Straight boosted by high order volumes

RECYCLING products firm Straight said its prospects for the second half of 2010 are better than the previous year on the back of a high number of orders.

In a trading update for the six months ended June 30 2010, the Leeds-based group said underlying group profits are expected to be similar to those for the half year to June 2009 and prospects for the full year are strong and the group's order book remains at the same high levels as at the beginning of 2010.

The group said its trade business has continued to perform well, although both profit and turnover were affected by reduced sales of low margin plastic wheeled bins prior to the group's acquisition of Helesi UK's business and assets at the end of March 2010.

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However, following this acquisition and based on orders taken for plastic wheeled bins to date, the group expects a recovery of these sales towards previous levels and anticipates that it will be able to achieve higher margins on these proprietary products going forward.

Performance of the group's retail business has continued to improve and it has now returned to profit. In a statement the company said: "Sales are significantly higher than in 2009 and have been buoyed by greatly increased local council sales with 82 per cent of English districts signing up to the group's home composting schemes following WRAP's exit from the market in late 2009.

The group said it continues to be cash generative, with cash balances at 30 June 2010 of 1.8m, compared to 1.6m at the end of December, and with borrowings and deferred consideration totalling 1.9m relating to the group's entry into proprietary plastic wheeled bin production.

It added: "The group continues to identify and progress additional opportunities for growth through vertical integration as well as through product and market expansion.

"Looking forward, the outlook for the remainder of the year is positive and the board is confident that it will meet market expectations for the full year."

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