Plastics Capital (AIM: PLA), the niche plastics products group, is pleased to announce that it expects performance for the full year to 31 March 2015 to be broadly in line with market expectations. Whilst trading in the second half of the year was at the lower end of our expectations, the results showed a considerable improvement on the first half trading performance.
Trading in the second half of the year was considerably ahead of the first half year in terms of both revenue and profits. This strong performance was a result of strong growth at Flexipol, which was acquired in November 2014, and an encouraging recovery in sales and profitability of the bearings business, BNL. Sales of creasing matrix continued its steady growth on the first half whilst the expected recovery in mandrel sales only began to materialise after the financial year end. We now expect our Industrial division, which includes bearings and mandrels, to continue to recover slowly over the new financial year.
We are particularly pleased to report that the integration of Flexipol was completed successfully during the period with its financial results exceeding our original expectations. Furthermore, we are currently evaluating a number of product-market opportunities to take this business forward through further innovation and capacity expansion and are proactively adding additional sales resource to the specialist films business. Collaboration with our pre-existing film packaging business, Palagan, is also progressing well and some initial cross-selling successes were achieved during the period. We expect this to develop further in the new financial year.
Operating margins benefitted from lower raw material prices that prevailed throughout the second half of the financial year and the cost reduction programmes implemented across the bearings business. Cash generation continued in-line with market expectations.
Commenting, Faisal Rahmatallah, Executive Chairman, said: "We have seen a substantial recovery in performance during the second half year particularly in our bearings business; we are also very pleased with the performance to date and the potential for further development of our recent acquisition, Flexipol. Both of these factors augur well for growth and profitability for the 2015-16 financial year.”