Shares soar as Straight sees orders flood in

Chief executive Jonathan Straight said the group had taken orders at "unprecedented levels" in the last three months of 2009 which will place it in a "strong position" for 2010.

Leeds-based Straight has transformed itself over the past few years, pulling out of non-profitable products which were sold to the public and refocusing on contracts with local councils.

Yesterday it said group turnover for the year to December 31 was 11 per cent higher at over 28m.

2009 pre-tax profits are expected to be in line with market expectations of around 1.4m. This compares to a 972,000 loss the previous year when the group took a lot of costs out of the business.

The group's shares rose 5.7 per cent, a rise of 5.5p to 102p.

Straight said its Trade business saw continued growth with significant revenue increases in both its core municipal and non-municipal divisions.

These increases were at healthy margins following the group's quick response to changes in the market and its investment in new product innovation.

New products included the kerbside food waste caddy which people keep outside their backdoor and bring out for collection by the council every week or fortnight.

In 2008 Straight brought out its own design for the two foot-high caddy. Prior to that it was supplying an Italian product.

Another successful innovation has been the inner caddy for wheelie bins which allows recyclables to sit in the top caddy and household waste goes below.

Much of the group's success has been driven by council contracts as local authorities try to cut down on landfill taxes.

Revenues from non-municipal customers were driven by increased garden and hardware sales to both UK and overseas customers.

Around four per cent of the group's revenues came from overseas customers in 2009, but this figure is expected to increase substantially in 2010. Non-municipal customer sales were also boosted by Straight's acquisition of Harcostar Garden Products last January. Harcostar is a long-established premium brand which supplies water butts, compost bins, watering cans and accessories.

Mr Straight said the performance of the group's Retail business has been transformed since 2008.

The group has reduced delivery costs and focused on fewer clients and products, largely eradicating its operating losses.

Straight said that the foundations have been laid for it to produce a big increase in sales in 2010.

In addition the decision by Government quango the Waste and Recycling Action Plan (WRAP) to withdraw from the English home compost bin market in October led to increased revenues during the fourth quarter.

These are expected to continue in 2010.

WRAP was responsible for buying compost bins and supplying them to local authorities, but now Straight is supplying them direct, effectively cutting out the middle man.

Cash balances at the end of 2009 remained at 1.6m.

Straight is the UK's leading supplier of specialist kerbside recycling containers as well as a key supplier of a broad range of waste and recycling container solutions.

It has supplied more than 12 million kerbside recycling boxes to local authorities across the UK, securing its position as the industry leader.

Straight has established a number of overseas sales channels and is now producing and selling water butts in Australia as well as strong initial sales in the US and Canada.

Last month it signed four contracts with local councils worth a total 1.3m to supply kitchen caddy food waste recycling containers and compostable food waste bags.

Hungry for acquisitions

Straight has embarked on an acquisition strategy over the years, vacuuming up or edging out competitors.

The company was established in 1993 by Jonathan Straight, initially as one man and a desk.

It listed on the Alternative Investment Market (AIM) in 2003 and acquired its main competitor Blackwall in 2004 for 6.75m.

In August 2007 it bought chewing-gum bin company Gummy Bins for an undisclosed sum.

Last January it bought Harcostar Garden Products for 400,000, which traded in the UK and Europe.

At the end of last year it started manufacturing in the US in order to service North American customers.