Tom Winnifrith7 Dec 2014 23:48
TW has today written the following:
Plastics Capital (LSE:PLA) has announced results for its half year ended 30th September 2014 and that the board “expects the group to continue to trade in line with expectations for the rest of the financial year”
The results show an adjusted pre-tax profit of £1.55 million on revenue just over 1% higher than in the corresponding 2013 period, at £16.53 million, generating earnings per share of 4.6p, down from 5.4p. This reflected Packaging division growth from new product introductions and recent investments in new production capabilities and capacity offset by lower Industrial division sales, “largely attributable to lower sales in Continental Europe”.
The company though noted;
“We anticipate an improvement in trading in the Industrial division based on customers' forecast orders and this should lead to an uplift in sales and profitability in the second half of the financial year such that full year results will be in line with market expectations. There will also be an initial contribution from Flexipol. We further anticipate that our new business activity will bring significant benefits in the medium and long term.”
Its confidence is reflected in an increased interim dividend per share of 1.33p (up from 1p, to be paid on 31stDecember with an ex-dividend date of 11th December) and forecasts are for earnings per share of circa 12p and a total dividend per share of 4p for the year, rising towards 15p and more than 5p next year.
With the balance sheet looking under control, this suggests a dividend yield at the current 117p offer price of 3.4%, rising to 4.3%+. a decent recovery from the 100p hit in October. We continue to consider that this recovery has further to go and remain attracted by the dividend whilst waiting. At up to 140p - Buy.
Is this tip from TW going to prove to be a curse? We can never forget his tip to buy Rivington Street Holdings.
https://www.youtube.com/watch?v=Kf5tT02Tw8A
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