Bin manufacturer Straight has reported a strong operating performance for 2013, despite posting pretax losses of over £130,000.
The Leeds-based company said underlying profits before interest, taxes, depreciation and amortization increased more than 150% year-on-year to around £2m. This marked the return of the group to “operational profitability”, said Straight’s chairman James Newman.
The positive performance was the result of a significant reduction in operating costs on the background of a limited decline in sales (6%) following the disposal of a DIY business unit.
The considerable momentum created through two years of restructuring is carrying us forward with confidence
Chief executive Jonathan Straight
Straight said more efficiency was achieved thanks to new working practices in manufacturing operations and the outsourcing of non-core businesses.
“Much of the improvement in group performance resulted from the complete transformation of the factory,” said Straight chief executive Jonathan Straight (above).
“Two years of operational improvements continue to yield tangible results. The new cellular structure, continental shift patterns and conveyor systems have been highly effective.”
The company improved operating profitability was however impacted by some one-off charges that dragged the financial results into the negative, with a pretax loss of £133,000.
Straight had to set aside £400,000 for quality issues that arose with some unspecified products supplied in 2011. It also had to make a provision of £280,000 for a restructuring of its financing facilities.
Nonetheless, the pretax losses of 2013 were significant lower than the £1.6m of 2012.
Jonathan Straight painted a positive picture for the future. “At the end of 2012 I said that the foundations of recovery had been laid. At the end of 2013 it was apparent that this statement has proved to correct as a significant improvement has been delivered.
“The considerable momentum created through two years of restructuring is carrying us forward with confidence.”
On 14 February 2014, Straight announced that it had received an approach from Irish group One51 for a possible acquisition. One51 has until 25 April to make an offer or to say it no longer intends to do so.