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Introduction |
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Financial highlights |
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Routes to market |
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Chairman’s statement |
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Chief executive’s review |
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Operating review |
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Finance director’s review |
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Directors |
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For a printer friendly version of this Annual Report website plus PDFs of the rest of the document please visit the PDF download section . |
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| Building materials | 2000 | 1999 | % increase |
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| Turnover (£m) | 226.8 | 175.8 | 29 |
| Operating profit (£m) | 38.7 | 20.5 | 89 |
| Margin (%) | 17.1 | 11.7 | |
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Regional turnover increased by 29% and profits almost doubled largely as a result of exceptional trading conditions in North America. Underlying economic fundamentals were strong in both the USA and Canada, as demand for plasterboard outstripped local capacity in the USA and product was sourced from overseas. Against this background our plants in Canada worked at full capacity and were supported by European exports to deliver an 11% volume increase on what was a strong performance in the previous year. The oversold position resulted in a 20% increase in selling prices. Towards the end of the 1999 calendar year, new US capacity came on-stream and a winter seasonal downturn in demand led to a cessation of our supplies from Europe. The last quarter of the financial year saw North America again self-sufficient with a return to more normal trading conditions in which prices have started to ease. The outlook is for continued strong demand for plasterboard in North America but the introduction of further new capacity in the summer of 2000 will prevent a repeat of the abnormally buoyant conditions of 1999.
In South Africa plasterboard volumes were hit by high interest rates in the first half but recovered to finish marginally down as rates fell in the second half year and construction activity recovered. Access floor panels made by Donn Products are exported worldwide, and a number of high profile European contracts were completed in the year. A strong cost performance underpinned a 30% regional profit improvement.
The developing Brazilian plasterboard market is starting to exhibit strong growth characteristics and, despite economic recession at the beginning of the year, group volumes almost doubled. The completion of the São Paulo plasterboard plant substantially reduced our local operating cost base, with the result that our operation is now moving into profit. The use of plasterboard technology is being expanded beyond São Paulo and Rio de Janeiro and product is also being exported to Uruguay and Paraguay. The product range is being progressively expanded, with narrower width board and Gyprex tiles gaining acceptance in the ceilings market.
Argentina felt the backlash of Brazil’s currency devaluation, followed by a period of austerity imposed by the incoming government which resulted in a 4% drop in construction activity. However, strong product promotion helped plasterboard volumes to increase by over 10%.
After a disappointing first half, profits improved for our Chilean associate as a result of increased domestic volumes and exports of plasterboard to the USA.
China has a plasterboard market estimated at almost 100 million square metres per annum and, with double-digit growth, affords considerable long term potential. Our factory in Shanghai was commissioned towards the end of 1999 and trading has now commenced, with the BPB brand launched and routes to market being developed. Pricing in this market is, however, extremely competitive.
Following the acquisition of majority control of Thai Gypsum Products last December, good progress is being made in Thailand with both marketing and production benefiting from BPB knowledge transfer. Early trading indications are encouraging.
Sales volume growth in India accelerated in the second half, as business confidence improved following the change in government, but full year profitability was lower as a result of market development costs and the commissioning of the new plasterboard plant at Chennai.
Iberyeso’s annual sales of projection plasters have grown to around 500,000 tonnes, with penetration against traditional plasters supported by the training of large numbers of applicators. Iberyeso’s team of regional advisers includes: Justo Garcia Sànchez, silo technician (left), Angèlica Gonzalo, quality controller (middle) and Enrique Sànchez-Vizcaino, technical salesman.
Operating profit per employee £000s
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