Manufacturing firm British Polythene Industries (BPI) is not counting its chickens yet despite a strong performance for the six month period to 30 June. The group saw its pre-tax profits boosted by £2m to £15.1m, with profit after tax up from £10.2m to £11.4m. Borrowings also improved, reducing from £49.5m to £38.5m, and the group expects borrowings will remain at this level for the rest of the year. Despite the strong results, BPI warned that the second half "continues to look challenging as our suppliers seek raw material price increases and demand looks uncertain particularly in consumer facing markets." The group also admitted that, "in the last few months, volumes have been disappointing. The final outcome for June was below expectation and this continued through July with August looking similar. This may, in part, be due to certain customers de-stocking in anticipation of decreasing prices, but some of this reduction is certainly not. "Despite growth from new products and robust demand from the agricultural sector, we are budgeting for static or slightly reduced demand in the second half, and, if this is mirrored across Europe, trading conditions could become even more challenging. In these circumstances, it seems unlikely that polymer suppliers will achieve the increased prices that they are currently seeking."However, we anticipate delivering satisfactory results for the remainder of 2011." The group were keen to emphasise that, "around 70% of the group sales are to more resilient sectors of agricultural, retail food chain, health care and waste services," adding that "the actions taken to restructure our UK business and develop new products should enable the business to deliver acceptable results." This underlying confidence motivated the company to increase its dividend to 4.00p (2010: 3.65p), to be paid to shareholders in November, reflecting its intention to re-balance the payment of the annual dividends with around one third paid as an interim and two thirds as a final dividend.The share price was up 7.07% to 322.00p at 16:24. NR
