Trading Statement

RNS Number:7120P
Straight PLC
18 January 2007


18 January 2007

                                  STRAIGHT PLC
                                  ("Straight")

Straight plc (AIM: STT), the Leeds-based supplier of recycling containers, is
today providing an update on current trading prior to entering its closed
period.

Trading has continued broadly in line with expectations with turnover for 2006
increased by more than 12% to over #27m. Whilst gross margins have improved, the
unexpected and unprecedented increase in sales of waterbutts, which continued
throughout 2006, has resulted in higher than anticipated distribution and
administrative costs. These were as a result of ensuring that customer service
levels were maintained during the periods of peak activity. Profit before tax
and goodwill is still expected to be at least #2.4m before these one-off costs
of around #0.5m.

In view of the increased scale of our retail and bulk distribution, the Board
has now agreed to outsource these activities to DHL. DHL will also take over the
management of our warehouse and will provide additional capacity in line with
the growth of the business. Coupled with an investment in a new IT platform for
the retail business, these arrangements will deliver the improved performance,
scalability and responsiveness that were not possible during much of 2006, as
well as the a more predictable cost base and the ability to benefit from cost
savings going forward.

In April 2004 we entered the materials handling market with our partner the
Rehrig Pacific Company. Since this time we have achieved considerable success,
although margins have been tight. We expect the market for larger contracts to
remain competitive and so in order to maximise our profitability in this sector,
we have agreed with Rehrig Pacific to change the nature of our relationship. The
formal agreement between the parties has now been terminated allowing Straight
to selectively pursue opportunities alone in this market. Current projects,
including the previously announced British Library contract, will continue as
before. These changes will have minimal impact on revenue or margins in the
medium term.

An additional benefit of this restructuring is that a number of kerbside box
moulds, formerly licensed to us by Rehrig Pacific, have now been transferred to
our ownership. Based on 2006 trading levels, this will save at least #50,000 per
annum in royalty payments.

The Board is pleased to announce the appointment of Mark Halford as Operations
Director. Mark was previously a general manager at Polimoon, one of our key blow
moulding partners, and has a wealth of experience in our industry. He joined us
in July 2006 as Director of Operations and has overseen the transfer of our
logistics operations to DHL.

We are also pleased to announce the award of a new contract to supply the Waste
Resources Action Programme (WRAP) with an anticipated #2.6m of home compost bins
during 2007. At the end of 2006 our trade sales order book stood at #7.6m, a
solid foundation on which to build in the current year.

For further information contact:

Straight plc
James Newman/Jonathan Straight  -  0113 245 2244 or 07850 672727

Simon Mountford Communications

Simon Mountford/Alison Crawford - 01904 520162



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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