Plastics Capital Share News (PLA)

(Adds executive comment, share price, detail.) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Niche plastics products manufacturer Plastics Capital PLC (PLA.LN) Tuesday said it will begin hiring staff for the first time in 18 months, as its order books are their strongest since then and demand remains high. The firm's best-selling product is its ball-bearing, which is used in photocopiers, printers and CCTV cameras. Demand for its products slumped 30% between the first quarter of 2008 and the first quarter of 2009 as customers reined in spending following the Lehman Bros bank collapse and the start of the global recession. This forced Plastics Capital to cut costs by squeezing its workforce, although it improved margins and moved back to profit in the 2010 fiscal year. It made a pretax profit in the year to March 31 of GBP1.8 million, compared with a GBP4.3 million loss a year earlier. The return to profit was in part driven by a foreign exchange gain on its derivatives and loans. In fiscal 2009 it paid out GBP3.5 million in foreign exchange losses. "The plan now is to start hiring again, whereas for the last 18 months we've been working on reducing headcount. We're taking people on here and there but we're going to start putting on a night shift, which we haven't had for a while, and all the indicators are that things are getting back to some sort of normality," Chairman Faisal Rahmatallah told Dow Jones Newswires. As well as taking on new staff to add to its existing 200 or so staff in the U.K. and 80 staff in Thailand, Plastics Capital also plans to invest in new machinery, stock and products. While these investments will dent profit and cash in the short term, the company expects them to significantly benefit growth and profit in the longer term. "We're not a very capital-intensive business, but we're always working on new product lines. We'll probably spend about GBP1 million on equipment over the next year, which will allow us to do things like put in one or two new lines in to certain factories," Rahmatallah said. Production is concentrated at Plastic Capital's four U.K. factories, although it also has a factory in Thailand. It has sales offices in the U.S. and Japan. About two-thirds of Plastics Capital's sales are exported to more than 70 countries worldwide including Asia and North America, with demand from Asia particularly strong. While fiscal 2010 sales fell 5% on the year to GBP26.7 million, the company's order book is its strongest for 18 months, it said. At 1334 GMT Plastics Capital's shares were trading 1 pence, or 3.3%, higher at 31 pence, outperforming a 1% fall in the Dow Jones Smaller Companies index. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; hannah.benjamin@dowjones.com (END) Dow Jones Newswires June 29, 2010 09:45 ET (13:45 GMT)