and North America by almost GBP 5m. Sales volumes of 154,000 t in the first six month of the 2014 were 2% up year-on-year, reflecting the acquisition of UK film extruder Flexfilm in 2013 (see Plasteurope.com of 17.05.2013), some growth in Europe and volume recovery in the UK in the construction sector. The company said that downgauging of its products continued.

In the UK and Ireland, operating profit increased by 23% to GBP 7.5m due to increased sales volumes, an improved sales mix and operational improvements, while volumes were up 3% at 104,800t. Volumes in the company’s plain film operations were ahead of 2013 reflecting the acquisition of Flexfilm, with flat demand in most markets. Silage volumes were down on the previous year with reduced margins due to aggressive competitive pricing, particularly in Ireland, and unfavourable exchange rates. Mainland Europe saw operating profit increase by 5% compared with the first half of 2013 to GBP 10.1m, with volumes up 6% at 46,100t thanks to additional capacity.

The delay in the installation of the North American extrusion line led to an operating loss of GBP 600,000 in the first half of the year, compared with a profit of GBP 700,000 in H1 2013. Volumes were down to 3,100 t from 5,000 t. Support from the company’s UK sites meant that actual total sales volumes were 4,600t, 8% behind 2013. BPI chairman, Cameron McLatchie, said: “The much better UK result was achieved against a background of a late start to the agricultural season in the south-west of the UK, due to flooding, and the European improvement was diluted by adverse translation of currency during the period.

The replacement machinery in North America is now installed and operating and we anticipate deriving benefits from this in 2015 and beyond. The good performance in the UK and Europe has continued into the second half, our order books are sound and we now anticipate a good outcome for 2014.”

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BPI Interim results H1 2014 as a PDF file