Saturday 23 February 2019

Ardagh Glass profits surge 150pc to €43.6m

Joe Brennan

Ardagh Glass, the glass bottle maker controlled by financier Paul Coulson, saw its gross profit soar 150pc to €43.6m in the first quarter. Sales at the company doubled to €314.9m following its purchase of UK packaging group Rexam's glass container unit last year.

The €660m deal which was completed in June last year spring-boarded the company into the top three glass bottle manufacturers in European market, alongside French group Saint-Gobain and US firm Owens-Illinois.

On a pro-forma basis, combining the figures of both companies before the merger, gross profit rose 15pc on the same period last year as sales only edged 0.6pc higher, according to a report issued to the highly-leveraged group's bond holders, seen by the Irish Independent.

Earnings before interest, tax, depreciation and amortisation (EBITDA) -- a keenly followed figure by bond analysts and investors -- jumped from €20.4m to €63.1m.

The group had €1.1bn of borrowings at the end of March, including €168.3m of 'payment-in-kind' -- or PIK --notes, where interest payments accrue at an annual rate of 10.75pc up until they mature in 2015 or are redeemed beforehand.

Excluding the expensive PIK notes and €52.4m of cash at bank or in hand, Ardagh had net debt of €881.4m -- the vast majority of which will mature between 2013 and 2017.

The group had undrawn credit lines of up to €145.6m at the end of the period, and shareholders' funds stood at €102.2m.

Mr Coulson holds a 22pc direct stake in the company, and 13.1pc through his one-third stake in Yeoman Capital, which owns 39.3pc of Ardagh Glass.

Other senior Ardagh managers own about 15pc of the stock, with private investors mainly accounting for the remaining 23pc -- 24pc.

The business is a result of the Mr Coulson-orchestrated demerger of the Ardagh group in 2003. This saw Ardagh Glass become a privately-held operating company and Ardagh plc (subsequently renamed South Wharf) maintain its Dublin listing as a holding company for the long-term leasehold on a landmark 25-acre site in Ringsend. South Wharf was acquired by a consortium led by developer Bernard McNamara in late 2006 for €412m.

Moody's, the leading credit ratings agency, raised its outlook on Ardagh Glass's ratings to "positive" from "stable", believing the group can sustain last year's strong turnaround.

Moody's still rates the highly indebted group a 'B2' -- 14 levels below the agency's top-notch 'triple-A' rating. The group's pro-forma EBITDA rose 38pc to €232m in 2007, boosted by its ability to pass on higher raw material costs to customers.

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