Last checked at 6 Nov 2009 07:00
6 November 2009
Stanelco plc ("the Company" or "the Group")
Interim Management Statement
Stanelco plc issues its interim management statement for the period from 1 January 2009 to 5 November 2009, as required by the UK Listing Authority's Disclosure and Transparency Rules.
Highlights
Sales to 30 September up 12% to £13.4m
Trading performance in line with Board's expectations:
Continued growth in bioplastics division driven by interest in adopting sustainable products; increasing applications in new sectors
Radio frequency applications division sales order pipeline continued to strengthen; growing overseas sales in China and India
Closing cash position at 30 September £3.7m, increased by working capital improvements
Board confident in full year outlook
Trading Update
Group revenues grew strongly during the nine months to 30 September 2009 and the Group's overall trading performance was in line with the Board's expectations.
Group revenues increased from £12.0m to £13.4m in the nine months to 30 September 2009, an increase of 12% compared with the same period last year. This reflected a 29% increase in bioplastic sales made directly by the Company, a 30% increase in sales in RF Applications division and an 8% increase in third party sales from our joint venture, Biotec.
Our cash position at 30 September 2009 was £3.7m, strengthened since the half year by working capital improvements, including a reduction in stock levels following the summer production holiday.
Bioplastics division
In the Bioplastics division, the sales team that was established last year has had a number of successes in growing sales of the Group's existing biodegradable products into the market, delivering a 29% increase in the Company's bioplastic sales in the nine months to 30 September 2009. The division has broadened its customer base with over 40 new customers in 2009 and widened the set of end-use applications by a further 17 in the same period. The management remain encouraged by the division's opportunities for growth.
The product development team continues to work closely with a number of blue chip customers and mainstream plastics convertors to develop a widening range of biodegradable products that can substitute oil-based plastics. Whilst some of these development paths are still at an early stage, others are poised to deliver further growth in the coming months. The development team continues to focus on those accounts which we consider could have the maximum growth potential.
We continue to see strong demand for bioplastic products in the market, driven not only by concerns about waste disposal but also by the desire of many large corporations to switch to using sustainable resources in key brands. This switch to the use of "renewable" materials in advance of legislation is seen as both a branding enhancement and a hedge against further oil based price rises. Sectors in which we are gaining traction include packaging, waste disposal, paper products, personal care, horticulture and electronics. The sales development work undertaken in the USA over the past year is now also gaining momentum.
Our joint venture, Biotec, delivered 8% growth in its third party sales for the 9 months to 30 September 2009 compared with the same period last year.
Radio Frequency (RF) applications division
In the RF Applications division, the team has been fulfilling a number of significant orders that have been won in the nine months to 30 September 2009, including the £0.3m order for RF furnaces disclosed in our interim results. Sales in the period increased by 30% compared with the same period last year including growth in both optical fibre furnaces and more general industrial equipment in which we are building a portfolio of customers making repeat orders. The sales order pipeline continues to strengthen with a particular emphasis on sales in India and China. As a result, a new sales consultant has now been appointed for Stanelco dedicated to the Indian market, as this territory shows signs of increasing growth in the next few years.
Outlook
The Board continues to be confident in the outlook for the full year. Our focus continues to be on working closely with customers with the potential to deliver increases in revenue, whilst considering acquisition opportunities and other paths that could significantly increase the scale of the business and deliver shareholder value.
- Ends -
For further information please contact:
| Paul Mines, Chief Executive, Stanelco plc Sue Bygrave, Group Finance Director, Stanelco plc | Tel: +44 (0) 2380 867100 |
| Jonathon Brill/Caroline Stewart, Financial Dynamics | Tel: +44 (0) 20 7831 3113 |