British Polythene Industries (BPI), which makes the kind of plastic products that line bins or which help farmers to wrap silage, has generally proven to be a resilient performer. But, given erratic polymer prices – suppliers imposed dramatic price increases this month, with more hikes on the way – the shares look set to mark time.
Apart from farming, where a more settled late summer looks set to extend the growing season and keep the demand for silage wrapping high, there's considerable pressure on individual sectors. For example, sales of industrial products from BPI's Dutch plant was nearly 10 per cent down, while sales to the UK's anaemic construction industry suffered, too. Indeed, sales in mainland Europe fell 5 per cent, while UK and Ireland unit saw sales drop 5.5 per cent – although the combined operating profit from the two divisions remained largely flat at £14.6m. The UK segment, in particular, benefited from a £1.5m fall in operating costs arising from more efficient production processes at BPI's Ardeer site and the closure of a plant in Swansea. Meanwhile, a reduction in yields has forced BPI's pension scheme deficit to jump from £59.5m to £69.9m.
Broker Investec Securities expects full-year pre-tax profit of £18.8m, giving EPS of 49.9p (from £19.1m and 51.6p in 2011).
BRITISH POLYTHENE INDUSTRIES (BPI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 365p | MARKET VALUE: | £96.7m | |
| TOUCH: | 363-367p | 12-MONTH HIGH: | 396p | LOW: 300p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 110p | NET DEBT: | 46% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 293 | 15.1 | 42.6 | 4.0 |
| 2012 | 273 | 13.3 | 34.7 | 4.2 |
| % change | -7 | -12 | -19 | +5 |
Ex-div:17 Oct Payment:16 Nov | ||||
