Plastics Capital jumps on figures

Shares in AIM-quoted Plastics Capital jumped by one-fifth after the niche plastic products manufacturer reported a higher profit and a fall in borrowings. Revenues rose £12.9m to £16.3m in the six months to September 2010. Gross margins were slightly lower because the company is passing on higher plastics prices. Overheads did not rise as fast as revenues. Stripping out amortisation, forex movements and restructuring charges, the underlying profit improved from £936,000 to £1.75m on a constant currency basis. All of the core businesses put in an improved performance. The largest percentage improvement in revenues came from the hose mandrel business. Capacity has been expanded. The power transmission division, which includes bearings and hose mandrel operations, returned to profit. The Thai factory is producing 50% of the company's bearings and it is servicing customers on the west coast of the US. The factory has gained its first customer in Thailand. Plastics Capital is likely to invest further in the factory. Plastics Capital has set up offices in India and China but has yet to see the benefits from this investment. Net debt was £14.3m at the end of September 2010. In October, Plastics Capital sold and leased back its property in Dunstable for £1.3m, which is above book value.