The Leeds-based supplier placed a 1,903,750 Ordinary Shares on the AIM at 80p per share – a 25% stake in the company, valuing the entire company at 5.5 million.
The news will be a boost to the recycling sector, which has had concerns in the past that container suppliers might not keep up with local authority demand as councils receive extra recycling funding from the government.
 Straight management: chief executive Jonathan Straight (centre) with financial controller Jim Mellor (left) and operations director Tom Musgrove |
Established in 1993, Straight plc – as it now becomes as a publicly limited company – offers a range of separately sourced waste containers. The company has provided over six million units to local authorities, waste management companies and community recycling groups in its 10-year history.
The company said the proceeds of the funding are principally to be used for development of the business. The bulk of the shares have been bought by institutions. Straight initially intends to fund the acquisition of new tooling, both to improve profitability on existing products and to allow the development of new products. The company believe this will help to secure control over new designs and the intellectual property rights in such designs.
Delighted
Chief executive Jonathan Straight said: “I am delighted at the excellent response to the Straight flotation on AIM. We now have the resources we need to drive this business forward, delivering best value to both our customers and our shareholders.”
He added: “This is a fulfilment of a dream that started years ago.” And, Mr Straight confirmed that the sale helped make him a millionaire several times over. “But of course its paper money really!”
The company also intends to invest in hardware and software systems to improve marketing and production efficiency and thereby assist in gaining a competitive advantage.
Straight has experienced year-on-year growth over recent years, with turnover growing from 2.5 million for the year ended 31 December 2000 to 5.8 million for the seven months ended 31 July 2003. Pre-tax profits for the seven months ended 31 July 2003 were 300,000.
Company directors believe that the prospects for continued growth in demand for its products and services are encouraging. The company is set to benefit from a fresh wave of local authority spending as DEFRA distributes the next 135 million portion of its waste minimisation and recycling fund next year.
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