THE costs of sweeping cutbacks, redundancies and closures which Pilkington Group chief executive Paolo Scaroni was brought in to push through a year ago, have been much higher than earlier forecast.

These 'exceptional items' costing £225 million have wiped out profits of £125 million, leaving a loss of £100 million for the year.

And that looks likely to lead to substantially more job cuts than originally planned. A further 1,500 Pilks staff now look like being made redundant, on top of earlier predictions, adding up to some 7,500 total losses.

In his annual statement, Pilks' chairman Sir Nigel Rudd says: "We promised to bring about change at a faster pace in order to restore the company to acceptable levels of profitability.

"The costs of these actions are substantial and the pace of change has been rapid. The total net charge to the profit and loss account for redundancy costs, business disposals and closures, contract losses, asset write-downs and restructuring was £225 million. This is higher than first indicated."

What that means in terms of profit for Pilks is that the profit before exceptional items and taxation of £125 million is turned into a £100 million loss.

He continued: "We have completed the reorganisation of the group into worldwide business lines. We are refocusing the European building products business on primary float glass manufacture and on secondary processing where we have competitive advantage or strong market share.

"A total of 70 processing and distribution outlets will be closed, sold or merged by the end of December 1998, including half those in the United Kingdom and most of those in Germany. Employees in this part of our business will be reduced by over 3,600, losses of £30 million a year will be eliminated and overhead costs will be reduced.

"Our short term target is is to reduce manufacturing costs and improve yields and productivity to achieve savings of £60 million a year."

Elsewhere in the report, Sir Nigel highlights the growth of Pilkington's technical products which saw an increase of profits of 78 per cent including an advance in aerospace, which grew by 13 per cent.

Following the announcement of the losses a spokesman for Pilkington in St Helens, said: "At the moment there are no further plans for redundancies in the St Helens area, although we are always looking at efficiences.

"We can't rule out any further redundancies, but there are no imminent job losses, other than the 160 already scheduled for this financial year."

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.