Chinese smokers light up Molins

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The Independent Online
HIGHER sales of cigarette-making machines in China and other developing countries helped profits before tax at Molins to rise 11 per cent to pounds 20.4m in 1993.

Peter Greenwood, managing director, said the group's tobacco machines were well suited to such markets because they were robust.

Molins - market leader in China, the world's biggest consumer of cigarettes - has also established a new joint venture in Russia.

Group sales of tobacco machinery rose 15 per cent to pounds 127.8m, with the US one of the weakest markets. Sales were hit by the price war between cigarette manufacturers and by anti-smoking programmes.

Molins' sales of packaging machinery rose 18 per cent to pounds 75.1m. Operating profits fell, however, because of heavy price discounting. The company hopes to sell more in future to the fast-growing Asia-Pacific region and to increase sales of higher-value machines.

It announced a pounds 5m contract from a consumer products group for food processing and packaging machinery, its first order in this area. Molins developed the machines under contract from this unnamed customer but plans to extend the business by acquisition.

'This contract shows we can take our manufacturing capability to a broader customer base,' Mr Greenwood said. Molins had net cash of pounds 3.5m at the end of the year compared with borrowings of pounds 14.7m 12 months earlier.

The dividend goes up from 14p to 15.4p. The shares rose 9p to 558p.