Investment: Scapa hit by strong pound
Friday 19 June 1998
These two factors wiped more than pounds 10m from the company's pretax profit which, at pounds 61m, was almost 9 per cent below last year's level.
And there is more to come. With the overwhelming majority of its sales coming from overseas, Scapa is bracing itself for a combined pounds 5m hit on profits in the current year.
The company's response has been to attack its cost base by overhauling its three divisions and shedding some of the peripheral parts.
The restructuring is aimed at expanding high-value, high margin businesses such as tapes and filtration products through acquisitions, while at the same time trying to limit the damage in the paper products division until better times return.
So far the plan has produced a pounds 28m exceptional charge, which Scapa is confident of recouping over three years, and a 10 per cent cut in staff numbers.
The problem with Scapa's ambitions is that they are a bit too long-run for the market's liking. The shares fell 2p to 200p yesterday, reflecting investors' impatience with the company. True, the shares now trade on a measly 11 times house broker CSFB's pounds 66m profit forecast, a tempting 40 per cent discount to the market. But with trading conditions likely to remain tough for a while, Scapa's shares are only for the patient. Hold.
- 1 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 2 Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
- 3 Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
- 4 Mafia's wall of silence broken: Victim of Cosa Nostra's extortion rackets in its Corleone heartland co-operates with authorities for the first time ever
- 5 Amal Clooney gives excellent answer to fashion question at European Court of Human Rights
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
9 reasons Greece's experiment with the radical left is doomed to failure
iJobs Money & Business
£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...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...