Plastics Capital (LON:PLA) is a company which I follow closely, as myself and David Stredder interviewed the CEO 6 months ago. My impression was (and remains) that this is a good quality, niche company, well managed, but with a tad too much debt (albeit being reduced steadily). Growth has proved somewhat elusive in recent years too. Incidentally, we would like to do more interviews (of quality companies only!), but so far we've found that the ones we would like to interview seem camera-shy! Such is life.

Their Q3 trading update today (PLA has a 31 March year end) is "broadly in line" with market expectations. Broker consensus is for 11.6p EPS this year, so that corresponds to a PER of 6.3, which looks cheap.

Net debt was £8.6m when last reported at 30 September 2012, which is equivalent to about 31p per share, so adding that to the share price of 72p takes us up to 103p Enterprise Value, and a cash/debt neutral PER of 8.9.

I know this is a crude way of doing things, since it doesn't adjust out interest cost from the EPS figure, but it's a quick & easy way of getting to an estimate of how the PER really looks once you adjust out the net debt, which I find very useful.

I believe that PLA might gradually re-rate as the debt steadily reduces, so whilst the shares are unlikely to set anyone's portfolio on fire, they might prove a useful long-term holding? The dividend is forecast to grow from 1.3p to 2.0p this year, so if that happens, then the yield will be starting to matter at 2.8% yield.


There has been a flurry of trading statements from marketing groups lately, and today it's the turn of Next Fifteen Communications (LON:NFC) to give an AGM trading update for the period from 1 August 2012, which I'm pleased to see they have issued before the actual meeting, so everyone has a chance to read and digest it simultaneously, before the market opens. This strikes me as best practice, and really all trading statements should be issued at 7 a.m. for all companies. Intra-day profits warnings are every investor's nightmare, as it's just a race for the exit, won by whoever happens to…

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