LONDON (Alliance News) - Plastics Capital PLC Tuesday said it made a loss in its recently-ended financial year as it booked costs related to its purchase of Flexipol, but said the acquisition is contributing significantly to revenue growth.
The niche plastic products company said that it made a pretax loss of GBP148,000 in the year to March 31, having made a GBP1 million pretax profit the year before, even though revenue grew 22% to GBP39.6 million from GBP32.5 million.
Revenue growth was driven by the acquisitions of packaging manufacturer Flexipol in November and Chinese manufacturer of creasing matrix Shengli the year before, Plastics Capital said. However, costs associated with the purchase of Flexipol, including GBP1 million incurred in capital raising, preparing and agreeing contracts, deal origination and due diligence, meant the company took a hit to its profit.
Plastics Capital said it will pay a total dividend for the year of 4.0 pence, up 1.0p from that paid the year before.
"Trading in the current year is in line with management's expectations and we anticipate that turnover will improve throughout the year as projects that have already been won convert into sales and we take advantage of synergies and growth opportunities at Flexipol," Chairman Faisal Rahmatallah said in a statement.
"Compared to the prior year, trading is weaker in the packaging division but stronger in the industrial division where the operational gearing is greater. The pipeline of new business remains strong and we are aware that converting it into sales is key to performance this year. Although we are optimistic about this, we have to recognise that the outlook for new business wins is always uncertain. In contrast, customer retention remains very good and underpins the long term value of the group," he added.
Shares in Plastics Capital were trading down 4.0% at 97.00 pence Tuesday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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