Restructured Barlo reports £6.85m profit

BARLO, the engineering and alas tics group, has announced results, broadly in line with market expectations. Profits before tax for the year to March 31st were £6.85 million.

Last year, the company, which has completed a restructuring programme, recorded losses of £2.48 million. An exceptional charge of £5.94 million was included in that year's costs. Earnings per share this year were 3.77p, up considerably on the 1996 pre exceptional charge figure of 1.95p.

Group chief executive, Dr Tony Mullins said positive trends in volume and revenue growth continued in the current year. The group plans further profit growth in both its radiator and plastic activities.

Net borrowings at year end were reduced to £9.85 million, from £17.30 million the previous year resulting in a gearing at year end of 21 per cent compared with 40 per cent last year. The trend is expected to continue for the current year.

Net cash flow from operating activities during the year was £10.75 million, sharply ahead of the 1996 figure of £6.88 million. Interest charges, at £1.61 million were down from the 1996 figure of £2.04 million and, again, this trend is expected to continue.

Dr Mullins said the year to March 31st had been one of "significant progress" and, while trading conditions remained difficult in continental Europe, the continued trends in Irish trading and improvements in Britain were benefiting the group.

It is understood the group will be seeking further growth in its radiator and plastics activities through a combination of acquisitions and organic growth, with a focus on continental Europe.

The programme of disposal of assets not connected to the group's business is likely to be completed this year.

The group's European radiator activities continued to grow during the year, making the group a "significant European manufacturer" Dr Mullins said. Barlo Radiators and Veha Radiators, in Ireland and Britain, had satisfactory years and are to be the subject of continued investment. Veha radiators in Belgium traded satisfactorily despite the slowdown in the European construction market.

Merriott Radiators improved its position in the Irish, British and continental European markets.

In aggregate, the group's plastics activities achieved the highest level of profitability in three years.

An investment programme will double capacity at the Sealcon manufacturing plant in Newbridge, Co Kildare, where 60 people are employed in manufacturing plastic containers for the dairy spread market. It is understood the investment, of some millions, will lead to an increase in the numbers employed at the plant.

Stanley Smith, the British manufacturer of calendered PVC sheet, had "a very good year delivering greatly improved profitability over 1996".

However, the strength of sterling limited the benefits of successful development of markets in continental Europe. These markets now account for some 50 per cent of revenues.

Industrial plastics were affected by the slowdown in activity in continental Europe.

Germany accounts for about one third, or £8 million, of the group's continental European turnover in industrial plastics and recovery is not expected in the short term. However, the company traded to expectations in the industrial plastics sector.

A new plant in the Czech Republic is now in full production, supplying industrial plastics to the emerging markets in Poland, the Czech Republic and Hungary. Operations there are expected to expand.