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Plastics Capital sales growth picking up a shade slower than expected

"We expect to report that profitability has improved significantly from that reported in H1, with adjusted Ebitda expected to be approaching double that generated in H1," the company said

Plastics
Plastics Capital's business model is based on developing and mass producing proprietary, technical solutions for customers' problems

Plastics products group Plastics Capital Plc (LON:PLA) had mixed news for shareholders, reporting continued strong sales growth, albeit lower than expected in its Industrial Division.

Sales growth in the Films Division has been exceptional, the company said, while growth in the Industrial Division has improved in the second half of the financial year (which runs to the end of March), but not as much as expected when the group reported its interims in December.

READ: Plastics Capital: Impervious to cyclical blips, set for growth

As a result of the improvement in sales growth not coming through as fast as anticipated in the Industrial Division, the group now expects sales and adjusted underlying earnings (EBITDA) will be marginally below current market expectations.

"We continue to see very strong sales growth particularly in the Films Division, which has traditionally been our steadiest business area,” said Faisal Rahmatallah, the executive chairman of Plastics Capital.

“Our bearings business is picking up more slowly than we expected and this will impact this year's results; however, the overall rate of travel of sales and profits growth across the entire group is good and the board believes profitability will follow sales as investments we have made over the last two years bed down," he added.

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