LONDON (Alliance News) - Plastics Capital PLC Monday said it turned to a profit and increased its dividend by 10% in the last financial year after the company's acquisitions led to a substantial rise in profit.
The manufacturer of niche plastic products booked a pretax profit of GBP1.1 million in the financial year to the end of March, swinging from a small GBP148,000 loss in the previous year after revenue rose by more than 28% and its overall costs fell.
Revenue soared to GBP50.8 million from GBP39.6 million, pushing the gross profit for the year up by 21% to GBP16.9 million from GBP14.0 million and the operating profit up by 23% to GBP1.9 million from GBP1.5 million.
The company said revenue and profit both grew in the year thanks to its acquisitions, adding that proforma organic revenue growth in the year stood at 3.1% despite the headwinds created by "challenging markets".
Operating cashflow, however, was down over 37% year-on-year to GBP2.2 million from GBP3.6 million.
Earnings before interest, tax, depreciation, amortisation and exceptional items rose 12% to GBP5.9 million from GBP5.3 million.
The pretax profit before exceptional items totalled GBP4.1 million in the year compared to GBP3.7 million the year before.
As a result of the lift in earnings and profit, Plastics Capital raised its dividend for the year by 10% to 4.4 pence from the 4.0 pence paid the year before.
"We will be offering shareholders the alternative of taking their dividend in shares. We believe that some shareholders would prefer to see their dividend reinvested in the growth initiatives and acquisition opportunities that the group is busy pursuing, whilst others would prefer to receive a cash dividend as they have enjoyed in recent prior years. A scrip dividend alternative provides shareholders with this choice," said the company.
"Trading in the current year is in line with management's expectations. We have a number of exciting projects that we will be investing in as the year progresses arising from new business wins and the need for additional capacity. We believe these initiatives will help us to deliver good growth over the next few years. For the 2017 financial year, we anticipate another year of good progress," said Executive Chairman Faisal Rahmatallah.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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