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.
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
Bomber jacket worn by Mary Berry sells out within an hour
- 1 Scottish independence results live: Reunited kingdom - Scotland gives a clear 'No' in historic referendum
- 2 Scottish referendum results: David Cameron set to unveil major devolution of powers to England
- 3 iOS 8 is full of shiny new features - but it's terrible news for app developers
- 4 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
- 5 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence results live: Reunited kingdom - Scotland gives a clear 'No' in historic referendum
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence: YouGov final prediction puts No campaign 8 points ahead - but Yes team remains optimistic
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...
Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...