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 broadly in line with market expectations.
Trading has continued as expected and in a similar pattern to the first half of the year. We are pleased to report strong sales of mandrels and improving sales of creasing matrix and films. Demand for bearings has been relatively weak, predominantly as a result of some new product development slippage from our customers. Margins and cash generated from operations remain strong and are similar to last year.
As previously announced, completion of the acquisition of Shengli Printing Science and Technology Co, Ltd (“Shengli”) has been delayed for approximately two months. However, good progress has recently been made in satisfying the various conditions of the local Commission of Commerce. With supplementary information having recently been provided, we are currently on track to complete the acquisition on or before 28 February 2014.
Significant developments in recent weeks include:
- Certain breakthrough innovations in mandrel processing which are expected to facilitate further significant development of the business in coming years through penetration of new market segments with new product variants;
- Successful test marketing of the development of a “super-durable” creasing matrix in certain key countries;
- Our new Regional Director based in China, Tony Qu, took up his position at the beginning of January and is now driving completion of the Shengli acquisition and the development of bearings and mandrels sales into the local Chinese market; and
- Conversion of a new project for Samsung Electronics involving a scanner pulley bearing. Samsung are already a key account and this project is expected to generate a further £100,000 of annual sales to this account once the project goes into full production.
Commenting, Faisal Rahmatallah, Executive Chairman, said:
“We have made some exciting breakthrough innovations in recent months, which will help drive our growth in the medium term. In the short term demand is mixed with some areas, such as mandrels, where growth is strong and others, such as bearings, where growth is being affected by delays in customers’ product introduction schedules. Overall, performance should be broadly in line with expectations over the final quarter and, looking into the next financial year, I anticipate a year of significant progress.”