Straight plc (AIM: STT), the Environmental Products and Services Group, is today providing an update on trading for the six months ended 30 June 2011 ahead of its interim results announcement on 27 September 2011.
Group sales increased in the first half of 2011 by 14% to approximately £15.0m (2010 H1: £13.2m). These have been assisted by contributions from the acquisitions made in 2010 and also by a significant increase in sales in the Retail Business. Despite this increase, overall sales have fallen short of management expectations.
As noted in the AGM statement of 27 May, polymer prices rose rapidly to unprecedented levels during the first part of 2011, peaking in May. These rises have impacted the profitability of certain contracts accepted prior to the rise in costs. This has also affected the performance of the recently acquired Powell Plastics operation.
Consequently, as advised in the AGM Statement, profitability for the first half of 2011 will be below management expectations. The Group expects to report a small headline operating profit for the first half, which after reorganisation costs and interest, will result in a loss before tax of approximately £0.1m.
Following a programme of remedial actions that is already substantially under way, the Group expects to return to profitability during the second half of the year.