One51 ‘cautious’ over UK economy as Brexit hits profits

Statement from plastics company cites ‘strong performance’ of Canadian division

One51 chief executive Alan Walsh said the company would adopt a “cautious stance” on the UK economy. Photograph: Dave Meehan

One51 chief executive Alan Walsh said the company would adopt a “cautious stance” on the UK economy. Photograph: Dave Meehan

 

Plastics manufacturer and waste manager One51 is to adopt a “cautious stance” in relation to the UK economy as the decline in the value of sterling has adversely impacted earnings.

In a trading update, the company, which reported a 51 per cent increase in group revenue to €214.6 million for the first half of the year, said it “continues to perform satisfactorily”.

It said this was driven by a “strong performance” from IPL, a Canadian plastics company in which the Irish group took a majority stake last year. It “continues to experience” strong demand for its products in the North American markets it serves.

The group recently announced the acquisition of Encore Industries in the United States together with a major capital investment programme for a total combined investment of CAD$88 million (€61.3 million).

“These investments will enable IPL to accelerate its geographic expansion and customer reach across Canada and the United States to meet significant and growing market demand for its products,” said the trading update.

“The group, which derives circa 33 per cent of its earnings from the UK, shares wider market concerns around the outlook for the UK economy post the Brexit vote.

“The decline in the value of sterling has adversely impacted group earnings. Notwithstanding the adverse impact of the decline in the value of sterling, the group expects to perform in line with market expectations for 2016.”

Investment programme

Alan Walsh

“We have successfully integrated IPL into our plastics division and the recent acquisition of Encore together with the capital investment programme represents a significant step forward in One51’s continued growth in the North American plastic packaging market.

“We continue to maintain a cautious stance around the outlook for the UK economy as our UK earnings are adversely affected by the decline in the value of sterling in the wake of Brexit,” he said.

“Despite these challenges, we remain confident in the ability of our core operating divisions to continue to grow profitably into the future.”