Australian plastic manufacturer SECOS Group delivered a maiden profit in its half year results, rounding out a bumper 12 months which saw the company’s shares gain 390%.

The gains were enough to place the company among the 100 best performing ASX-listed shares in the 2020 financial year.

Fund managers took notice. Both Annapurna Microcap Fund manager Stephen Scott and Armytage Private chair Lee LaFrate named SECOS group as one of their favourite companies in separate presentations for Reach Markets’ The Insider webcast.

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What’s more, SECOS Group executive chair Richard Tegoni expects this positive momentum will continue into the future.

“We expect to continue to be profitable moving forward,” he told guests of Reach Markets’ The Insider: Meet the CEO session.

The company’s focus is now on keeping pace with its expansion plans, with Mr Tegoni noting the company has increased production capacity in its Chinese plants and launched a new plant in Malaysia.

Plastic fantastic

SECOS Group manufactures biodegradable and compostable plastic products, including resins and films used to create certain types of packaging as well as their own in-house plastic bags.

Mr Tegoni noted the plastics industry is worth several trillion dollars, with more than 3.5 million tonnes of the stuff produced in Australia alone annually.

Roughly 1 million tonnes of this Australian-made plastic is single-use, meaning it serves a limited purpose before finding its way to landfill – before it degrades into smaller pieces (known as microplastics) and seeps into the food chain.

To combat the environmental impact plastic waste is currently causing, nations around the world – including Australia – are looking to reduce single-use and non-compostable plastic consumption.

Some countries have even taken steps to legally mandate the use of compostable plastic in packaging, and while that’s not yet the case domestically compostable plastics have been incorporated into the National Packaging Targets in a bid to reduce pollution.

As this transition takes place, SECOS Group is looking to replace non-compostable plastics and become a leading manufacturer in a more environmentally-friendly world.

Sources:

• Stockhead: The 100 best performing ASX stocks in FY21