It is all the more strange when the group is reduced to selling its crown jewels to keep borrowing under control. Last year, the profitable South African glass business went. Now Sola, the spectacle business that contributed more than a fifth of the pounds 46.7m trading profit in the six months to September, is for sale. The troublesome contact lens business will be kept for the time being because 'it still needs work'. In truth, there would be little chance of finding a buyer who would pay anything like the dollars 547m it cost in 1987.
Disposals or not, Pilkington's 40 per cent gearing target looks ever more distant. It will fail to achieve its aim of cash neutrality this year, despite capital spending cut to less than depreciation. Debt will rise by between pounds 50m and pounds 60m to pounds 800m, including pounds 100m of finance leases, or more than 70 per cent of net assets. Yet Roger Leverton, the new chief executive, asserts that cash flow is as important as cover in deciding dividend policy.
Cost-cutting is continuing with 4,000 jobs likely to go in the next two years. It has held cost increases at its float glass plants to 1.8 per cent over the past three years, but prices have fallen by 30 per cent over the same period. Demand may be getting better in the US and Australia, but the UK - where its market share fell by 10 percentage points when it tried to impose a price increase in the spring - is less healthy.
Over-capacity means that, when things do pick up, it will take some time to feed through to profits. Analysts are expecting profits of about pounds 35m for the full year - for a 1.4p a share loss - rising to pounds 57m, or 2p of earnings, the next. Some still expect the final dividend to be cut for the second year running; others say fear of a bid - and shareholders would put out the welcome mat for BTR now - means Sir Antony will elect to hold it. But the 3p rise in the shares to 87p yesterday, putting them on a yield of 9.2 per cent, owes more to hope than experience.
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