Business is picking up at acquisitive Plastics Capital, which has reported interim pre-tax profits up 150 per cent to £1.5 million.

Business is picking up at acquisitive Plastics Capital, which has reported interim pre-tax profits up 150 per cent to £1.5 million.

The AIM-quoted Company, which supplies plastic components for making anything from hose mandrels (which put the holes in rubber hoses) to air conditioning, vehicle power steering and post office sorting equipment, would have shown an 8 per cent profits fall to £1.1 million for the six months to September but for a net £347,000 boost from foreign exchange and exceptional items, against a £624,000 drain the year before.

Turnover slipped 13.56 per cent to £12.9 million over the first half year, but founding executive chairman Faisal Rahmatallah says volumes are now 20 per cent above their low point from January to March — though still 20 per cent below pre-credit crunch levels. London-based Plastics Capital, which sells to support services groups, consumer markets and heavy industry, including motor manufacturers, with 62 per cent of sales overseas, responded to the challenge by pruning UK staff and moving more production to facility established in Thailand established a year ago.
Rahmatallah says the company, which tends to have long-term non-contractual relationships with its customers, is working on new products and new process technology and is winning new business, helped by the weakness of sterling. He says this should keep Plastics Capital ahead of the overall market, which he argues will take three to four years to return to pre crunch levels.

The company, which reduced net debt by £1.5 million to £18 million, has made it a priority to cut debt further, says Rahmatallah. He sees more potential acquisitions around, though their owners are trying to wait for prices to improve before selling and says he does not expect Plastics Capital to do much in this department for the next 12 months.