Analysts reacted to another positive update from British Polythene Industries (BPI) by upgrading pre-tax profit forecasts for the second time in less than two months. Driving this optimism was better than expected first-quarter trading and higher than anticipated gains from its disposal of Chinese subsidiary Amcor.
Underlying trading in the first three months of the year was buoyed by robust demand, currency tailwinds and lower input costs, including cheaper energy prices. That follows on from the favourable trends referenced in results for the year to December 2015 and, according to broker Edison, should provide a solid foundation for the historically slower second half.
Supplementing this encouraging news was an update on the proposed disposal of BPI-s Chinese film extrusion facility. Not only has the deal been completed, but it also generated £1m more profit than originally expected. Thomas Rands at Investec reckons this will result in an £8.7m cash inflow, which should reduce net debt to 0.3 times cash profit.
