Contrasting fortunes for Straight
RECYCLING group Straight said “contrasting fortunes” for the first half had seen a strong performance in its trade business overshadowed by its loss making retail arm.
Announcing its interim results for the six months ended June 30 the group said trade sales had increased by 11% to £12.1m compared to £10.9m the previous year.
However the group’s retail business has traded at levels significantly below management expectations due to a second poor summer and unfavourable economic conditions.
Sales in the first half were £1.4m compared to £3m last year.
Overall the Leeds-based group, which warned on profits in July, reported a pre-tax loss of £936,000 pounds, compared with a profit of £763,000 the previous year.
Turnover remained “stable” down slightly to £13.5m compared to £13.9m in 2007.
In response to the problems in the retail business, Straight has embarked on a strategic review to eliminate “loss making activities” including taking the decision to discontinue its Evengreener mail order catalogue which will operate as a web-only brand with a “significantly reduced” range of products.
The group said that only those activities “which the board considers to be of strategic importance to the group will continue beyond the end of 2008.”
Chief executive Jonathan Straight said that the board had had to take a number of tough decisions but it was focussed on concentrating on the more profitable trade division of the business.
The group said that it is in a strong cash position and it is embarking on an accelerated programme of new product development.
It expects to see an improved performance in the second half following the launch of the new products, and strong sales from its existing lines within its trade division.
Food waste is a particular area of growth for the company with the first products in the new range of Ecosort office recycling products on the market.
Demand for Steelybin, the metal wheeled waste and recycling container, has also exceeded expectations and is expected to form a large part of the group’s revenue stream going forward.
Mr Straight said: “The core trade business in environmental container solutions is in excellent shape and a small, lean and focused retail business will make a positive contribution from 2009. The trade side is thriving and forging ahead and despite having to take tough decisions we can now focus on more positive areas of the business.”
The company cut its interim dividend to 1p from 1.25p last year.
Straight was established in 1993 to supply container solutions for source separated waste.
The company grew to become the UK’s leading supplier of kerbside recycling boxes as well as a key supplier of other types of waste and recycling container solutions.
