Input costs will weigh on IPL Plastics growth

INCREASING input prices will continue to put pressure on margins at IPL Plastics.

The company, formerly known as One51, saw revenue and profits grow in the second quarter, boosted by the effect of acquisitions. But it warned that its results are still being affected by price rises in resin, freight and logistics, and labour costs.

“Notwithstanding these input cost pressures, some of which are cyclical, we believe that as resin prices stabilise we will be able to realign our cost of sales to return our business margins to normalised profitability levels,” said IPL, which recently completed a stock market flotation in Canada.

“The company continues to experience strong growth in demand for its products... and we continue to organically grow revenues given the significant customer and market opportunities available to us.”

It also said it was looking at making further acquisitions. Revenue for the second quarter came in $178.3m, compared to $132.2m in the same period the year before, fuelled by the acquisition of a business called Macro Plastics.

The company made a net loss of $2.6m, however, compared to a $10.9m net profit the prior year, because of one-time costs associated with the IPO and a refinancing transaction. Shares in the business pared strong early gains but were still up almost 4pc in morning trading, at around CAD$12.29 each. That still lags the IPO price of CAD$13.50.

Chief executive Alan Walsh, pictured, said IPL had reduced its net debt “significantly” using funds raised in the IPO.