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Restructuring helps BPI beat polymer price increases

British Polythene Industries (BPI) has reported a 44% rise in pre-tax profit as its restructuring helped offset the impact of polymer price increases.

BPI said turnover for the six months to 30 June rose by 13% to £261m as due to increased volumes and the passing on of input cost increases to consumers.

Pre-tax profit increased 44% to £13.1m that BPI said was due to the restructuring of operations and the sale of its Stockton site for £6m.

Operating profit for the UK and Ireland fell by 27% to £5.7m due to increased raw material prices.

"I think volumes will remain sound but the situation for the rest of the year will depend on the respite on polymer prices. We remain confident and are encouraged by the performance in a difficult period."

The changes to the UK operating base are expected to be completed by the end of the year.

Mainland European profits increased while in North America they remained the same as last year.

Langlands highlighted the fact there had been a "significant differential between polymer prices in Europe and those in North America and the Far East".

"We do think there must be some easing back, but it does remain exceedingly difficult to recover prices. It takes time and there is always some lag."

In today's trading statement, BPI said it was continuing to cooperate with the European Commission and Office of Fair Trading investigation into the agricultural films market.

BPI HALF-YEAR RESULTS
(£m)

Turnover 260.8 (231.4 in 2009)
Profit from operations 15 (11.7)
Profit before tax 13.1 (9.1)
Profit for period 10.2 (6.1)