Barlo, the plastics and radiator group, is seeking greater market share and will be introducing a new, higher margin radiator product under the Veha brand in the new year following a 75 per cent increase in pre-tax profits to €9.1 million (£7.2 million) in the six months to September 30th.
The company's turnover, at €104.3 million (£82 million), was 7 per cent less than the €112.5 million (£9.8 million) recorded in the same period last year, partly due to the sale of its British PVC company, Stanley Smith, in July for up to €6.7 million. The company said turnover in the radiator businesses was steady in a lower price environment and in challenging markets, compared to 8 per cent growth in the same period last year. Turnover in its plastics business, up by 11 per cent to €54 million, amounted to just over half of total turnover.
Dr Tony Mullins, chief executive, said the record interim operating profit of €9.8 million was now greater than the company's full-year operating profit in 1996 of £7 million. He said sheet plastic operations were showing excellent turnover and profitability growth, and Barlo was moving to dedicated manufacturing facilities. Operating profit in its radiator operations had more than doubled. Margins would be maintained despite rising raw material problems.
The geographic concentration of the radiator business in the west of Europe - the Republic, Britain and Belgium - was attracting the company's attention, he said.
The new radiator product, "the most efficient radiator made in Europe" would be sold in Germany, which remained a difficult market due to the slowdown in the construction industry. He added that its plastics packaging business, in Newbridge, Co Kildare, had recovered from the effects of a warehouse fire in May, 1998, and €5 million was being invested in new equipment there. Construction of the new factory was proceeding on schedule.
The company remained committed to strong organic growth but was open to making acquisitions.
Dr Mullins said the company balance sheet remained strong, with its gearing - debt as a percentage of shareholders' funds - reduced to 15 per cent at midyear, compared to 36 per cent in 1998. Net debt has been halved to €13.9 million following capital expenditure of €20 million in the past 12 months.
