An ambitious acquisition strategy has helped container manufacturer Straight Group record an excellent financial performance for the year ending December 2010, the firm said today (March 28).
The unaudited preliminary results indicate that the Leeds-based company had achieved an 8.3% increase in revenue between the 2009 and 2010 calendar years rising from 28.32 million to 30.6 million over the past 12 months.
At the heart of this increase, Straight said that its ambitious acquisition strategy had played a key part in helping the company achieve the rise in revenue.
Over the past 12 months, Straight has purchased, and integrated, the UK operations of Greek-owned container manufacturer Helesi (see letsrecycle.com story).
And, it has also purchased injection-moulding firm Dyro Holdings, in a 2.9 million deal which enabled Straight to further enhance its footing in the container manufacturing and distribution market (see letsrecycle.com story).
The purchase of these firms and other strategic moves means that two-thirds of Straights products are now manufactured in-house. The previous business model was dependent on out-sourced manufacture.
Jonathan Straight, chief executive, said: Having embarked on a five year plan in 2010 with the goal of becoming a vertically integrated, brand-led environmental products and services company with an international footprint, significant steps forward have been made and, as a direct consequence, profitability has improved.
We now move forward as a strong and vertically integrated manufacturing and distribution business supplying diverse products to a broad range of markets. Our brand is gaining both strength and value and we intend to leverage this both organically and through further acquisitions.
Performance
In preliminary results, Straights said that revenue of its trade business had increased to 28.49 million – up from 27.14 million in 2009. This was attributed to sales continuing to grow across all our business lines, with, sales outside of the municipal market increasing by 12.2% to 6.51 million from 5.8 million in 2009.
The company said that growth was achieved in spite of challenging market conditions and was seen as a direct consequence of Straights acquisition and integration strategy.
And, it said that ongoing development work and a programme of cost reductions at Straights recently acquired main manufacturing site are expected to yield further improvements in 2011.
On the retail side of its work, Straight said it had delivered a second year of improved performance and was now profitable. The operating profit was 1,000, having operated a loss of 94,000 in 2009.
Furthermore, Straight said that retail sales have made an encouraging start in 2011 and are expected to increase significantly compared to 2010 levels as a result of the companys sole supplier position on the National Composting Framework. The company added that the retail business is forecast to make a more substantial contribution in 2011.
Overall, Straight said that improved overall performance has resulted in another year of substantial growth, with underlying operating profits increasing by 24.5% from 1.55 million in 2009 to 1.94 million in 2010.
After accounting for corporate development costs of 308,000, exceptional items of 90,000 this being a former Helesi UK warehouse premise – and finance costs of 65,000, Straight recorded a profit before tax of 1.47 million, which is actually down from the 1.56 million recorded in 2009.
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