LONDON (Alliance News) - Plastics Capital PLC, a manufacturer of niche plastics products, on Monday said it should trade in line with expectations for the rest of the financial year, after reporting higher pretax profit in the first half.
Pretax profit increased to GBP761,000 in the six months ended September 30, from GBP526,000 the corresponding half the prior year, aided by a fall in net financing costs to GBP70,000 from GBP568,000. Earnings before interest, tax, depreciation and amortisation rose to GBP2.5 million from GBP2.2 million. The company lifted its interim dividend to 1.46 pence from 1.33p.
Revenue was up by about half at GBP24.5 million, driven by the company's high strength film packaging activities following the acquisition of Flexipol for up to GBP10.6 million in November 2014.
The costs of administration and distribution were up 47% to GBP5.4 million and 22% to GBP1.3 million, meaning that operating profit fell to GBP831,000 from GBP1.1 million. There were GBP222,000 of so-called exceptional costs within administration expenses, mainly relating to redundancy and recruitment, but also to acquisitions and legal bills.
"I am pleased to report excellent progress in our films and bearings businesses, where sales and profit growth has been good. Order books in these business areas are strong and we anticipate a significantly improved performance in the second half year, which we believe will be further assisted by improving foreign exchange hedge rates and raw material prices," Executive Chairman Faisal Rahmatallah said in a statement.
Plastics Capital could make further acquisitions, according to Rahmatallah, who said that several "good opportunities" arose in the last three to six months.
"We remain enthusiastic to add businesses that are complementary to our existing ones, and meet our other criteria in terms of size, profitability and cash flow. We are hopeful that we can bring one or more to fruition over the next 12 months," the executive chairman said.
Shares in Plastics Capital were down 1.4% at 106.00 pence on Monday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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