Plastics Capital (AIM: PLA), the niche plastics products group, is pleased to announce that it expects performance for the full year to 31 March 2013, including revenue, profit margins and cash flow, to be broadly in line with market expectations.
Notably, the continued weakness in Western Europe has been successfully counteracted by sales growth through new business gains in North America and Asia. Furthermore, Sterling’s recent weakness has also been beneficial to the Group. Approximately 20% of the Company’s sales are denominated in US dollars and this leads to near term financial benefits. Over the longer term, we expect the competitiveness of all the solutions that the Company designs and/or manufactures in the UK for export will improve significantly. UK manufactured exports currently represent approximately 50% of Group sales.
We continue to make good progress in converting sales opportunities into future projects, highlighted by a recent contract win with one of the world’s largest manufacturer of CCTV cameras, our first project for this key account and one which we hope will lead to a number of follow-on projects. We have also started supply of mandrels to a very substantial hose plant based in Turkey, another key account win which is part of a multinational group. Both of these accounts could be worth over £0.5m sales revenue within the next three years.
Investments in growth that we are implementing for the new financial year are progressing well. The major new production line for our film packaging business and the new factory in China for machined plastic ball bearings are both progressing on schedule to commence production in the second quarter of the current financial year.
Commenting, Faisal Rahmatallah, Executive Chairman, said:
"Despite significant demand weakness for our products in Western Europe we have managed to maintain sales broadly in line with prior periods because of new business successes. We are investing for organic growth in 13-14 and beyond; the indications for this to bear fruit are good and are boosted by the recent depreciation of sterling.”