A fall in interest charges boosted first-half earnings at Barlo Group plc, while the company yesterday released a statement saying that the talks with chief executive Dr Tony Mullins that could lead to a management buyout were ongoing.
The radiator and plastics manufacturer said turnover for the six months to September 30th, the first half of its fiscal year, grew 6 per cent to €155.5 million from €146.4 million in the same period last year.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were level with the first half of 2002 at €14.7 million. However, profits after tax grew by 42 per cent to €2.5 million from €1.8 million in 2002. Adjusted earnings per share (EPS) increased by 25 per cent to 2.22 cent from 1.78 cent.
Barlo yesterday attributed the growth in adjusted EPS and post-tax profits to a fall in interest charges during the period. Basic EPS expansion was equally strong, rising by almost 50 per cent to 1.37 cents from 0.94 cents.
The group also said it had made progress in cutting its debt burden. Net debt at the end of the first half stood at €114.3 million, compared with €131.8 million at the end of September 2002. Its gearing (debt-to-assets ratio) was 94 per cent, compared with 113 per cent a year previously. The company said it expected to continue reducing this debt during the second half of the year.
Chief executive Mr Tony Mullins said the group had achieved a satisfactory performance in a difficult trading environment. He warned that Barlo believed that challenging market conditions would prevail into the second half of the year.
Last July, Barlo revealed that Dr Mullins had made an approach to the company that could lead to an offer of 30 cents a share or €52.5 million for the group. Yesterday, in a separate statement from that outlining its results, the board said it had formed a committee of chairman, Mr Niall Carroll, and independent non-executive director, Mr John Farrell, to deal with that approach.
"The committee is engaged in a process with the possible offeror with a view to establishing if an offer capable of recommendation to the shareholders will be forthcoming," the statement said. "Shareholders should not assume that a recommended offer will be made arising from the process."
A number of unconfirmed reports since July stated that Dr Mullins would increase his offer. They also suggested that the management of Barlo's subsidiary, plastics company Athlone Extrusions, would buy out that business. However, Dr Mullins has not made any statement regarding the buyout approach since July.
