Vita beats forecasts

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The Independent Online
British Vita, the plastics and foams maker, has managed to offset the continuing rise in raw material prices and has comfortably beaten analysts' profit projections largely thanks to a better than expected fourth-quarter performance, writes John Shepherd.

Taxable profits for 1994 recovered from £33.7m to £49.5m, £4m to £5m above most projections. The shares, which have been unsettled over concern about chemicals producers lifting prices, rose 22p to 234p.

The City's concern about chemical producers pushing to increase profits margins was allayed by Rod Sellers, chief executive. He said: "Margin pressures are a fact of life.

"We've been successful in passing on most of the raw material price increases, while new products and technologies have helped to mitigate some of the pressures."

Group profit margins in the last quarter of 1994 were 6.3 per cent. "That gave profits that extra twitch the City hasn't been expecting," Mr Sellers said.

Analysts believe British Vita will continue to recover and make profits of at least £55m this year.

The final dividend for 1994 is 3.95p, raising the total payout from 7.4p to 7.7p.