Plastics Capital PLC Trading Update (6694W)
February 13 2017 - 1:00AM
UK Regulatory
TIDMPLA
RNS Number : 6694W
Plastics Capital PLC
13 February 2017
Plastics Capital plc
(The "Company" or the "Group")
Trading Update
Plastics Capital plc (AIM: PLA), the niche plastics products
group, is pleased to provide a Q3 trading update and to confirm
that the Company continues to trade in line with market
expectations.
Group Trading
Group revenues were ahead of expectations in Q3 as a result of
stronger than anticipated demand. Gross profit margins remain good
but a little lower than historically, due to the changing business
mix resulting from the acquisition of Synpac. We have meanwhile
increased investment in sales, marketing and new product
development across the Group to continue to drive the growth of the
business and so profits for the current financial year remain on
track to meet market expectations.
Industrial Division
Bearings and mandrel sales were strong during Q3, supported by
new business wins that entered production this financial year and
growing demand from US customers. We have also had some excellent
new project successes which we expect will enter production in
upcoming years and which have replenished the new business
pipeline. We are adding sales resources and capacity in both
businesses to enable both to meet increasing demand in line with
our five year targets.
Matrix activities continue to make progress in line with our
strategy of getting "closer to the customer" and broadening the
range of die-cutting and die-making consumables that we have to
offer. In December we concluded an agreement with our Italian
distributor enabling us to take a significant minority stake in
this business which also makes a range of creasing matrix products
under the brand name MITO. We have also applied for patents for a
new product development being undertaken with one of our Japanese
distributors, which we believe has excellent market potential and
product trials are ongoing.
Film Division
The Films Division has had a varied year so far. Flexipol has
continued to grow sales and profits, whilst Synpac has traded in
line with the expectations that we had formed at the time the
acquisition was concluded in July 2016. However, Palagan has
experienced some weakness in trading as it made important changes
to its business strategy designed to position it for longer term
growth.
At Flexipol we have nearly concluded the installation of an
additional extruder which will increase capacity by a third and is
expected to enable the business to continue growing at the same
rate over the next five years or so. At Synpac we are busy working
on procurement and sales synergies with the other companies in the
Division, and integrating it into the Group.
We are currently making important changes within Palagan in
terms of its business strategy, which are designed to enable the
business to achieve long-term growth. We are investing in the
recruitment, training and development of operational staff, the
introduction of new films and the development of some innovative
products. We anticipate that it will take another 6 -12 months to
conclude this transitional phase, at which point Palagan will be in
a good position to increase sales and profitability.
Commenting, Faisal Rahmatallah, Executive Chairman, said:
"Trading conditions are generally good and we are busy
implementing the investments we have previously highlighted as key
to fulfilling the Group's five year strategy. We are very pleased
with progress generally across the Group and particularly in our
two most substantial business areas, plastic bearings and
specialist sacks. Overall, we anticipate that performance over the
second half of the financial year will enable us to announce
results that are in line with market expectations."
Plastics Capital plc Tel: 020 7978 0574
Faisal Rahmatallah, Executive Chairman
Nick Ball, Finance Director
Cenkos Securities Tel: 020 7397 8900
Mark Connelly
Callum Davidson
Allenby Capital Tel: 020 3002 2074
Katrina Perez
David Hart
Walbrook PR Ltd Tel: 020 7933 8780
Paul Cornelius plasticscapital@walbrookpr.com
Helen Cresswell
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 five UK based
factories, with a further three factories in Asia. Approximately
40% of its GBP55 million sales are made outside the UK to more than
80 countries.
Further information can be found on www.plasticscapital.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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