BPI profits a pleasant surprise package

Published on Wednesday 1 July 2009 21:15

SHARES in Scottish plastic packaging firm British Polythene Industries jumped 13 per cent yesterday as it confirmed profits would be "comfortably ahead" of expectation for the first six months of the year.

In a statement to the Stock Exchange, the Greenock-based manufacturer said its half year results were ahead of the same period last year despite swallowing 2 million worth of restructuring costs after closing its factories in Stockton-on-Tees and Cowdenbeath.

BPI said profits had been achieved despite lower overall volumes and a difficult trading environment. It pointed to its improved performance on stable input costs, a reduced cost base and more favourable rates of exchange, along with "slightly better than anticipated demand" in some sectors.

The group's statement said: "Demand from the horticultural sector for packaging for garden composts has been better than for many years."

The company also said that while construction industry demand remained depressed, sales of packaging for bagged aggregates were up on expectations.

But BPI said its hay bale wrapping products would not meet the "exceptional volumes" achieved in last year's rainy summer.

The group also warned its suppliers were "pressing for increases" in polymer prices, but added it remained to be seen "how successful they will be."

Shares closed 18.75p up to 161p.