The Investment Column: BPB in good shape as concerns over Brussels inquiry recede

DAVID LEONARD, chief executive at BPB, is enjoying his unexpected tenure at the helm of the world's largest producer of gypsum products.

Deferring his retirement for a year, he took on the role in February when his predecessor, Jean-Pierre Cuny, stepped aside after the European Commission launched a probe into alleged price-fixing.

Once in the hot seat, Mr Leonard reinvigorated the plasterboard group while pruning costs. Investors have responded, pushing BPB shares from less than 200p at the start of the year to almost twice that.

BPB looked in good shape yesterday, with half-year profits up by 27 per cent to pounds 114m, before exceptionals. Margins rose a chunky three points to 16.3 per cent.

The good fortune stems from a benign combination of lower costs, a pick- up in European volumes and stronger prices and volumes from North American operations. Analysts applaud a headcount reduction of 5 per cent - a central feature of a drive to remove pounds 20m a year from the cost base - although a cynic might wonder why such action eluded Mr Leonard when he was chief operating officer.

BPB's core businesses are doing well, with like-for-like global plasterboard sales up by 13 per cent in the half. European sales, which account for 80 per cent of group activity, gained in most regions of the Continent, although prices were steady to marginally lower. In the rest of the world, turnover gained by one-third and operating profit by 130 per cent, with factories in Canada working flat out.

The outlook for the second half is less positive, although far from gloomy. Margins in North America will slip as new capacity comes on stream, while European prices appear solid enough. The wild card of the EC investigation remains, but analysts do not envisage more than a slap on the wrist, at worst.

Analysts foresee full-year earnings of pounds 220m, putting the shares - down 11.75p yesterday to 345p - on a forward price/earnings multiple of less than 12. Mr Leonard, who will step down in 2000, has done well and investors could see the shares move closer towards the 400p mark.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence