Straight profits up despite drop in demand for wheeled bins

Revealing its six month interim figures for the period up to June 30, 2006, the Leeds-based firm said the first half of this year “has presented a number of challenges for the company.”

” A change in our sales mix resulted in turnover of 12.6 million being 10% lower than last year. “
– James Newman, Straight plc
In particular, Straight blamed reduced sales of wheeled bins for its drop in turnover to 12.6 million.

But, recording profits of 1.15 million, the AIM-listed company said it has emerged into the second half of the year “much stronger”, with water shortages prompting a sales boost for water butts.

Chairman James Newman revealed that the improved profitability of the company had been achieved because of a more profitable mix of container products being sold. The half-year saw gross margins rising from 15.4% to 23.2%.

Commenting on the figures, Mr Newman said in the company report: “A change in our sales mix resulted in turnover of 12.6 million being 10% lower than last year. However, a reduced proportion of sales of wheeled bins and a doubling of our fulfilment activities and contact centre work did result in an overall increase in profitability.

“Our new product ranges, with higher unit margins, have exceeded expectations,” Mr Newman added.

Demand
Chief executive Jonathan Straight revealed in his report that the company had failed to anticipate demand levels for its products, which “did cause some short-term operational issues”.

However, Mr Straight said his company had dealt with the problems “promptly”, and in doing so was now “stronger and better positioned to deal with such demand peaks going forward.

Contracts
While taking advantage of the summer's water shortages to boost sales of water butts, the company reported sales of kerbside containers remaining strong.

Mr Straight said: “Many of our customers now order smaller top-up quantities and this helped to drive profitability forward.”

Key contracts have been secured including the supply of wheeled bins and boxes to councils including Kettering and Manchester City. Orders of more than 100,000 wheeled bins have been secured through the Eastern Shires Purchasing Organisation, although this contract has presented some difficulties along the way (see letsrecycle.com story).

Elsewhere, Mr Straight highlighted a contract to supply 150,000 kitchen caddies for SITA's new food waste collection scheme in Bristol. And, he said the new kitchen composter product was proving a hit in Doncaster and Bradford.