Recycling firm Straight insisted it is well placed to deliver “a much improved financial performance” in 2013 after reporting a doubling in annual pre-tax losses in 2012.
The Leeds-based maker of kerbside recycling containers reported a pre-tax loss of £1.6m in the year to December 31, but said it has returned to profitability in 2013.
Straight’s chief executive Jonathan Straight said: “A great deal has been achieved during the last year in terms of putting the business on a stronger footing for the future.
“Legacy issues have been removed as a result of our work throughout the period and the value of improvements made within our manufacturing facility has been proven effective.”
He added that the company has shown it is able to profitably manufacture its own products and that there is a strong market for its goods and services.
Almost two thirds of the products the group supplies are now produced in Straight’s own factory.
“Considerable work has been done to lay the foundations of recovery, the benefits of which we are now beginning to see, with trading in the current year much improved and the group having returned to profitability,” said Mr Straight.
James Newman, Straight’s chairman said: “The group has maintained its market leading position and is now well placed to deliver a much improved financial performance in 2013 and beyond.”
The group said that following strong first half revenue growth, sales in the second half of the year were hit by delays in the allocation of Department of Communities and Local Government (DCLG) funding for food waste and other recycling schemes.
This was completed late in November and the group said it is now providing a solid platform for the current year and a strong order book.
Mr Newman said that the changes in manufacturing working practices that were introduced at the end of June have “transformed” the group’s manufacturing performance and led to improved group gross margins.
Group revenue was flat at £27.8m and underlying operating profits fell to a loss of £240,000.
Straight said its performance in the second half was undermined by delays of almost four months in the allocation of DCLG funding and this shouldn’t be repeated in the future.
The group will not pay a dividend based on the 2012 results, but said it will review this in 2014 in light of the expected improvement in performance and the commitment to a policy of paying dividends.
The group recently signed a new three year funding agreement.