Technical Coated Fabrics Division

Our Technical Coated Fabrics division, essentially consisting of Mehler Texnologies, supplies products such as side curtains for lorry trailers, advertising banners, tensioned structures, awnings, marquees and tarpaulins to the print, architectural and transport markets.

2011

2010

Revenue

£119.4m

£105.4m

Operating profit*

£10.7m

£9.7m

Operating margin*

9.0%

9.2%

* Before amortisation and non-recurring items.

Sales increased by 13% in the year and were not materially affected by changes in exchange rates. Volumes were 7% higher than 2010, but were flat during the second half as the business focused on increasing margins. Margins improved in the second half but were 20bps lower at 9.0% for the full year as the division was slower to recover the full extent of raw material cost increases from its customers. The division also reinvested part of its margin growth in enhancing organisational capability to accelerate progress on growth and efficiency initiatives.

During the first half of the year sales in the trailer market continued to recover well, however in the second half progress slowed. Our permanent and semi-permanent architectural membranes for building applications grew strongly in both heartland and emerging markets. In Europe important reference projects were secured and this was augmented by a continuation of the impressive development of sales in the Middle East. The industrial segment also performed well with good growth in mining and tunnelling applications. Sales in both the leisure and print segments were subdued. Strong growth with new leisure ranges in Eastern Europe was outweighed by a weaker Italian market where ‘bottom-slicing’ of unattractive business also contributed. Increased Asian competition in the lower end of the print market restricted growth in Europe, with improvements in the USA compensating.

Divisional sales outside of the heartland grew by 17% with good progress in Eastern Europe and the Middle East. The proportion of non-heartland sales increased to 25.3% (2010: 24.5%) and there was an improved contribution from recently developed products which this year amounted to 16.4% (2010: 14.6%) of total sales. New products in the boat and leisure markets and improved architectural membranes contributed. A large proportion of our development activities are focused on the architectural membrane markets with projects to extend the lifespan, functionality and recyclability of these products being important drivers of future growth.

The division has also made significant improvements in the management of health and safety and delivered a much improved performance this year. Progress has also been made in improving operating efficiencies and the division has a number of ongoing projects which can accelerate this progress. In addition there are benefits to come from projects which are focused on improving sales margin management and customer service levels. These ‘self help’ projects will be the important drivers of short-term value creation for the division.

Resilience

Mehler fabrics installed in Spaceport dome

Resilience

The Operations Centre at Spaceport America, New Mexico, the world’s first private space port, incorporates Mehler Texnologies’ VALMEX ® FR 1400 MEHATOP within the roof of its 100m-diameter dome. Mehler’s weather-proof and impermeable architectural membrane acts as the roof mould and substrate, protecting the reinforcement bars below and providing a stiffened surface to support the exterior concrete layer.

Revenue

£119.4m
(2010: £105.4m)

Operating profit*

£10.7m
(2010: £9.7m)

Operating margin*

9.0%
(2010: 9.2%)

Designed and developed by Emperor Design