PILKS' Chairman Sir Nigel Rudd has given an update on the St Helens-based company's progress and upcoming prospects including news that construction of their Russian factory is under way.

He said: "As I reported at the time of our Annual Results in May, the continuing focus on cost reduction enabled Pilkington to report substantially maintained profits despite continuing challenging conditions in some of our largest markets.

"Efficiency improvements achieved over the past few years enabled Pilkington to generate its highest ever net cash inflow. The Group's borrowings were reduced by nearly one quarter over the year, producing the lowest level of Group borrowing recorded since 1997."

He went on to say that Pilkington is implementing a clear three-stage strategy - 'Cash for Growth'.

"The stages are first, improve the operational fitness of the businesses, second, produce net free cash from operations - initially to reduce debt - and third, invest surplus cash in future profitable growth.

"Good progress has been made in meeting the objectives we set out for stages one and two. Planning is well underway on stage three, and, with Pilkington already established in key emerging markets, we would expect to move on to stage three during 2005."

Russia

Pilkington's new float plant in Russia is under construction and due to come on stream next year. Consolidation of our Automotive plants in China is underway and the fourth float plant in Brazil is now in production.

Most continental European markets are showing signs of modest improvement in building products, though price levels are still below the average for last year.

In North America, the economic indicators are improving, while the South American and Australasian businesses continue to perform well. Sir Nigel added that efficiency and productivity levels continue to improve across all businesses.

But in Automotive Glass Replacement, slower demand and price pressures in Europe and North America have hit results in the first quarter, though there are indications that prices are stabilising in North America.

He concluded: "Overall, business conditions are in line with those indicated at the time of the announcement of the Group's preliminary results in May".