Innovia bounces back with jump in earnings
PLASTICS multi-national Innovia Films, one of Cumbria’s major employers, has bounced back into profit after benefiting from cheaper raw material prices, favourable exchange rates and tight cost controls.
In the year to December, 2009, the group, based in Wigton, near Carlisle, saw pre-tax profits jump to £19.2m, up from an £18.3m loss last time. Sales at the business, which produces cellulose films used in packaging and to wrap packs of cigarettes, dipped 3% to £344.1m.
In 2008 the company’s bottom line was hit by £15.6m of finance charges mainly relating to an exchange loss on foreign currency borrowings. Last year the company recorded a foreign exchange gain of £4.3m.
Group finance director Martin Leitch told TheBusinessDesk.com: “This is a substantial improvement on the prior year. At Innovia 2008 was very much the aberration on the long-term result and it was a difficult year for many businesses.
“Last year there was a substantial increase in profit and reduction in net debt to around £205m, and 2010 is proving to be another good year.”
He said the business, which exports many of its products, has seen the benefits of a weaker pound. In addition, the cost of raw materials has fallen but clients often expect to see these savings passed on.
The company, which employs 1,370 people, also benefited from its share in profits from bank note printing firm Securency International, a joint venture with the Reserve Bank of Australia which is the subject of a Serious Fraud Office investigation into alleged corruption. Its 50% stake contributed £42.5m to group sales, up 42%, and operating profits of £5.5m, up 30%.
Innovia has said it is co-operating fully with the police and other authorities but stressed the investigation is limited to Securency. Six people have been arrested and bailed without charge including the group’s deputy chairman Bill Lowther.
Innovia was established in October 2004, following the acquisition of the films business of the UCB Group by a consortium led by Dennis Matthewman and Candover Partners.
