Last checked at 28 Sep 2016 07:00
Plastics Capital plc
(The "Company" or the "Group")
Trading Update
Plastics Capital plc (AIM: PLA), the niche plastics products group, announces an update on trading for the financial year to date and is pleased to confirm that the Company continues to trade in line with market expectations.
Trading during the six-month period since 31 March 2016 shows improvement on the prior year, primarily due to organic sales growth in the Industrial Division, and the initial contribution from Synpac in the Films Division, which was acquired in July 2016.
Industrial Division
Sales at our Bearings Business continue to improve due to previously won projects that are now starting to ramp-up after some initial delays. The pipeline of business won but still to go into production remains strong, as does the pipeline of projects in prototype development and testing. In addition, this business is being assisted by the weakness of sterling against the US dollar, although the benefit of this is not expected to be seen materially until the FY17-18 financial period.
Demand at our matrix business is also improving relative to prior year. This is partially as a result of stock depletion during the prior financial year by some of our distributors in emerging markets, but also the result of strong sales of C&T Matrix's broadening range of matrix products and other consumables.
Mandrel sales have also grown relative to the prior year; the order book is strong and the list of customers undergoing trials is extensive, which suggest that mandrel sales will progress well in H2.
Films Division
Sales have also increased across the Films Division relative to the same period last year. Flexipol continues to trade well and has a healthy order book as we move into the busy time of year. The project to install a new extruder to provide an additional 2,500 tonnes of capacity over the next 2-3 years is on track for completion by the financial year end.
Palagan is making some important strategic changes to promote long term growth and profitability as key improvements are being made to shift patterns, account management and product development. Performance has suffered a little whilst these changes are being implemented.
Synpac joined the Group from mid-July and is trading in line with expectations. We are pleased with the quality of this business and the fit within the rest of the Film Division, particularly Flexipol.
Commenting, Faisal Rahmatallah, Chairman, said:
"Organic sales growth is now being achieved broadly across the Group, and is being enhanced by selective acquisitions. Our largest Division, Films, is trading well and moving into its busy period and we are adding capacity to progress further in this area. Our Industrial Division continues to improve also as the pipeline of recently won business achieves production ramp-up. We continue to invest for further growth across the business and anticipate a year of good progress."
For further information, please contact:
Plastics Capital plc | Tel: 020 7978 0574 |
Faisal Rahmatallah, Executive Chairman |
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Nick Ball, Finance Director |
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Cenkos Securities | Tel: 020 7397 8900 |
(Nomad and joint broker) |
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Mark Connelly |
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Callum Davidson |
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Allenby Capital Limited | Tel: 020 3328 5656 |
(Joint broker) |
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David Hart |
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Katrina Perez |
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Walbrook PR Ltd | Tel: 020 7933 8780 or plastics@walbrookpr.com |
Paul Cornelius | Mob: 07866 384 707 |
Helen Cresswell | Mob: 07841 917 679 |
Notes to Editor
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 six UK based factories, with a further three factories in Asia. Approximately 40% of its £55 million sales are made outside the UK to more than 80 countries.
Further information can be found on www.plasticscapital.com