Plastics Capital sees decent first-half growth

Niche plastics products manufacturer Plastics Capital issued its unaudited interim results for the six months ended 30 September on Monday, which were reportedly in line with its own expectations.

The AIM-traded firm said revenue rose 11.4% year-on-year to £40.63m, with EBITDA improving 42.8% to £3.67m.

Its profit before tax was 75.4% higher at £2.1m, with earnings per share growing 67.9% to end the period at 4.7p.

The board declared nil dividend for the period, in line with last year, and reported net debt of £15.75m, widening from £14.99m 12 months ago.

On the operational front, Plastics Capital reported 12.1% organic revenue growth at constant currency, with revenue in its films division up 12.0% organically, or 11.1% in volume terms.

Over in the industrial division, revenue rose 12.2% organically at constant currency.

EBITDA was ahead 29.0% at constant currency, which the board said was primarily driven by the industrial division, with bearings projects flowing through to product sales as anticipated, and matrix business acquisitions from the prior year said to be progressing well.

The integration of the films division was also progressing as planned, though the directors said the full benefits were yet to be experienced.

A further £2.1m was invested in capability and capacity expansion projects during the period, while project wins in the bearings business continued to build as the board reported £5.8m of annual sales from projects won but still to enter production.

“I am pleased to report continued strong organic revenue growth across the group,” said Plastics Capital chairman Faisal Rahmatallah.

“This is now being reflected in improved profitability as the mix of revenues in our two divisions has rebalanced and because we are now feeling the full effect of sterling's devaluation in 2016 after the Brexit vote.”

Meanwhile, Rahmatallah said the company had continued to invest heavily in business development, new products, production capacity and employee capabilities.

“Order books are healthy and we expect good sales growth to continue for the foreseeable future if economic conditions remain satisfactory.

“The board anticipates that profits for the full financial year will be ahead of [the 2018 financial year], and in line with consensus market expectations.”