Investment: Poor time for Pilkington
Tuesday 29 September 1998
To be fair, this underperformance can hardly be blamed on Mr Scaroni. His plan to drag Pilkington's productivity up to the level of its main competitors by cutting 7,500 workers remains on track and should be complete by March.
One-off factors such as the strike at General Motors, which cost Pilkington pounds 7m, and interest-rate hikes in Brazil, which hurt car-buying, could hardly have been foreseen.
In profit terms, things should get better. Analysts cut their profit forecasts yesterday to about pounds 135m - in line with last year's figures. For the following year - the first with the full benefit of the cost- cutting - they expect anything from pounds 180m to pounds 200m, which puts the shares on a forward earnings multiple of just six.
However, Pilkington is operating in an intensely competitive industry which is prone to cyclical swings.
The danger is that at least some of the benefits of the latest round of cost-cutting will simply evaporate in lower prices.
Add in worries about Pilkington's debt load, which will be swelled by the redundancies, and the shares - the 8 per cent dividend yield aside - have little to commend them.
Mr Scaroni is doing as well as anyone could be expected to do under the circumstances, but for the time being investors are best off avoiding this industry altogether.
- 3 Russian girl takes her own life after parents find pornography on her computer
- 4 Ball pool for adults opens in London
- 5 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Kim Kardashian on Bruce Jenner's 'story': 'We support him no matter what, and I think when the time is right, he'll talk'
Russian girl takes her own life after parents find pornography on her computer
Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...