Nuplex's share price has reached levels not seen in more than a year, with the price doubling over the past six months as demand for its resin products quickly returns.Following another upgrade of its earnings forecast yesterday, the share price was up by
Nuplex’s share price has reached levels not seen in more than a year, with the price doubling over the past six months as demand for its resin products quickly returns.
Following another upgrade of its earnings forecast yesterday, the share price was up by 20c - or 6.5% - at 2pm today, to sit at $3.20, a price it last reached just over a year ago.
At that time, the price was spiralling down, ultimately dropping as low as 29 cents a share during the resin company’s recapitalisation.
But it has been steadily rising since then, cracking the $3 mark earlier this month, with the price now exactly double what it was following a 1:4 share split in June.
It is still a long way off the high of $6.47 reached in September 2008, shortly before a catastrophic slump in sales which raised concerns over debt covenants and ultimately led to the $110 million capital raising.
But even during its darkest hours, Nuplex management remained confident of an inevitable return of demand for its resins, which are used in a multitude of different products.
Despite that confidence, the company has still viewed the slow return of demand with caution and prudent forecasting, but has now improved its guidance twice in little more than a month as demand returned faster than expected.
Like many companies, Nuplex carried out a aggressive cost-cutting programme during the tumultuous 2009 and is now expecting its financial results to see the benefit of that.
Whether the share price is actually capable of reaching former highs remains to be seen, but at least Nuplex can take comfort in the fact it’s heading in the right direction.
