PILKS boss Sir Nigel Rudd is claiming that the restructuring of the last three years is now having a positive impact on the St Helens-based company's profits.

And Pilkington results for the year reveal that profits (before exceptional items and taxation) are up a mighty 36%.

Chairman Sir Nigel said: "I am pleased to report a substantial improvement in operating profits in 1999/2000. In Europe in particular, the fundamental restructuring of the last three years has delivered a measurable increase in margin. This takes a real step forward on our road to regaining industry leadership.

"A year ago I described the Group as leaner and fitter and in a position for profitable growth. In 1999/2000 we have taken positive steps to deliver that growth. At the same time, we have embarked on the final phase of our Step Change Programme, in our North American businesses, at the end of which we will have transformed the Group into the leading glass company in the world".

Turnover was £2.7 billion, an increase of three per cent at constant exchange rates.

Operating profit before exceptional items, including Pilkington's share of joint ventures and associates, was £238 million, equivalent to £254 million at constant exchange rates, an increase of 19 per cent on last year. The profit before tax and exceptional items at constant exchange rates was £184 million (an increase of 36 per cent). Exchange rate movements reduced reported profit before exceptional items and taxation to £175 million (1999 - £135 million).

Earnings per share before exceptional items were increased by 40 per cent to 9.1 pence (1999 - 6.5 pence). The Board is recommending a final dividend of 3.25 pence per share, making a total for the year of five pence per share, the same as last year. Sir Nigel continued: "In the last three years we have transformed Pilkington into a simpler, more focused, more efficient and lower cost glass manufacturer. We have also streamlined the Group by concentrating on the two major business lines of building products and automotive products.

"At the end of the year we sold the largest part of our technical products business line comprising principally automotive and interior mirror operations in Europe and the United States.

"In May we announced the agreement with Nippon Sheet Glass to exchange their shareholding in certain Pilkington subsidiaries - in particular Libbey-Owens-Ford and Pilkington Automotive UK - for a share holding in Pilkington plc. As a result, Pilkington will acquire full operational and financial control of these businesses. This agreement is subject to shareholder consent and a circular will be issued to shareholders shortly. "In March we announced the last phase of the Step Change Programme designed to bring Pilkington in North America to levels of productivity and efficiency at the top of the industry. This Programme is expected to deliver cost and productivity benefits of over £80 million per annum within three years. Most of our effort will continue to be focused on cost reduction and efficiency improvement. We have been increasingly successful in identifying and exploiting further opportunities for profitable change throughout the Group's worldwide operations.

"The progress we have made so far provides us with a firm base from which to grow. There will be careful investment in new plants and processes where there is clear evidence of market growth and where our business has achieved cost competitiveness. "The growth of the European building and automotive products markets and the efficiency improvements we have achieved in our European businesses justify new investment.

"The most recent example is a combined float glass, laminating and coating plant in Northern France in a joint venture with Interpane. New investment is underway in Sweden and Germany, and we are participating in a further plant being built by Glaverbel Group in the Czech Republic. In the UK a new, environmentally friendly mirror plant is under construction in St Helens".

In the last year Pilkington have also made further investment in China, doubling shareholding in Shanghai Yaohua Pilkington Glass Co Ltd, the country's leading manufacturer of float glass and architectural products.

Sir Nigel added: "We will continue to seek opportunities to grow the business. The internet and e-commerce are fundamental elements in our growth plans. We have a comprehensive e-commerce strategy. By the end of this year we are targeting to have the ability to deal with all our customers and all our suppliers on the web. E-commerce will enable us to step over levels in the supply chain and reach new customers.

"In addition, Pilkington is making investments in businesses that use industry knowledge an goodwill to redefine markets and how they are supplied. We are a prime mover in the recently announced new venture, Mercadium, designed to sell building products through a neutral business to business internet platform".