Bin manufacturing company Straight plc has generated an underlying operating profit of £0.82 million in the 12 months to December 2013.

The news comes after the company sustained losses of more than £2 million in the years 2011 and 2012, following the acquisition of the injecting moulding firm Dyro Holdings Ltd (which traded as Powell Plastics) and the UK operations of Greek wheeled bin manufacturer Helesi. These acquisitions formed part of Straight plc’s move to manufacture most of its products in-house through ‘vertical integration’.

However, due to ‘much improved productivity’, new business contracts (such as that with Canterbury Council), and the launch of new products such as the 3BoxStack and the Food Waste Inner Caddy, the group’s earnings before interest, taxes and depreciated and amortisation (EBITDA) rose by almost 53 per cent in 12 months, from £0.75 million in 2012 to £1.99 million in 2013.

Despite this, due to ‘costs of £0.73 million, which includes the cost of replacing product supplied in 2011 and costs associated with refinancing the group’, after depreciation, the group recorded a small loss before tax of £0.13 million.

Overall, the group’s revenue up until 31 December 2013 was £26.1 million.

‘Two years of restructuring is carrying us forward with confidence’

Commenting on the results, James Newman, Chairman of Straight, said: "2013 has seen a significant improvement in the trading performance of the group, which has maintained its market-leading position.

"2014 has started well with a strong order book already in place. The board is confident that it will be able to deliver further profitable growth over the coming year."

Chief Executive Jonathan Straight (pictured above) added: "At the end of 2012, I said that the foundations of recovery had been laid. At the end of 2013, it was apparent that this statement has proved to correct as a significant improvement has been delivered. The considerable momentum created through two years of restructuring is carrying us forward with confidence."

One51 in talks for takeover

The news of the company returning to underlying operating profit are welcome, as the company is currently in due diligence talks with Irish bin maker One51.

On 14 February 2014, Straight plc announced that One51 plc had approached the company with an interest in acquiring the business.

The board agreed to enter negotiations and One51 had until 5pm on 14 March to either announce a ‘firm intention’ to make an offer for Straight, or that it did not intend to buy it. But, after the Straight Board requested an extension to this deadline, this was moved to 11 April.

Straight has since revealed that due diligence is ‘ongoing’, and any further announcement on any potential transaction will be made ‘in the near future’.

However, Straight has said that there can be ‘no certainty’ that this approach will lead to an offer being made for the company.

Read more about Straight plc and One51.