BPI (BPI) had already flagged a much better first half, and operating profit duly jumped 14 per cent to £16.4m. And management will be "disappointed" if the second half does not at least match last year. Encouragingly, many parts of the company's plastic wrapping business are already busier, and demand is beginning to look "less uncertain".
Much of the upside came from mainland Europe. Profits in the region jumped 14 per cent to £9.6m, driven by additional capacity for silage products and a £0.4m currency benefit. Significant investment is paying off, too, with sales of cutting-edge silage technology rocketing by almost half. It now generates 15 per cent of all BPI's silage sales, and chief executive John Langlands predicts further rapid growth.
Volumes in the UK and Ireland fell and energy costs increased by £0.7m, but tightening up operations at factories in Ardeer and Leominster meant profits still rose 5 per cent to £6.1m. Warm weather generated extra demand for shrinkwrap from the soft drinks industry in July, too, and despite margin pressure in retail and healthcare sectors, returns in the UK should improve this year. Cost-cutting and the absence of power cuts this time tripled profits in the US to £0.7m.
Broker Investec Securities expects full-year adjusted pre-tax profit of £22m, giving adjusted EPS of 55p (from £19.7m and 51.6p in 2012).
BRITISH POLYTHENE INDUSTRIES (BPI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 583p | MARKET VALUE: | £155m | |
| TOUCH: | 580-586p | 12-MONTH HIGH: | 608p | Low: 355p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 191p | NET DEBT: | 29% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 273 | 12.1 | 32.3 | 4.20 |
| 2013 | 282 | 14.1 | 37.7 | 4.50 |
| % change | +3 | +17 | +16 | +7 |
Ex-div: 16 Oct Payment: 15 Nov | ||||
