Plastics Capital plc (AIM: PLA), the acquisitive niche plastics products group, provides an update on trading for the year to 31 March 2009, prior to entering the close period. The full year results are scheduled to be announced on 30 June 2009, when the Company expects to announce turnover of not less than £28 million and underlying profit before tax for the year to 31 March 2009 to be not less than £2 million, after a £1m charge for hedging costs in the year due to sterling depreciation against the dollar. Net bank debt is expected to be c£19 million.
Since the last trading update, our margins have remained firm but volumes have been weak in all businesses. Our Rotating Parts division (BNL), the largest in the Group, which had been relatively unaffected by the economic downturn throughout most of the financial year, has recently been impacted by the widely reported collapse in international trade for manufactured products, with some orders being cut back and deliveries being delayed. This has partially been caused by supply chain destocking.
Although also weak, volumes have been stable in our Board and Print Consumables division (C&T Matrix) and our Hose Mandrel and Film division (Bell), both of which suffered significant volume declines earlier in the financial year. Our Packaging Film division (Palagan), which is our only business that is heavily focused on the UK market, has performed well and only suffered a relatively modest volume decline over the last 12 months, although this trend did worsen somewhat in the final quarter of the financial year.
In response to these trading conditions, cost reduction measures continue to be implemented across the Group. Meanwhile, operating cash flow has remained solid. The 2009/10 financial year starts with sterling at a much more favourable level than it was at the start of 2008/09, which will benefit our export based businesses. Commenting, Faisal Rahmatallah, Executive Chairman said: "Customer loyalty remains high and we are winning new business in all areas. Prospects for the Group continue to be positive, particularly when international trade starts to recover from current abnormally low levels."