One51 set for 20pc drop in earnings as it faces new challenges
ONE51, the Philip Lynch-led investment firm, has told investors it still expects to post a 15-20pc drop in earnings in 2009 and warned that 2010 "looks to be every bit as challenging".
In a letter to shareholders, Mr Lynch welcomed the move by receivers at Liam Carroll's South Morston to place the troubled property developer's 29pc stake in Irish Continental Group, which One51 has been stalking for almost three years. One51 and partner Doyle Group own 25pc of the ferry company.
"The removal of a significant overhang from the share register will dramatically increase the company's free float (tradable shares)," he said. "We see this increase in share liquidity as a very positive development for significant ICG shareholders."
He also revealed that One51's decision to pull out of talks to take control of UK hazardous waste group Augean, in which it has a 26.9pc stake, was due to "differences of opinion on valuation" between both parties.
Group earnings before interest, tax, depreciation and amortisation (EBITDA) are set to come in between €42m and €45m for 2009, which Mr Lynch describes as a "satisfactory result".
Mr Lynch said the main division, Environmental Services, suffered from "a sharp deterioration in economic activity, coupled with declining recyclate prices", adding that demand for recycled material was hit even as competition among industry players remained intense.
He said that the division is in the process of trying to establish itself as a recognisable brand to make it easier for customers to identify and grow the business.
ICG is contained alongside One51's 50pc interest in Greenore Port in the group's Infrastructure division. While economic downturn has affected traffic volumes through the port, Mr Lynch said it and partner Dublin Port are looking to submit a planning application to redevelop the facility "at the appropriate time".
The group's Renewable Energy division consists of its 26pc-held NTR, the toll roads-to-waste management conglomerate, and 11pc stake in tidal energy company OpenHydro.
OpenHydro is currently in the middle of a €30m fundraising to see through a number of projects, including a tidal farm off the coast of Brittany with French electricity giant EDF.