Plastics Capital plc (AIM: PLA), the niche plastics products group, announces an update on trading for the financial year to date and is pleased to confirm that the Company continues to trade in line with market expectations.
Trading during the six-month period since 31 March 2016 shows improvement on the prior year, primarily due to organic sales growth in the Industrial Division, and the initial contribution from Synpac in the Films Division, which was acquired in July 2016.
Sales at our Bearings Business continue to improve due to previously won projects that are now starting to ramp-up after some initial delays. The pipeline of business won but still to go into production remains strong, as does the pipeline of projects in prototype development and testing. In addition, this business is being assisted by the weakness of sterling against the US dollar, although the benefit of this is not expected to be seen materially until the FY17-18 financial period.
Demand at our matrix business is also improving relative to prior year. This is partially as a result of stock depletion during the prior financial year by some of our distributors in emerging markets, but also the result of strong sales of C&T Matrix’s broadening range of matrix products and other consumables.
Mandrel sales have also grown relative to the prior year; the order book is strong and the list of customers undergoing trials is extensive, which suggest that mandrel sales will progress well in H2.
Sales have also increased across the Films Division relative to the same period last year. Flexipol continues to trade well and has a healthy order book as we move into the busy time of year. The project to install a new extruder to provide an additional 2,500 tonnes of capacity over the next 2-3 years is on track for completion by the financial year end.
Palagan is making some important strategic changes to promote long term growth and profitability as key improvements are being made to shift patterns, account management and product development. Performance has suffered a little whilst these changes are being implemented.
Synpac joined the Group from mid-July and is trading in line with expectations. We are pleased with the quality of this business and the fit within the rest of the Film Division, particularly Flexipol.
Commenting, Faisal Rahmatallah, Chairman, said:
“Organic sales growth is now being achieved broadly across the Group, and is being enhanced by selective acquisitions. Our largest Division, Films, is trading well and moving into its busy period and we are adding capacity to progress further in this area. Our Industrial Division continues to improve also as the pipeline of recently won business achieves production ramp-up. We continue to invest for further growth across the business and anticipate a year of good progress.”