Dividend up 11% as BPI sees investment boost profits

Packaging specialist British Polythene Industries (BPI) proposed an 11 per cent hike to its final dividend yesterday after a pick up in its European markets lifted profits.

Mortgage approvals are on the increase, new figures from the Bank of England show. Picture: Getty

The Greenock-based firm said investment in its factories improved profitability, while strong demand for agricultural products on the Continent more than offset the loss of a UK bread bag contract. Pre-tax profits for 2013 grew to £18.5 million, from £17m a year earlier, on sales 6 per cent higher at £508m.

BPI plans to pay out a 10p per share dividend on 14 May, up from 9p a year earlier, taking the total for the year to 14.5p.

Chief executive John Langlands said the firm would keep investing around £20m a year to upgrade its factories.

He said the group was increasing its capacity to roll out plastics for the agricultural market and replacing older equipment to concentrate in higher quality, more modern products.

An expected fall in raw materials prices did not happen last year, but Langlands said he thought the US shale gas revolution would have a serious impact on the price of the polymers used to make plastics by around 2017.

Last year the company bought UK firm Flexfilm Group, and Langlands said it is on the lookout for more acquisitions.