Flush with cash, resin-maker Nuplex to keep eyes open for more buys

The sale of one business and the purchase of two others has seen profit and revenue surge at listed resins company Nuplex, with the chance of more acquisitions to come.

Net profit of $62 million for the year was up from $33.1 million, including $24.7 million from the sale of Environmental Services last year.

Revenue of $1.3 billion was up from $928.5 million, mostly because of a full year's contribution from the Netherlands-based Coatings Resins business bought from Akzo Nobel.

Nuplex's business includes making resins and materials for manufacturers of products including paint, ink, adhesives and textiles.

Managing director John Hirst said Nuplex would continue to make acquisitions to drive critical mass, access high-growth markets or when technologically advantageous.

"We're in a position to go ahead with those things when the opportunities arise."

Earnings were expected to grow steadily, although demand in most markets - with the exception of Asia - was likely to be flat.

Trading profit was up 27 per cent at $103.4 million, with the contribution from the acquisition of Australian material supplier PML Holdings fractionally ahead of that lost from the sale of Environmental Services.

First NZ Capital analyst Jason Familton said the result was positive, above guidance and well received by the market.

Nuplex's share price closed up 19c yesterday at $6.49.

Some operations in China, Britain and Brazil were not profitable, reducing the bottom line by $6.6 million.

Hirst said: "As we turn these businesses around, it will certainly start having some impact in the new financial year ... and we expect it's probably going to take another two years to get all of those fully turned around."

The benefits of cost rationalisation would be felt in the 2008 financial year, with non-recurring operating expenses of about $2 million to $4 million expected in the coming year.