Plastics Capital (AIM: PLA), the niche plastics products group, is pleased to announce that it expects trading for the full year ended 31 March 2016 to be in line with market expectations.
Trading in the second half of the year was considerably ahead of that for the first half in terms of both revenue and profit before tax. Trading improved in the Industrial Division with the bearings business performing strongly as the year progressed, while the Films Division also continued to make good progress delivering on its key initiatives with 900 tonnes of new capacity added during the year. In addition, we benefitted in the second half of the year from certain external factors, such as the Christmas upswing that applies to the Films Division, an improved currency position and lower raw material prices, which increased operating margins. Cash conversion was also good during the year with net debt at the end of the year in-line with market expectations.
Despite difficult macroeconomic conditions, which negatively affected certain parts of the business, new business wins have generally compensated for softer global markets. Moreover, during the last year, we have developed a pipeline of new products to be introduced during the next 12 months, which create the potential for strong organic growth over the next few years. We are also expanding capacity in industrial films, bearings and mandrels – all areas where we anticipate capacity constraints in the next 12-24 months. Finally, we continue to develop opportunities for acquisitive growth which remains an important part of our business strategy.
Commenting, Faisal Rahmatallah, Executive Chairman, said: "We are pleased to report that trading in the second half of the year was strong after an indifferent first half. The Group is currently progressing a number of exciting projects for future growth, including new product introductions, capacity expansions and bolt-on acquisitions and investments. We anticipate bringing a number of these projects to fruition over the next 12 months, which augurs well for improved sales and profit growth for the Group.”