Radiator and plastics group Barlo has announced a 96 per cent increase in half-year pre-tax profits to £5.8 million as the benefits of recent acquisitions in the plastics division kicked in.
The results include an exceptional gain of £1.7 million, which arose on the insurance claim for the fire at the group's Newbridge facility last May. Barlo plans to reinvest the proceeds from the claim in a new factory in the Newbridge area. The new facility is subject to regulatory approval and employee agreement and the details have yet to be finalised, chief executive, Mr Tony Mullins said.
The company said turnover rose by 53 per cent to £88.6 million in the first half to end-September, boosted by a full six-month contribution from German-based, Resart, and the Barcelona-based, Critesa, both of which were acquired from BASF last November.
Revenue from the plastics division, which also benefited from lower polymer price trends, more than doubled in the first half to £55.2 million from £27 million as a result of the acquisitions, Barlo said. Turnover in the radiator division was up 8 per cent at £33.4 million. The market for radiators in Ireland remained strong but markets in Britain and mainland Europe were mixed.
"Notwithstanding these conditions, the panel businesses have performed satisfactorily in the first six months and pressure on selling prices has been compensated to some extent by internal cost efficiencies," Barlo said.
Continental Europe accounted for half of total turnover and the group said it aimed to continue its expansion there. It already has a factory in the Czech Republic and is interested in further expansion in Eastern Europe.
Mr Mullins said Barlo could comfortably spend £30 million on an acquisition as its balance sheet was strong. Barlo's gearing - or debt as a percentage of shareholders' funds - was 36 per cent at September 30th compared to 26 per cent a year earlier, reflecting the cost of the acquisitions. Mr Mullins also said this was always the high point in the year for debt.
The company's business also picks up in the second half of the year as the demand for radiators increases and Barlo said it was confident that satisfactory growth would be continued over the balance of the year in the absence of unforeseen events.
The company, which announced a 22 per cent increase in its interim dividend to 0.55 pence per share, reported a 30 per cent rise in earnings per share to 2.15p. However, the results had little impact on its share price which rose just 1p to 65p.
