By Liz White, UT contributing editorMiddleton, UK-British Vita plc expects its 2003 sales to be higher than those for 2002, primarily due to good performance in cellular and industrial polymers.
But an accounting problem in its US non-wovens business means reported profits for 2002 and the first half of 2003 were £5 million higher than they should have been.
Vita said as a result of this irregularity, its group profit is expected to be at the lower end of market expectations, rather than at the higher end as previously forecast.
The Middleton, UK-based cellular foam, industrial polymers and non-wovens group said 20 Jan that its overall sales volumes have been at similar levels to 2002.
Signs of improvement were seen in most markets during the fourth quarter, Vita said, with raw material prices generally less volatile in the second half year.
Good performance in cellular and industrial polymers gave rise to expectations of increased operating profit over 2002, said the group.
Difficult trading conditions in nonwovens throughout 2003 lowered profit expecations in this division. Vita also commented that these profits “will be further reduced following identification of an incorrect accounting practice.”
These resulted “from the misclassification of operating costs as assets, found during an internal review of our US Nonwovens business,” Vita added.
Vita said it is aiming to improving performance in the US Nonwovens business and return it to profit.