Profits dip at Molins as it ‘evaluates further action’ on jobs

The cigarette and packaging machinery manufacturer Molins reported today (27 February) that it had increased its sales and reduced debt but turned in lower profits as it “continued to undertake change”. Milton Keynes-based Molins said it was taking steps to protect the group against the effects of the economic slow-down. It had been necessary to announce a number of redundancies before the year end and was “evaluating further action” in view of slowing orders and the impact of reduced volumes. Looking ahead, the company believed that given the general economic conditions for each of the markets it operates in, it expected sales to reduce in 2009, with a consequent reduction in performance mitigated by actions to reduce the cost base and improve efficiency. New chairman Jonathan Azis reported that 2008 sales increased to £91.5 million (2007: £89.3m) but as Molins continued to undertake change this increase was not reflected in the underlying operating profit which came in at £4.4 million (2007: £5.4m). The £16.2 million sale of the company’s manufacturing site in Saunderton, Buckinghamshire had helped to reduce debt to £400,000 and meant “that we are better placed to face the challenges of a low point in the capital goods cycle". The tobacco machinery division's profit in the year was lower than in the previous year, reflecting the weak value of sterling. Molins said good progress had been made in the performance of its Czech manufacturing and assembly factory, but the 20% increase in the average value of the Czech currency against sterling compared with the previous year had more than offset efficiency. Packaging Machinery The packaging machinery division's sales and operating profit were also down. The division comprises factories in Coventry and Milton Keynes in the UK and at Mississauga, Canada and Wijchen in the Netherlands. The scientific services division – which deals in smoke constituent instrumentation and analysis and has facilities in Milton Keynes and Kingston upon Thames in the UK and in Richmond, USA – managed to increase both sales and profits.