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Straight: we've put the problems of 2007 behind us

Published: 16 April 2008
Recycling business looks forward to 2008 with new orders and new products.
Straight: we've put the problems of 2007 behind us
Chairman executive James Newman said that the problems Straight plc suffered in 2007 is past its nadir and he is confident for prospects in 2008 on the back of a 'strong order book and a significant number of new customers'.

Mr Newman said: "2007 has not been a good year for the Group and I have to report that our trading performance is substantially below that of 2006 with a number of issues contributing to this disappointing result.

"However, the board believes that this result was only a temporary downturn in profitability and 2008 should see the trading performance improve towards pre-2007 levels."

Last year saw Straight tackle 'extreme' weather conditions, distribution problems and a relocation of its entire staff to one office in the centre of Leeds

Trading performance reflected its tough year. Turnover for the year ended December 31, 2007 was £23.6m (2006: £27.8m), a reduction of 15%.

The fall was a result of reduced retail sales, which were down 44% due to wet weather conditions, and increases in overhead costs as a result of fixed fees payable on a distribution contract, which commenced at the beginning of 2007.

Straight has now terminated the contract and has outsourced direct to consumer deliveries to a fulfilment house to bring costs into line and accommodate peaks or troughs in demand.

As a result of all the above changes to the distribution model, staff and location, the group incurred £476,000 of one-off reorganisation and redundancy costs.

On a more positive note, the group said its core trade business of waste and recycling containers remained strong, with sales for the year increasing by 2.6% to £19.2m (2006: £18.7m); and saw an improvement in overall gross margins to 20.8% (2006: 19.3%).

Developments

Chief executive Jonathan Straight said he was pleased with its programme of strategic developments, which include the release of new products for trade and retail markets.

The Group has developed a new consumer brand - BeGreen - for the retail trade.

It is also conducting 'active dialogue' with a number of companies as part of its acquisition strategy.

"2008 should also benefit from a full year's sales of the new products developed in the second half of 2007," Mr Straight said.

"The strength of the Group's market position in its core trade business and our strategy to reduce the impact of seasonality on the retail business gives the board cause for optimism for the coming year."

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