Straight puts year of waste behind it
STRAIGHT, the supplier of recycling containers, has admitted that 2007 was “a poor trading year” but is optimistic that it can turn the corner thanks to a range of new products.
The Leeds-based company was forced to a issue a profits warning last month after revealing that a wet summer following torrential downpours and slow sales would hit its figures.
In a trading update today, the AIM-listed company said turnover for the year to December 31 was £23.6m, down from £27.8m in 2006.
Straight has been hit by reduced retail sales, 44% down from the previous year, as gardeners did not need to splash out on its water butts and other gardening products because of the heavy rainfall.
It said despite falls in garden products revenues, its core trade business of waste and recycling containers had traded positively, with sales for the year increasing 2.6% to £19.2m, up from £18.7m.
Straight said EBITDA (earnings before interest, taxes, depreciation and amortisation), before reorganisation costs, was likely to be £1.5m, down from £2.3m.
Reorganisation costs will be around £0.45m.
Looking forward, the group said it had a strong order book, year end balances of £1.6m despite high stock levels, and a number of new customers. It will also pull in revenues from sales delayed until the first half of this year.
New products include Steelybin, an 1,100 litre metal waste and recycling container, aimed at the trade and municipal markets, and the new 22 litre Kerbside Caddy for separate food waste collections.
It has also launched the Butt Butt, a bottom shaped water butt, and acquired chewing gum bin company Gummy Bins last August.
Over the last year, Straight also cancelled an outsourcing contract for retail deliveries and awarded it to a specialist operator. It also relocated its staff to one office in Leeds to improve customer service.
Staff numbers have also recently been reduced by a quarter following the outsourcing of the group's call centre activities and the closure of its warehouses.
Jonathan Straight, Straight's chief executive, said: “The group has developed a new consumer facing brand for the traditional retail trade. Under the BeGreen banner, orders for recycling and environmentally positive goods have been taken for delivery in 2008 from leading high street retailers, who are now becoming more interested in this sector.
“The board strongly believes that the group has put the problems of 2007 behind it and is confident that 2008 will deliver an improved trading performance for
the group.”
Straight was founded by Mr Straight in 1993 and grew to become the UK's leading supplier of kerbside recycling boxes. Mr Straight was named Ernst & Young Entrepreneur of the Year in 2006.
The company acquired Blackwall, the UK's largest supplier of home and water butts, in 2005.
Following the integration, Straight provides waste and recycling products to businesses, local authorities and the waste industry.
Straight is expected to announce its full year results on April 9. It still intends to pay a final dividend.
