Plastics Capital, the niche industrial plastic product manufacturer, reported in the June update that a new £14 million banking facility, comprising an £8 million revolving credit facility and £6 million amortising term loan, has been secured.
The key benefits are that it has a final maturity date of June 2015 (vs. March 2013 for the former facility), and is cheaper and more flexible than the previous facility. It will help to finance the strong organic growth being achieved and also accelerate the timescale within which the payment of dividends can be considered.
Plastics Capital also announced the final results to March 2011 showing sales of £33.5 million (2010: £26.7 million), adjusted operating profit of £3.7 million (2010: £3.1 million), pre-tax profit of £3.6 million (2010: £1.8 million) and adjusted EPS of 10.2p (2010: 8.0p). The results include an exceptional charge of £178,000 (2010: £657,000 charge).
The company reported that new business and passing on increased raw material costs accounted for 40% and 17% respectively of the sales increase. 26 Key Accounts were won, bringing the year end total to 63, accounting for 57% of total sales. EBITDA margin was 17.2% (2010: 19.0%) and this fall was due a combination of foreign exchange impact (hedging of the $ was at 1.64 vs. 1.48 for 2010) and increasing raw material prices. Year end net debt was £11.7 million (2010: £16.1 million net debt).
2011/12 will be a year of investment in sales activities (with a target of 20 new Key Accounts), product introduction and development, and in new machinery - this will impact profitability and cash flow in the short term, but will significantly benefit growth and profits in the longer run.
The PLA share price has increased by 217% over the last year.
Plastics Capital Plc is graded b by LCF Research. To learn more, follow this link.
