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 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Marijuana use by teenagers does not result in a lower IQ or worse exam results, study finds
- 3 Watch what happened when food critics were unknowingly served McDonald's
- 4 Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
- 5 NHS staff banned from drinking tea or coffee on the job because it looks like they're not working hard enough
Renee Zellweger on plastic surgery: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
Kim Jong-un 'purge': Six North Korea officials missing for weeks 'may have been executed'
Diwali: What is the festival of lights – and how is it celebrated around the world?
Nathan Cirillo: Final pictures emerge of soldier moments before he was shot dead by Ottowa gunman
Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
iJobs Money & Business
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
120-150k: Accountancy Action: We are looking for an experienced CFO from a min...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...