Burmah Castrol PLC
1 December 1999
TRADING UPDATE
As stated in its Interim Announcement on 8 September 1999,
Burmah Castrol plc intends to publish an annual trading
update, on a regular basis, approximately two months ahead
of its full year announcement.
Overview
Tim Stevenson, Chief Executive, comments:
'We have continued to make strong progress throughout the
second half of 1999, building on the powerful start we made
to the year. The trading outlook remains good, particularly
in Asia Pacific. We are actively implementing our plans to
drive the top line, for example through partnership deals
such as that with BMW, whilst significantly reducing costs,
the benefits of which will start to be seen in 2000.'
Business Results
Castrol Consumer has continued to perform strongly and to
grow market share; volumes to end October were some three
per cent ahead of last year. Margins have been maintained
at a high level despite increasing advertising, marketing
and technology investment. Where raw material costs are
rising, Castrol Consumer is confident that these will be
passed on. The strong recovery in Asia Pacific has been
maintained and North America has had an excellent second
half. Europe is making good progress despite strong
competition.
Castrol Industrial has continued to experience difficult
market conditions in Europe and North America, but East Asia
and India are growing strongly. Margin improvement
programmes in Europe and North America are well under way,
and new CMS contracts continue to be won which will underpin
growth in future years.
Foseco Foundry has maintained its margins despite difficult
conditions in the steel foundry segments in Europe and North
America, and there are some signs that these markets are
improving. Asia Pacific is finishing the year on a strong
note.
Construction has had an excellent year, with a strong
recovery in Asia Pacific and a strengthening European
performance.
Printing continues to achieve excellent margins despite the
strength of sterling and the absence of a significant
improvement in the key graphics segment. There is some
improvement, however, in the US and mainland European
industrial printing markets.
Burmah Castrol's other businesses are performing up to
expectations except for Ceramic Welding, which remains in
loss.
Y2K
The Board has regularly reviewed the Group's progress on
addressing the Year 2000 problem, and all units world-wide
have now achieved 'Year 2000' readiness. Year 2000
programmes
have addressed business systems as well as processes related
to business partners. Detailed 'Rollover' plans are being
implemented to ensure a successful transition and
contingency plans are in place to ensure the company
continues to be as fully protected as possible against any
problems that might arise.
Strategic Developments
Some £59 million has been invested to date this year in
acquisitions, whilst disposals have raised around £37
million.
Burmah Castrol is pursuing further opportunities to invest
in its core businesses, penetrate new markets and dispose of
businesses to which further value cannot be added.
For further information, please contact:
James Alexander, Corporate Affairs Director, 01793 452006
Burmah Castrol plc
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