Last checked at 2 May 2018 07:00
2nd May 2018
Plastics Capital plc
("Plastics Capital" the "Company" or the "Group")
Trading Update
Plastics Capital (AIM: PLA), the niche plastics products group, is pleased to announce that it expects trading for the financial year ended 31 March 2018 to be broadly in line with market expectations. The Company expects to announce its results for the year ended 31 March 2018 in the week commencing 2nd July 2018.
As highlighted in the announcement on 1 March 2018, the financial year finished with both sales and profits a little weaker than expected. For the year overall though we experienced a year of exceptionally strong, primarily organic, sales growth particularly in our Films businesses. Flexipol had another record year, Palagan continued to recover from a weak FY16-17 and Synpac performed well. As production between these businesses was increasingly being shared we have decided to bring them together under one management team. This will enable us to utilise capacity in the most efficient way possible and to improve margins across the division.
Sales performance in the Industrial Division remains mixed with strong growth in mandrels, satisfactory performance in the matrix area and weak, though improving, sales in our bearings business. During the year we have successfully established mandrel production in the USA and rationalised matrix production at CCM and Mito back to our main creasing matrix factory in Wellingborough. From the beginning of FY17-18, our bearings business has suffered from some delays in the ramp-up of two large projects for major multinational customers, but we have recently seen some improvement to this situation and are also starting to benefit from further new business coming on stream. The bearings business has a high degree of operational leverage and so the impact of demand variability in this business has a significant impact on group profits. We are hopeful that this will turn in our favour during the current financial year.
As previously explained to shareholders, we have continued to invest heavily to add capacity and capabilities to support double digit revenue growth, and, whilst this is being achieved, this re-investment will continue to impact on depreciation, interest costs and cash flow. We have also during the year added to our investment in CCM in West Virginia where we are now 49% shareholders and have paid the deferred consideration on Synpac which was acquired in 2016. Our priority remains allocation of capital towards organic and related acquisitive growth.
Net debt finished the year in line with expectations at £14.7m, which is approximately £1.5m lower than the prior year. The equity subscription of £3.5m, net of expenses, made in June 2017, contributed effectively to the maintenance of an appropriate capital structure during the course of the year.
Commenting, Faisal Rahmatallah, Executive Chairman, said: "We are pleased to report exceptionally strong organic growth. Generating sustainable organic growth has been a challenge in recent prior years but after two consecutive years of strong growth we can see that the investments that we continue to make in people, business development, product development and new capacity are making a sustainable difference. We can see this continuing as we move into the current financial year."
For further information, please contact:
Plastics Capital plc | Tel: 020 7978 0574 |
Faisal Rahmatallah, Executive Chairman | |
Nick Ball, Finance Director | |
Cenkos Securities | Tel: 020 7397 8900 |
(Nomad and joint broker) | |
Mark Connelly | |
Callum Davidson | |
Allenby Capital Limited | Tel: 020 3328 5656 |
(Joint broker) | |
David Hart | |
Katrina Perez | |
Notes to Editors
Plastics Capital is a niche manufacturer of specialist plastic products. Applications for these products vary widely and examples include:
· Packaging for the food manufacturing and distribution - films, sacks and pouches
· Steering columns and instrument control knobs in the automotive industry - plastic ball bearings
· Hydraulic and industrial rubber hose manufacture - various types of plastic mandrel
· Cardboard box manufacture - plastic creasing matrices
Plastics Capital's business model is based on understanding customers' problems in depth, and then developing and mass producing proprietary, technical solutions for these problems.
The business operates through two divisions, Films and Industrial, and has the majority of its production in five UK based factories, with a further three factories in Asia. Approximately 45% of its £77 million sales are made outside the UK to more than 80 countries.
Further information can be found on www.plasticscapital.com