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Financial Review These interim results reflect consistent performance over the last 18 months with good profitability and strong cash flow. Disappointingly, there has been no revenue growth as the slowdown in Europe has counteracted new business gains made right across the Group. Compared to the same period last year, on an underlying basis the Group has: · Increased earnings per share from 5.3p to 5.5p; · Reduced net debt by £2.6m to £8.6m; · Seen a reduction in sales from £16.3m to £15.7m; and · Seen profit before tax reduce from £2.0m to £1.8m. Sales have reduced compared to the same period last year specifically due to weak European demand in our Industrial Products division, where sales were down 30%. In addition, we have experienced lower average prices for certain commodity raw materials and have passed these through in lower sales prices to customers. Ignoring lower sales in mainland Europe and the impact of lower raw material prices, sales were up by 7% as new business wins more than made up for slack demand. Operating profit margin has reduced to 12% from the 14% achieved in H1 11-12. There are two reasons for this - firstly, a worse US dollar/sterling exchange rate in H1 12-13 than H1 11-12 has prevailed, and secondly, we realised a high proportion of revenue from engineering services associated with recently won new projects - this type of revenue is generally at a lower margin than product sales. However, a high level of engineering services revenue also indicates a strong pipeline of product sales to flow through in the future.
Commenting on these results, Faisal Rahmatallah, Executive Chairman, said: "Over the first half of the financial year, we have improved earnings per share, announced a doubling of the interim dividend and reduced net debt by another £2.6m. Ignoring mainland Europe, where sales are down due to the recession there, the Group continues to perform well and new business wins continue. The Board expects the Company trade broadly in line with expectations for the rest of the financial year."
Operational highlights · Improving earnings per share - 4% up on H1 11-12, 15% up on H2 11-12 · 7% year-on-year revenue growth outside Europe - overall revenues marginally down · New business wins continue - seven new key accounts won during first half year · Significant technical breakthroughs on key product development projects · Major investment approved for new high strength industrial films
First Columbus initiated coverage of Plastics Capital (PLA) with a "buy" recommendation and 90p target price. The broker believes that the plastic and rubber products manufacturer is set to benefit from a long period of investment, including acquisitions and management upgrades. First Columbus feels that the company is unique in the sector due to its strategy of focusing on niche, high margin markets rather than the more typical low-cost high volume model of most plastics companies. On the broker's forecasts, the shares trade on a prospective earnings multiple of 6.1 times for the 2013 financial year, falling to 5.6 times in 2014. The shares slipped by 0.5p to 65p
Commenting, Faisal Rahmatallah, Executive Chairman, said: "The success we are having on new business is enabling us to maintain sales in an environment where demand for industrial goods is weak. We are hopeful that this demand will improve during the next twelve months. Meanwhile, we are confident that our new business initiatives will continue to generate strong results."
Trading Update Plastics Capital plc (AIM: PLA), the niche plastics products group, announces an update on trading for the financial year to date and is pleased to confirm that the Company continues to trade broadly in line with market expectations. Since the beginning of the financial year eight new key accounts have been added. This, together with new projects secured from existing customers, has the potential to deliver more than £2.0m of additional annual turnover over the coming two to three years. Notable key account successes include new hydraulic hose manufacturers in Mexico and the United States of America within the mandrel business and a new distributor for creasing matrix in Indonesia. For the year to date, the total contribution from new business has offset lower sales to existing customers, particularly in the Industrial division, which mainly serves the capital goods markets. Looking forward, whilst there is little evidence to suggest demand from existing customers will alter in the near term, the Company believes that further new business already in in the pipeline will contribute meaningfully during the second half of the current financial year.
http://www.investegate.co.uk/Article.aspx?id=201209100700068331L
Commenting, Faisal Rahmatallah, Executive Chairman, said: "Our OEM customers are continuing to invest in new products and product enhancements despite the poor macroeconomic backdrop, so generating additional demand for the specialist bearing assemblies that we design and manufacture."
Contract wins Plastics Capital plc (AIM: PLA), the niche plastics products group, announces new contract wins worth approximately £0.5m on an annualised basis. Two design projects for plastic ball bearing assemblies have been successfully converted into orders. The first is for a leading US security camera manufacturer and the other is for an Israeli manufacturer of swimming pool equipment. It is expected that these projects will deliver incremental annualised sales of approximately £0.25m. In addition, an important project for a major Korean manufacturer of security cameras is being accelerated for launch by the end of this calendar year and should contribute approximately £0.25m of sales on an annualised basis.
http://www.investegate.co.uk/Article.aspx?id=201208060700063269J
......................... Evaluation and forecasts As mentioned above, we expect to see the £5.4 million of new business that has been won but has not flowed through to revenue to be recorded gradually over the next three years. We also anticipate revenues increases being spread across all divisions more equally. Consequently, we continue to forecast an adjusted pre-tax profit of £4.1 million on sales of £33 million for FY2013. Adjusted EBITDA is forecasted to come in at £5.4 million, while net debt should decrease further to around £7.8 million. We believe that a 2013 EV/EBITDA multiple of 7 times is appropriate to value the shares given the solid performance reported for the full-year just gone, the cash-generative nature of the operations and the steadily falling level of borrowings. According, we have increased our target price to 109p and maintained our buy recommendation.
27th June 2012 Analyst: Emanuil Manos Halicioglu Email: Emanuil.halicioglu@gecr.co.uk Tel: 020 7562 3368 Plastics Capital - Full-year results in-line with expectations. Buy, with a 109p target price
Outlook Trading for Q1 FY2013 is in line with management's expectations. There are some signs that demand in the Packaging division is improving, although demand in the Industrial Products division remains inconsistent. Management's expectations are that demand will gradually improve over FY2013, driven largely by new business already won and our initiatives to introduce new products and to win customers. FY2013 will be a year where we focus on the conversion of business that is already in the pipeline and on full penetration of accounts where we have already created a platform. Specific objectives are as follows: · Key account conversion - our objective will be to add another 20 potential key accounts over the financial year and to develop our existing key accounts further. · Geographic expansion - the key focus will be on China where we will add sales and customer service resources for bearings, matrix and mandrels. Other exciting developing markets will be targeted and we have some good opportunities in Brazil, Mexico, Poland and India. · New products- these will include a value brand of creasing matrix targeted at smaller end-users in developing markets, an improved pressboard matrix for sophisticated end users, thinner and narrower film packaging products, new mandrels materials tailored to customers hose-making requirements and various new plastic ball bearing solutions for new applications such as automotive interiors and camera lens mechanisms. · Capital investment - to support new product development and to provide for additional production capacity to support growing revenues.
Commenting on these results, Faisal Rahmatallah, Executive Chairman, said: "Good new business generation, excellent cash flow and lower interest costs have left revenues and profits broadly unchanged on the prior record year, despite the recessionary environment and the negative revenue impact felt from the Japanese Tsunami and Thai floods. Meanwhile, we have continued to invest for future growth, particularly in overseas markets. "Our focus on business development and technical innovation should continue to provide good growth for the Group in the medium term. Despite the current economic uncertainties, the Board believes the Group should be able to make good progress over the next year."
Plastics Capital, which owns a portfolio of small companies making niche plastic products has revealed falling profits and revenues and announced the departure of a founder shareholder from the board. The firm has four main subsidiaries: Bell Plastics; BNL; C&T Matrix; and Palagan. In the 12 months to the end of March, revenues fell 4% to £32m while profit before tax dropped 3% on the prior year to £3.765m. Unfortunately for the firm, which employs over 300 people, the stock price had fallen 17% by 10:42, indicating the market was troubled by something more than a relatively mild drop in revenue. Plastics Capital argues it has done well to keep the turnover reduction as low as 4%, with its factory in Thailand hit by floods, and the Japanese tsunami reducing demand in a key market.
25th April 2012 Analyst: Steven Moore Email: steven.moore@gecr.co.uk Tel: 0207 562 3370 Plastics Capital – “In-line” Year-end Trading Update. Reiterate ‘Buy’ at 72.5p. Target Price increased from 100p to 110p
Plastics Capital, a niche platics products group, has said it expects its result for the full year to 31 March 2012 will be in line with market expectations, despite sales continuing to be affected by the aftermath of the Thai floods. The firm said profit margins have remained good, cash flow has been strong and its debt continues to reduce in line with expectations. The company was also keen to emphasise strong progress in both the US and China, and said its packaging division has seen an 'encouraging' conclusion to the financial year with fourth quarter sales being the strongest of the financial year.
Commenting, Faisal Rahmatallah, Executive Chairman, said: "The Japanese tsunami, Thai floods and the Eurozone crisis have made the 2011-12 financial year a challenging one. Despite this our business has continued to generate very good profits and cash flow. New business, particularly in international markets, is in the pipeline and this should underpin solid growth over the next financial year."
Trading Update Plastics Capital (AIM: PLA), the niche plastics products group, is pleased to announce that it expects performance for the full year to 31 March 2012 be in line with market expectations. Sales concluded the year satisfactorily although still affected by the aftermath of the Thai floods. Profit margins have remained good, cash flow has been strong and debt continues to reduce in line with expectations. We can report some important developments in our mandrel business, which has converted its first customer in the USA, currently the world's most significant market, and has also received its first production trial orders in China, which is likely to become the world's most significant market in the future. These developments underline the ability of this highly technical business to penetrate new markets with high potential for future growth. Our packaging division has seen an encouraging conclusion to the financial year with Q4 sales being the strongest of the financial year. This reflects some stabilisation of economic conditions as well as a conclusion to the unwinding of stock that had built up with customers over the previous 12 months.
http://www.investegate.co.uk/Article.aspx?id=201204250700169966B
SP certainly has potential to perform this year - good contracts here and as they state many are new customers which is excellent hews for accumulative business
Faisal Rahmatallah, Executive Chairman of Plastics Capital, commented: "Our plastic ball bearings business has rewarded the investment we have made in business development activities over the last 2 years. New projects are coming through and will translate into revenue growth once tooling is complete and production orders start. I am confident that we will see further significant success in this area over the next 12 months too."
New Contract Wins for Bearings Division Plastics Capital plc (AIM: PLA) the niche plastics products manufacturer, is pleased to announce an excellent financial year for new contract wins within its plastic ball bearings division ("BNL"), which is its largest division by revenue, in conjunction with the existing business performing in-line with management expectations. We are pleased to announce that during the current financial year we have secured 18 new contracts worth a total incremental annual sales value exceeding £2.3m, which represents a 10% increase on the corresponding period last year. Of these new contracts, 30% is being delivered by seven new customers, so enlarging our customer base and providing opportunities for further contract wins with the same customers in the future; these successes reinforce our growth strategy. In addition, we have recently secured our first project win for another local Chinese customer, the substantial textiles machinery manufacturer, Jen Haur Company Ltd. This is further evidence of the encouraging start made by the Group's recently established Shanghai sales office. Furthermore, the new projects pipeline for the bearings business has grown stronger with a particularly high number of excellent opportunities emerging within the automotive sector. The growth in the projects pipeline is being driven by customers becoming increasingly sensitive to the advantages associated with high specification plastic ball bearings as made by BNL; specifically issues like weight, design flexibility and cost.
http://www.investegate.co.uk/Article.aspx?id=201204020700155194A