BPB lures buyers despite profits dive

INVESTORS shrugged off a 35% dive in first-half profits at BPB, buying into the stock on hopes the plasterboard company may be over the worst.

Underlying pre-tax profits fell to £71.8m for the six months ended September, from £111.2m a year earlier - a result in line with company and market forecasts.

But BPB said the performance was far stronger than in the preceding six months, with signs of recovery in the US market. Margins across Europe had recovered despite low sales in Germany and a buoyant housing sector in the US had strengthened the wallboard market.

BPB chief executive Richard Cousins said the events of 11 September meant the outlook for the remainder of the year was 'less predictable'. But he added the improving trends seen in the first half 'have continued to benefit' BPB's businesses since the atrocities in New York and Washington. Investors welcomed the news and BPB's shares climbed more than 10%, or 27p to 288p, their highest since March.

Sales for the six months climbed 8% to £830.7m following acquisitions last year in Europe and North America. BPB bought US asbestos-free maker Celotex in July last year but despite its contribution the American arm made an interim loss of £16.7m.

Selling prices were 50% down and the group also bore costs of plant closures and job cuts in line with plans to save $50m (£33m) a year. But three prices had helped the US business make a profit in September.

Profits in Europe fell by 8% but that was up 24% on the previous six months when BPB was hit by inflation and bad weather. Building in the UK slowed as housing starts declined by 3% but the renovation market 'remained buoyant'. Operations in Central and Eastern Europe moved back into profit.