Ardagh profits up 11pc prior to US flotation
Published 25/08/2011 | 05:00
PROFITS at Irish packaging group Ardagh Glass -- which is preparing a New York stock market flotation -- rose 11pc to €36m in the second quarter of the year.
However, the company has warned investors it will not be able to recover all of the sharp rises in its raw material costs in the remainder of the year.
Controlled by Dublin financier Paul Coulson, Ardagh Glass announced in May that it intended listing in the US later this year in a move that was expected to value the company at as much as €2.2bn.
But some analysts think the flotation could be delayed due to the current state of markets. Many highly leveraged companies, such as Ardagh, are out of favour, even in the US where they are traditionally more accepted than in Europe.
Ardagh said in a bond report to investors yesterday that it continued to experience significant cost inflation in many of its input costs, particularly tin plate and energy.
The company said it was unlikely to be able to recover all those price rises in the second half of the current financial year. However, it hopes to push through price increases next year and will also cut costs.
Ardagh is one of the largest manufacturers of glass and metal packaging containers in Europe. Last year it paid €1.7bn to acquire can manufacturer Impress from the private-equity group Doughty Hanson. That acquisition doubled the size of Ardagh.
On a pro-forma basis, the combined Ardagh-Impress group delivered earnings before interest, tax, depreciation and amortisation (EBITDA) of €555m last year on revenues of just over €3bn. This year, EBITDA is expected to be about €580m.
Mr Coulson and his family own over a third of Ardagh and the stake could be valued at as much as €750m following a stock market flotation.