Jefferson Smurfit Group has ruled out a return to the stock market for at least 12 months, citing difficult conditions in the European print and packaging market.

The group, which was taken private by Madison Dearborn in a €3.7 billion deal in 2002, yesterday published results for 2004. Losses for the year were €34.5 million, down from €67.3 million.

Mr Gary McGann, group chief executive, said the key driver for the group - which is highly leveraged as a result of the 2002 deal - was sustainable cash flow rather than accounting profit.

He said the group had increased its free cash flow from €178 million to €187 million, through a combination of asset sales and cost cutting. Some €60 million of costs had been taken out of the business in the past year, he said. Earnings before interest, tax, depreciation and amortisation were €606 million before exceptional items, compared with €627 million last time.

Mr McGann said the outlook for the current year was a repeat of 2004, when difficult conditions in Europe were offset by a strong performance in Latin America. Against this background, it was difficult to see the group returning to the stock market, he added. Smurfit had been tipped as a possible IPO (initial public offering) candidate this year after a three-year restructuring which saw it exit the US and focus on Europe and Latin America.

The sluggish performance of the major European economies was having a direct effect on Smurfit's performance, said Mr McGann, adding that the company was "fairly well a proxy for GDP growth".

The company's Latin American operations were performing well, but the strength of the euro had a negative impact when US dollar earnings were translated.

He said that a return to the stock market was "not on the horizon" given the difficulties in the European business. It would be very hard to interest investors in the business "without visibility" on this issue.

Mr McGann added that there was no immediate pressure from Madison Dearborn for an exit. The US venture capital group had built a strong position in the market and had a history of patient investment, he said.

Along with the other shareholders - including chairman Dr Michael Smurfit - the US fund will benefit from a €300 million share buyback funded by a €670 million refinancing put in place last month. Dr Smurfit, who has a 7.4 per cent stake in the group will receive €22 million, while Mr McGann will get some €600,000.

The refinancing will have no significant impact on the group's indebtedness, which stood at €2.97 billion at year end. It will bring down the group's interest bill, which at just under €300 million last year exceeded operating profits of €294 million.

Smurfit will concentrate on cutting costs and improving efficiencies in its European operations, said Mr McGann. He said the group hoped to emulate its experience in Latin America where a strong focus on costs during the downturn had allowed it reap benefits in the eventual upturn.