Charter plc Trading update
18/12/2007
Charter plc (“Charter”) is issuing the following statement in advance of its preliminary results for the 12 months ending 31 December 2007 which are due to be published on 13 March 2008.
On 12 September 2007, when Charter published its results for the six months ended 30 June 2007, the Board stated that ESAB and Howden were well placed to achieve further progress and that it viewed Charter’s prospects with confidence.
Markets remain robust and the positive trends in both of Charter’s businesses, ESAB and Howden, that were experienced during the first part of the year are continuing.
ESAB
Following the significant increases in revenue and operating profit reported in the interim results, ESAB is continuing to trade strongly in the second half of the year.
In its principal Western European markets, ESAB is continuing to see solid year-on-year growth in the demand for its products and faster growth in the other European markets, such as Russia and the other CIS states. The acquisition of Electrodi AD, Ihtiman, the market leader in welding electrodes in Bulgaria, was duly completed in October and the integration is proceeding well.
In North America, sales growth has increased in the second half of the year, and operating profit in the second half, both in local currencies and in sterling, is significantly ahead of the comparable period of 2006.
In China, ESAB’s consumables factory near Shanghai is operating close to capacity with output being sold domestically and to export markets. Work is continuing on the adjacent new standard equipment plant and the new welding consumables factory at Weihai, both of which remain on schedule for commissioning in the first half of 2008.
ESAB India, in which Charter increased its stake to 55 per cent in September, continues to trade well.
Strong growth continues in South America, enhanced by the acquisition of the Argentine welding business of Air Liquide in July 2007.
The cutting and automation business has shown a recovery from the fall in margins experienced in the first half of the year. Its order book has continued to grow and now stands at a record level.
Howden
Trading in Howden continues to be robust. For the year as a whole, the rate of sales growth is expected to be higher than the rate achieved in the first half of the year.
In addition to sales of new equipment to the power industry, aftermarket sales and the compressor business have shown notable progress.
As a consequence of the growth in sales to customers in North America and Europe, Howden’s sales will be better balanced geographically between North America, Europe, China and the rest of the world (mainly Asia, South Africa and Australia) than in 2006.
It is anticipated that Howden’s margin will be at least the level achieved in 2006.
The size of the order book at 31 December 2007 is expected to be in line with the record level at 30 June 2007; this repeats the pattern seen in 2006.
Dividend
The Board expects to recommend a final dividend in respect of 2007 which, if approved by shareholders, would be paid following the Annual General Meeting in 2008.
Thereafter, the Board is planning for Charter to pay an interim and a final dividend each year.
Outlook
The Board remains confident in respect of the outcome for 2007 and anticipates further progress in 2008.
Contact
Michael Foster, Chief Executive +44 (0) 20 7881 7800
Andrew Fenwick; Pamela Small, Brunswick +44 (0) 20 7404 5959
Internet users will be able to view this announcement, together with other information about
Charter plc at the company’s web site www.charterplc.com