Plastics Capital - Final Results

Plastics Capital (PLA) is a specialist plastics products manufacturer focused on proprietary products for niche markets. The Group has four factories in the UK, one in Thailand, two in China and sales offices in the USA, Japan, India and China. The Group has approximately 350 employees.
It is a small company with a market cap of around £40m and is listed on the AIM market. PLA was added to my portfolio last December - here’s a link to my post.


The defining characteristics of Plastics Capital’s businesses are:

• Leaders in their niche industrial markets ­in many cases with no direct or limited competition
• Long established (25 years or more) with long term customer relationships and high retention rates
• "Mission critical” to customers with our products frequently representing a low fraction of customers’ costs
• Highly automated with bespoke manufacturing processes that have been perfected over many years and are hence very difficult to replicate

Results

PLA has today issued results for the full year to 31st March 2014 (link via Investegate). Revenues increased 3.3% to £32.4m  and profits increased by 8.7% to £3.58m.

Adjusted earnings increased 11% to 11.1p per share and PLA has increased the full year dividend by 50% to 3.0p covered 3.7x. The final dividend of 2.0p is payable 15th August(ex div 16th July) providing a yield of 2.2% at current prices. The projection is for 4.0p next year and 5.0p  in 2015/16, although this could be a little conservative given the progress made over the past 12 months.

Net debt has reduced from £8.37m to £7.17m

Commenting on these results, Faisal Rahmatallah, Executive Chairman, said:
"The 12 month period to 31 March 2014 represents a period of solid progress and significant investment for future growth.  Pleasingly, sales have advanced, margins have improved and profits have increased. Furthermore, new capacity has been added in the UK, our Chinese operations have been expanded and several exciting new product ranges have been developed for launch during the current financial year.

"Trading in the current year is in line with management's expectations and we therefore continue to anticipate improving turnover throughout the year as projects that have already been won convert into sales.  We continue to be highly profitable and cash generative as a Group and look forward to another year of good progress."

These look like decent results and I am v. happy to see the anticipated increase in dividend materialise. More following the interims at the end of the year.

As ever, slow & steady steps…..