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.
Revenues have shown a significant improvement on those achieved in each of the last two quarters. Demand for bearings is recovering from a poor first half; specialty industrial films continue to trade in-line with the first half and creasing matrix maintains its steady growth over the period.
Operating profit margins are now benefitting from lower raw material prices and from certain cost reduction programmes implemented within our bearings business. Overall, Group operating profit and cash generation has improved over the first half of the financial year.
Flexipol Packaging Limited (“Flexipol”), which was acquired on 21 November 2014, is performing ahead of expectations and progress has been made on identifying and investigating cost synergies with Palagan. Initial assessments of the financial impact of these synergies are ahead of management’s expectations prior to completion of the acquisition. The Company has also started to test the commercial property market for the potential sale and leaseback of Flexipol’s wholly owned property in Haslingden, Lancashire.
Engineering work continues within the bearings business to improve the conversion frequency of new business leads and the speed to purchase orders. Three significant projects with lifetime sales exceeding £3.5 million have been converted since mid-December 2014, including a CCTV camera project in China, which helps to take our activities in that market forward significantly.
Commenting, Faisal Rahmatallah, Executive Chairman, said:
“Trading conditions remain somewhat variable reflecting global economic conditions, but I am pleased to say that, as a Group, we continue to make steady progress. Our recent acquisition, Flexipol, is performing well and we see exciting further possibilities in this area. Overall, we anticipate that performance over the second half of the financial year will be broadly in line with market expectations.”