Nuplex pulls off stunning turnaround

By Christopher Adams

Photo / Kenny Rodger
Photo / Kenny Rodger

Nuplex Industries has pulled off a remarkable turnaround from its troubles of early last year.

The listed resins manufacturer yesterday reported a record full-year profit of $64.2 million for the year to June 30 - a 285 per cent improvement on the prior period.

But Forsyth Barr analyst John Cairns said rising raw material costs could have a negative impact on the firm.

"The big issue - as raw material prices increase and [Nuplex] works through the lower-cost inventories and has to buy more expensive inventories - is how that's going to impact the margin," he said.

Cairns said Nuplex was also at the mercy of the industries it supplied.

"Resins are used as an input into a whole range of industries and economic activity at the moment is far from certain."

Nuplex reported revenue down 2.3 per cent to $1.45 billion, while operating cash flow was $104.7 million, down from $123.2 million in 2009. The group's total liabilities were reduced by 8.4 per cent on the previous year to $481 million.

"The group's in a good position with its debt levels down," said Cairns.

Nuplex chief executive Emery Severin said the increased profit, achieved during a period when economic conditions were volatile and difficult, highlighted the strength of the business.

Asia and Europe were the "stand-out" performers of the firm's various global markets.

Nuplex's share price closed up 20c at $3.15 last night.

- NZ Herald

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