News blog
Plastics Capital
- BY: Andrew Hore |
- POSTED: 30/11/2011 |
Plastic bearings and products manufacturer Plastics Capital continues to reduce its borrowings even though revenues held steady.
In the six months to September 2011, revenues were flat at £16.3m. The Japanese earthquake knocked plastic bearings sales to Japanese customers and there were also lower revenues from the creasing matrix division. New and thinner specialist films helped that division to grow significantly. Longer-term revenue growth will come from a combination of new products and new customers.
Underlying profit improved from £1.79m to £1.97m. Net debt continues to fall. It reached £11.3m by the end of September 2011 and is forecast to be £9.7m by next March. The new bank facility is worth a total of £14m. A maiden dividend of 0.33p a share has been declared.
The Thailand factory is running at 80% of capacity and there is room available to double the existing capacity. New offices in India and China are helping Plastics Capital win new business in those countries. The main raw materials prices have either flattened out or started to fall.
There has been some destocking and softening of demand. House broker Cenkos forecasts a rise in full year profit from £3.9m to £4m.
At 69p a share, Plastics Capital is valued at £19m. The shares are trading on just over six times prospective 2011-12 earnings.
The low rating makes it difficult to secure earnings enhancing acquisitions and, anyway, Plastics Capital is finding it difficult to identify suitable acquisition candidates. It only wants to acquire businesses that are already successful and profitable.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFNovember2011_26.pdf
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