Ardagh, the glass bottle manufacturer, has announced a major restructuring of its board, with Mr Paul Coulson of Yeoman International taking over as non-executive chairman.
The reshuffle is understood to have been prompted by a desire for change within two of Ardagh's biggest shareholders - Yeoman, which owns 8.65 per cent and Mercury Asset Management, which controls 29.09 per cent. The restructuring was announced along with interim results, which showed an 11.6 per cent increase in pre-tax profits to £3.04 million in the six months to the end of last December, on turnover up 6 per cent to £21.55 million.
However, the company warns that "the surplus capacity throughout Europe is beginning to impact on prices".
An interim dividend of 1.3p per share has been announced, up 12.6 per cent on last year.
While Ardagh has reported steady increases in earnings, the restructuring has been prompted by the company's general under-performance compared with other stock market companies in recent years and the restructuring of the industry generally.
This led to a desire on the part of the shareholders to see an injection of "new blood", according to sources.
"Naturally the new board will review all the strategic options and intends to ensure that Ardagh, which is well placed to exploit these opportunities, capitalises on them to the full," according to a statement from Mr Coulson.
Mr Coulson is chairman and chief executive of Yeoman and is taking over as Ardagh chairman from Mr Peter Murray, a former chief executive of the group, who is standing down.
Also joining the board are stockbroker Mr Brendan Dowling, accountant Mr Bernard Somers and former stockbroker Mr Ray French, who is nominated by Flavius, the vehicle 91 per cent owned by Mercury Asset Management clients, which holds the shares on its behalf. Flavius bought the stake formerly owned by the McGrath family.
The appointments have to be approved by an extraordinary general meeting of the company, to be held on March 25th, 1998. Mr Frank Davies, Ms Margaret Downes and Mr Ian Morrison remain on the board, although Mr Morrison will retire in July when his term of office expires.
Following the announcement that BTR has sold its 22 per cent stake in the company to the US company, Owens Illinois, its representative, Ms Kathleen O'Donovan, is resigning.
Mr Eddie Kilty will continue as group managing director.
The purchase by Owens Illinois of BTR's packaging division, including its stake in Ardagh, has sparked speculation about the future of the sector. US analysts have suggested that Owens Illinois will not be content to hold 22 per cent of Ardagh and could mount a bid for the company.
However, Mr Coulson has said the company is committed to growing profits and shareholder value.
Ardagh itself has indicated that if Owens Illinois is forced to sell some of its British glass interests, then it could be a bidder. However, as it is an associate of the US group, it is not clear whether this would get the approval of the British monopoly authorities.
If Ardagh does buy plant in Britain, it could lead to a modification of its planned £25 million investment programme in Ireland, some of which is based on planned exports to Britain. The changes in the British market "should provide opportunities which an efficient and profitable Ardagh can exploit", according to Mr Coulson.
The interim results show that a 6 per cent increase in turnover to £21.55 million contributed to a 5.5 per cent rise in trading profits to £3.05 million. Profit after interest and tax was up 11.6 per cent to £3.04 million.
It was "a very satisfactory performance and reflects some improvement in market demand and an increase in market share", according to a company statement.
However, surplus capacity throughout Europe is now starting to affect prices.
