Half Yearly Report

Plastics Capital plc

("Plastics Capital", the "Company" or the "Group")

Interim Results for the six months ended 30 September 2013

Plastics Capital plc (AIM: PLA) the niche plastics products manufacturer, announces the Company's interim results for the six months ended 30 September 2013, which are in line with management expectations.

Financial highlights

* excluding amortisation, exceptional costs, unrealised foreign exchange translation and derivative gains / losses.

+ applying an expected tax charge of 15% and based on the weighted average number of shares currently in issue in the year.

Financial Highlights

· Earnings before interest, tax, depreciation, and amortisation resumes upward trend;

· Improvement in operating profit (before exceptional costs and amortisation) margin from 11.5% to 11.9%;

· Net debt reduced by £0.5m to £8.1m; and

· 7% underlying EPS growth - before one-off foreign exchange gain in H1 2012-13

Operational highlights

· Revenue growth resumes - 4.1% growth on both H1 and H2 2012-13;

· Mandrel sales up 56% on same period in prior year;

· 10 new key account wins underpin sales growth going forward;

· Major investment in new capacity for industrial films completed successfully;

· Chinese factory for machined bearings brought into production on time and budget; and

· Post period end contracts exchanged to acquire Chinese creasing matrix competitor, Shengli.

Commenting on these results, Faisal Rahmatallah, Executive Chairman, said: "I am pleased to report that growth in sales and in underlying profitability have both resumed. In the half year, demand from Europe has improved, new business has contributed to growth across the Group, additional sales and marketing investment has continued and new capacity has been added for both industrial films and machined bearings. We have also recently announced the acquisition of Shengli, the leading Chinese producer of creasing matrix, which is a major step forward in this region. The Board expects the Group to trade in line with expectations for the rest of the year."

Plastics Capital plc Tel: 020 7326 8423

Faisal Rahmatallah, Executive Chairman

Nick Ball, Finance Director

Cenkos Securities plc Tel: 020 7397 8900

Stephen Keys

Camilla Hume

First Columbus Tel: 020 3002 2074

Katrina Perez

Marianne Woods

Walbrook PR Ltd Tel: 020 7933 8780

Paul Cornelius [email protected]

Helen Cresswell [email protected]

Notes to Editor

Plastics Capital manufactures innovative plastics products for global niche markets. The Group has four factories in the UK, one in Thailand and sales offices in the USA, Japan, China and India. Approximately 60 per cent of sales are sold outside the UK to over 80 countries worldwide. Production is concentrated in the UK where significant engineering know-how and automation underpins the Group's competitiveness. The Group has approximately 300 employees.

Further information can be found on www.plasticscapital.com

Chairman's Statement

Financial Review

These results reflect improving performance driven by sales growth and the operational gearing inherent across the Group. Revenue growth has resumed on the back of some partial demand recovery from customers in Europe and we have continued to win new business, which has more than compensated for some relatively minor losses.

Compared to H1 2012-13, on an underlying basis (excluding for the one-off realized foreign exchange gain in H1 2012-13), the Group has:

· Increased sales by 4.1%;

· Increased profit before tax by 4.4%;

· Increased earnings per share by 7.0%; and

· Reduced net debt by £0.5m to £8.1m.

To see the improvement we have achieved over the last 12-18 months, it is helpful to compare sequential half year periods (H1 2013-14 against H2 2012-13). On an underlying basis the Group has:

· Increased sales by 4.2%;

· Increased profit before tax by 18%; and

· Increased earnings per share by 19%.

Sales have grown primarily because of improved demand in our mandrels and films businesses; sales to European mandrel customers have recovered somewhat and new business activity, based on the provision of technical service, has produced good results. Elsewhere sales have been slightly disappointing, being affected either by prior period overstocking or customer delays in the commencement of many projects affecting start of production dates.

Operating profit (before exceptional costs and amortisation) has improved from the 11.5% achieved in H1 2012-13 to 11.9%. This reflects the operational gearing inherent in the Group and an improved product mix in most of our business areas. The improvement would have been greater but for continued investment in business development activity across the Group. Sustaining good margins remains a priority for all our management teams and demands that the product-service mix that we offer our customers has a genuine competitive advantage.

Profits before tax and earnings per share have fallen back relative to the same period last year. However, this is entirely attributable to a one-off gain we made last year when converting Euro debt into sterling. Both profits before tax and earnings per share continue to benefit from reducing interest costs as our debt reduces and from lower tax charges due to the reducing rate of corporation tax and R&D tax credits, which the Group uses to good effect.

Debt has reduced by £0.5m. This is less than the recent past, as we have now chosen to invest for future growth, spending approximately £1m in total on:

· A new line for our films business;

· The fit out of our machine bearings factory in Shanghai; and

· New tool-room equipment to improve capabilities and capacity for introducing new bearings projects into production.

These are all important initiatives to enable future growth.

The Company is pleased to announce that it intends to pay an interim dividend of 1.00p to all shareholders on 30 December 2013 in respect of the period ended 30 September 2013. The record date for the dividend is 13 December 2013 and the associated ex-dividend date is 11 December 2013.

New Business

New business, which comprises business won minus business lost over the prior twelve months, has contributed 4.8% to sales over the period. All our businesses are doing well in the area of new business - although we believe they could still do even better. Across the Group the sales and marketing focus is on providing technical solutions to our customers' problems - good examples of this are as follows:

· In mandrels, development of new material compounds that do not bond to the rubber hose and so allow easy ejection from the rubber hose after use;

· In creasing matrix, development of a new super-durable matrix which allows cost effective long box runs and also allows hand chamfering of the matrix to aid machine operability; and

· In bearings, the development of a standard platform for CCTV manufacturers to enable our customers to achieve lower cost design and faster product development/production.

Ten new key accounts (customers with annual sales potential exceeding £100,000) have been converted during the first six months of the year, including:

· First production sales of mandrel at Caterpillar in Europe;

· The first confirmed project for the production of automotive instrument control panel bearings - this is a major new application area for plastic bearings which we believe has high future sales potential.

The pipeline of new business remains strong - we estimate that £5.1m of revenues worth of business has been converted from pipeline but is not yet into full production. The time window for these projects to move into full production volumes is approximately between six months and four years.

Operations and Costs

Day-to-day operations have run smoothly, with excellent quality performance and good service standards. Our primary operational focus has been on implementing some significant investments in capacity and capability improvement. The most significant has been the installation of a new line for the production of high strength industrial packaging films. At a cost of £0.75m, this project was completed successfully in September with only a few minor teething problems and we can already see that it will produce excellent results in terms of new film types and formulations.

We have also completed the initial phase of setting up a production facility for machined bearings in Shanghai. Most of the bearings we currently produce are injection moulded, which is particularly suitable for high volume, highly engineered bearings. In developing markets, such as China, requirements are often for lower volumes with faster or lower cost development; which lends itself to machined bearings. In time, we expect customers who purchase machined bearings to start to recognise the benefits of injection moulded bearings and will be encouraged to "trade-up".

We are now starting to produce machined bearings in Shanghai, initially for demand we have elsewhere in the world, but shortly we will start production for the Chinese market and plan to gradually develop this market.

A substantial investment is also underway to improve our tooling capability in the bearings business. A critical success factor in converting business is the speed and cost with which we can develop tools to bring injection moulded bearings into production. Doing this requires state-of-the-art tooling machinery and equipment in the right quantity. The investment we are undertaking is designed to enable the Company to reduce the average tooling lead time from 26 weeks to 12 weeks allowing us to more than double the amount of tools we are able to bring into production per year.

Acquisitions

Post the period we exchanged contracts with the owners of China's leading producer of creasing matrix to buy the company, called Shengli, for approximately £2.2m. Shengli has 30-35% of the Chinese market for creasing matrix and as such is a very attractive target for us. Together with our current share of the Chinese market we believe this will put us in the number one position in China, as well as giving us the ability to achieve a number of important synergies. Most importantly, this acquisition will scale up our activities in China significantly and will enable us to establish a management infrastructure in China. This will significantly help to drive growth in this very important developing market. We anticipate that this acquisition will close at the end of the calendar year and will be marginally earnings enhancing in the first year.

We continue to work on further acquisition opportunities and are hopeful that we will be able to deliver additional strategic transactions over the next 6-12 months.

Outlook

We expect to see a gradual improvement in sales and profitability as the year progresses. We are also confident that new business activity will bring significant benefits in both the near term and longer term. The acquisition of Shengli should also bring a small contribution for the second half year. Our Board remains confident about the future growth of the Group.

Faisal Rahmatallah

Executive Chairman.

Plastics Capital plc

Consolidated Income Statement

for the six months ended 30 September 2013

Plastics Capital plc

Consolidated Income Statement (continued)

for the year ended 31 March 2013

Plastics Capital plc

Consolidated Balance Sheets

Plastics Capital plc

Consolidated Cash Flow Statements

Plastics Capital plc

Consolidated statement of changes in equity

1 Basis of preparation and accounting policies

Basis of preparation

The interim financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs as at 30 September 2013 that are effective (or available for early adoption) as at 31 March 2014. Based on these adopted IFRSs, the directors have applied the accounting policies, as set out below, which they expect to apply to the annual IFRS financial statements for the year ending 31 March 2014.

However, the adopted IFRSs that will be effective (or available for early adoption) in the annual financial statements for the period ending 31 March 2014 are still subject to change and to additional interpretations and therefore cannot be determined with certainty. Accordingly, the accounting policies for that annual period will be determined finally only when the annual financial statements are prepared for the period ending 31 March 2014.

Accounting policies

The accounting policies applied to the Interim Results for six months ended 30 September 2013 are consistent with those of the Company's annual accounts for the year ended 31 March 2013.

Going concern

The Financial Reporting Council issued "Going Concern and Liquidity Risk: Guidance for Directors of UK Companies" in October 2009 and the Directors have considered this when preparing the financial statements. These have been prepared on a going concern basis and the Directors have taken steps to ensure that they believe the going concern basis of preparation remains appropriate.

2 Reconciliation of financial highlights table to the consolidated income statement

* excluding amortisation, exceptional costs, unrealised foreign exchange translation and unrealised derivative gains/losses

+ applying an expected tax charge of 15% and based on the average number of shares in issue in the year

3 Operating segment information

The following summary describes the operations in each of the Group's reportable segments:

· Packaging - includes creasing matrix and films

· Industrial Products - includes hose mandrel and plastic bearings

3 Operating segment information(continued)

Reconciliation of reportable segment revenue

Reconciliation of reportable segment profit

4 Exceptional items

5 Financial income and expenses

The net foreign exchange gain represents unrealized and realized gains arising on the translation of foreign currency loans back into Sterling.

6 Taxation

The taxation charge is calculated by applying the Directors' best estimate of the annual tax rate for the profit for the period.

7 Dividends

The Directors recommend the payment of an interim dividend of 1p per share (30 September 2012: 0.66p).

8 Earnings per share

9 Accounts

Copies of the interim accounts may be obtained from the Company Secretary at the Registered Office of the Company: St Mary's House, 42 Vicarage Crescent, London, SW11 3LD.

10 Post Balance Sheet Event

On 31st October 2013, Plastics Capital plc announced it had conditionally agreed to acquire Beijing Higher Shengli Printing Science and Technology Co., Ltd, a leading Chinese manufacturer of creasing matrix.

The acquisition is to be satisfied in cash through the issue of 2,700,000 new Ordinary Shares to new and existing investors in the company to raise £2.7 million at a placing price of 100p representing a discount of 8.7% to the closing mid-price on 30 October 2013.