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Straight goes askew

Created:
23 July 2008
Written by:
Malar Velaigam

Recycling containers group Straight said full-year profits will fall short after sales in its retail division fell 46 per cent in the first half. The trade business continues to perform well, with sales up 11 per cent, but investors binned the shares, which fell up to 25 per cent.

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That leaves the group capitalised at around £5m, or less than half annual sales. As a response, there'll be a full review of the retail division's strategy, product range and pricing.

IC VIEW:

FairlyPriced

You'd think Straight would be coining it, with local authorities and consumers alike under regulatory pressure to save water and recycle kitchen waste. Yet this is the second year in which there have been significant problems in Straight's retail business. Wet weather is part of it, but we suspect it is not the whole story and until it's sorted out, the shares are fairly priced at 38p.

Last IC view: Good value, 96.75p, 30 March 2007

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