Pilkington’s Tiles on recovery path after tough 2009

SALFORD-based Pilkington’s Tiles has returned to break even on eight months of trading, after posting full year losses of almost £3m in 2009.

The company, which employs around 380 staff and manufactures ceramic tiles, said 2008/09 had been its “most difficult trading year for some considerable time”.

Turnover fell 7% to £39m for the full year to the end of March 2009 (2008: £42m), while it’s pre-tax loss hit £2.9m (2008: £592,000 pre-tax profit).

Sales in the core ceramics division fell 3.8% to £31.1m, with a reduction in house builder activity having a significant impact.

“The effective collapse of the trade credit insurance market in the second half of 2008 had an enormous impact on the ceramics division, in particular, due to the sector that the company operates in,” the company said in the directors’ report.

It had been particularly affected by the value of sterling against the euro and dollar, with a large proportion of purchases made across these two currencies, along with increases in gas and electrical prices.

“These two factors coupled with the group’s strategic decision to reduce stocks during the year have resulted in a set of financial circumstances which have been very difficult to mitigate in the short term,” it added.

However, the company has improved its financial position since the year end, and took the unusual step of posting unaudited accounts for trading in 2009/10 to prove this point.

The unaudited interims show a small pre-tax profit of £3,000 has been clawed back in the eight months to November 2009. Turnover stood at £26.4m.

Net debt increased during the 2009 financial year to £8.3m from £6.8m.

This includes a £1m loan the company’s former chairman and majority shareholder Kevin Whiteley put into the business with no interest charges. Mr Whitely died in September 2009, aged 68.