Pilkington's £50m disposal ends European restructuring

Pilkington, the glassmaker, has sold its car and interiors mirrors business to a management buyout for £50m, in a deal that wraps up the restructuring of its European business.

Paolo Scaroni, chief executive, said: "For Pilkington, this move marks a final step in the process of focusing the group's European operations on its core competencies of building and automotive glass."

The businesses that have been sold make car and interior mirrors in Germany and the US. The disposal also included an architectural glass processing unit in Germany that makes toughened glass.

Mr Scaroni said the company had decided three years ago to focus on its "float", or flat glass sheets, business

Pilkington, which saw its shares close up 2p at 71p, also provided a trading update for the year ended 31 March. It said that it would report improved results, showing, for the first time in three years, an increase in turnover from continuing operations. However, the company revealed that most of the profits this year would be wiped out by exceptional restructuring charges.

The cost of the Pilkington's efficiency, or "step change", programme will be £110m, which will be charged against the current year. Last year, the company reported pre-tax profits of £135m, before exceptionals, and analysts expect the company to report pre-tax profits of around £160m for the year ended 31 March. The results will be announced on 1 June.

The £110m costs are made up of £68m from North American changes and the last of the exceptional charges resulting from European restructuring.

Part of the costs come from 9,000 job losses, up from 7,500 when the plan to restructure the group was announced three years ago.

Mr Scaroni, who was appointed in 1997, said that, with European restructuring now complete and US restructuring now under way, "I can, for the first time, see a situation where Pilkington can be as competitive as the best in every part of the world. For the first time for many years, we are performing better than our competitors."