Wednesday 26 October 2016

PM Group's boss rules out flotation on profit rise

Published 01/10/2015 | 02:30

PM Group chairman Dan Flinter; ceo Dave Murphy; and cfo Larry Westman
PM Group chairman Dan Flinter; ceo Dave Murphy; and cfo Larry Westman

Irish engineering firm PM Group doesn't intend plotting a stock market flotation yet, with a strong enough balance sheet to allow it to continue its expansion strategy for at least the next five years, according to chief executive Dave Murphy.

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The company, whose clients are almost entirely multinationals in the pharma, food and tech sectors, said its operating profits rose 24pc to €9m last year, despite revenue remaining largely flat at €349m, according to results yesterday.

The company - almost 25pc-owned by Switzerland-headquartered engineering group Amec Foster Wheeler - counts Google, Dell, Astra Zeneca, Merck, Glanbia and Mondelez among its clients. It generates the biggest chunk of its business outside Ireland.

Mr Murphy said that while the group had experienced a strong 2014 within the pharmaceutical sector in particular, economies generally across continental Europe remain muted.

"We saw it two years ago in Ireland that foreign direct investment flows had picked up," said Mr Murphy.

"There's no significant pick-up across Europe. There's still a reasonable amount of investment in the sectors we're focused on, but you couldn't say there's any major up-tick in business across the Eurozone."

PM Group generated €101m, or almost 29pc of its revenue in Ireland last year, with €144.8m, or 41pc, recorded in continental Europe. Another €61m, or 17pc, was made in the UK, and €4m in the US. Other revenue unclassified by region totalled €38.7m.

The firm plans to grow revenues by 25pc over the next five years, and its earnings by 70pc. By 2020, it aims to generate 40pc of profit outside Ireland.

Mr Murphy said the issue of a flotation does sometimes arise at board level."It does come up from time to time," said Mr Murphy. "But right now, we have a very strong balance sheet, we've no debt, and we're largely able to fund any growth through our own resources."

He said the business relies on personal interaction with clients. "We believe that the benefit of having a private feel of having employee-shareholders and managers means that people can often get a lot of benefits from the business that they mightn't from a plc environment."

He added that the company would think "long and hard" before considering a flotation.

"The biggest attraction would be to have more fluidity for our shares - we currently have a private market that happens once a year. But right now, we're not looking for funds."

Chief financial officer Larry Westman also said that the company is now "back on the acquisition trail" after consolidating previous buys. "If we find the right opportunity, whether it's geographic, or a skills set or a niche service, we'll move on that."

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