Tuesday 24 January 2017

Buyback deal 'put value of PM Group at €60m', as profits rise

Published 26/10/2016 | 02:30

PM Group cfo Larry Westman and ceo Dave Murphy
PM Group cfo Larry Westman and ceo Dave Murphy

Irish engineering firm PM Group is to hire an additional 500 staff by 2020 and says it has seen no real impact yet from the UK's decision to exit the European Union.

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The Irish Independent believes that a deal late last year to buy back a near 25pc stake in the business owned by multinational Amec Foster Wheeler valued PM Group at over €60m.

It's thought that Amec Foster Wheeler received about €15m for its stake.

But PM Group chief executive Dave Murphy declined to comment on the sale price, citing a confidentiality agreement inked as part of the transaction.

PM Group - whose blue-chip clients include firms such as AstraZeneca, Jazz Pharmaceuticals, Google, Dell and Glanbia - said yesterday that its operating profit jumped last year by 21pc to €10.9m.

While revenue fell to €297.3m from €349.4m in 2014, the company said this was a result of a reduction in so-called "pass through" revenue associated with the variance of construction contracts. Mr Murphy said that underlying revenue was up, however.

PM Group generated €119.2m of its revenue in Ireland last year, €85.3m from the UK, €4.4m in the US, and €42m from continental Europe. An additional €46m was generated in other regions, primarily Asia. The company has offices in Singapore and Shanghai.

Chief financial officer Larry Westman said that the impacts for the group from June's Brexit vote have largely been confined to PM Group's own accounting, with the sterling slump having a negative translation effect into euros.

"We're supplying services out of Ireland, so the costs go up for those in the UK," he said. "There's some uncertainty on the ground in the UK. There's nothing drastic. There's still great buoyancy in the pharma sector."

He said that GSK - a client - remained "very bullish" about its own plans, for instance.

Mr Murphy said that other regions, including Asia, also remained strong. The company now employs 120 people in Singapore and 100 in Shanghai.

"Asia was very good for us both last year and this year," he said. He added that med-tech and pharmaceuticals were helping to drive business in the region.

While Mr Murphy declined to discuss the sale price agreed with Amec Foster Wheeler, he said that the deal meant PM Group was now entirely owned by staff.

About 150 executives and managers own a combined 75pc of the business, with about another 400 staff owning the remaining 25pc. The group employed 2,150 people in 2015.

The company has already hired 100 graduates from the 500 it intends to hire by 2020. Of the 500, PM Group said 250 will be based in Ireland.

Irish Independent

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