Filtrona boosted by 'DNA for packaging' licence deal

The plastics and fibre products company Filtrona, which was spun off from Bunzl last year, announced its first licence agreement for a new track-and-trace technology yesterday. It also unveiled a jump in half-year profits, sending its shares up 10 per cent before closing 9p higher at 278p, up 3.4 per cent.

Filtrona's chief executive, Mark Harper, said the new FractureCode security printing technology would make a "meaningful" contribution to profits by 2009, estimating it at 5 per cent. It is a "packed DNA" type code that can be printed on any packaging and provides individual identification, giving companies better control of inventory levels and the ability to track their products easily. Filtrona said it had struck a three-and-a-half-year licence deal with an international consumer goods company whose name it did not reveal.

The news came as Filtrona reported a 9.9 per cent rise in first-half profits before tax to £28.9m, with sales 12 per cent better at £283m.

The group is now supplying the laminates for all UK passports and completed an acquisition earlier in the year to supply identity cards for Corgi-registered gas engineers, which will benefit its figures in the first half of next year.

While Mr Harper expects the underlying strength of the business to come through in the second half and next year, the group highlighted negative effects from the weaker US dollar and higher interest rates. It also needs to reassess its portfolio of assets after one of its main tobacco customers announced it would move some manufacturing out of North America into other parts of the world. "We're not signalling a great restructuring charge, but there will be some drag on growth next year," Mr Harper admitted.

The Plastic Technologies unit contributed £22m of operating profits, up 19 per cent, while profits at the Fibre Technologies division remained level at £14m.