Ken Minton, chief executive, admitted that life was tough, but said Laporte would reap the benefit in the second half of five major rationalisations and investments regardless of the state of the economy.
These are the splitting of Interox, the former joint venture with Solvay of Belgium; capital expenditure and manning reductions in absorbents; cost reduction in organic speciality chemicals; UK rationalisation and acquisitions in hygiene and process chemicals; and a full contribution from the US acquisition Rockwood.
The profits fall was due to a decline at the associate level from Interox to pounds 9.6m from pounds 16.4m. Profits from the retained parts of Interox, after the split on May 21, were maintained at 1991 levels. Parent and subsidiary level profits were 3 per cent higher.
Mr Minton said that because Laporte operated in niche markets, it was less tied to the state of the economy than a commodity-based company. In the US, where he sees no sign of an upturn, and in continental Europe, Mr Minton said there were opportunities in new products and in increasing geographical spread and market share. Only 30 per cent of profits come from the UK.
Currency gyrations have had a marginally beneficial effect as profits translation will be boosted by a stronger dollar and German mark. The UK operations do little importing or exporting.
Although Laporte ended the first half with net debt of pounds 70m, there was no interest charge on the profit and loss account. Borrowings are in foreign currencies, mainly low interest-rate dollars, and there is cash of pounds 120m in the UK attracting high returns.
Analysts expect full-year pre-tax profits to reach pounds 92m against pounds 97.2m in 1991. The shares rose 43p to 497p.Reuse content