LONDON (Alliance News) - Plastics Capital PLC Monday said it is trading in line with market expectations, with operating profit margins benefitting from lower raw material prices and from cost cutting programmes in its bearings business.
In a third-quarter update, the plastics company said that revenue has shown a "significant improvement" on what was achieved in each of the last two quarters. Demand for bearings is recovering from a poor first half, the company said, while specialty industrial films are trading in line with the first half. Creasing matrix is maintaining its "steady growth" over the period.
Operating profit and cash generation have improved over the first half of the financial year, the company added.
"Trading conditions remain somewhat variable reflecting global economic conditions, but I am pleased to say that, as a group, we continue to make steady progress," Executive Chairman Faisal Rahmatallah said in a statement.
Plastics Capital also said that Flexipol, which was acquired last November, is performing ahead of expectations, noting "progress" on identifying and investigating cost synergies with Palagan.
The initial view on how the synergies will pan out is "ahead of management's expectations" prior to completion of the acquisition. The company also said it has started to test the commercial property market for the potential sale and leaseback of Flexipol's property in Haslingden, Lancashire, UK.
"Our recent acquisition, Flexipol, is performing well and we see exciting further possibilities in this area. Overall, we anticipate that performance over the second half of the financial year will be broadly in line with market expectations," Rahmatallah said.
Plastics Capital shares were down 0.5% at 101.00 pence on Monday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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