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Nuplex CEO John Hirst - Source: ONE News -
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Nuplex managing director John Hirst says the business environment for the resins maker is "absolutely more comfortable" than it was six months ago.
It has been a rough ride for Nuplex after demand dropped sharply over the year, but the company looks to be back on track with its share price surging strongly after its annual result announcement on Thursday.
The company's shares closed up 19 cents to $2.35 on Thursday despite reporting a 65.4% fall in full-year net profit to $16.7 million.
"We've had a profitable year. We generated over $120 million of operating cashflow which was, as far as I'm concerned, the real headline of that particular result," Hirst says.
Earlier this year the company raised over $150 million after running into debt trouble, but Hirst says the outlook is increasingly positive with markets now more stable than they were six months ago.
He says while China is the only market showing year-on-year growth, the US and South East Asia markets are looking more settled, while Australia has been relatively resilient through the downturn.
New Zealand, however, continues to have weak demand with the downturn having shrunk the size of an already small domestic market.
Despite a tough year, the company announced on Thursday that it would pay a special dividend of 3.5 cents on top of its annual 5 cent dividend.
"We did not pay an interim dividend, but typically we've paid out over the past few years somewhere around 65% of our post tax operating profit. We didn't get the opportunity to do that this year, (so) we have redressed that situation by putting a special dividend out," says Hirst.
Hirst says the company is confident it will continue to be profitable and generate a strong cash flow and dividends in the future.
To do this, he says Nuplex will be running a tight ship to contain costs and will focus on increasing volumes to ensure its unit cost remains both manageable and competitive.
