Sunday 20 October 2019

Ardagh shares slump to new all-time low

Tariff boost: Ardagh chairman Paul Coulson said US President Donald Trump’s moves had helped it battle Chinese imports
Tariff boost: Ardagh chairman Paul Coulson said US President Donald Trump’s moves had helped it battle Chinese imports
Gavin McLoughlin

Gavin McLoughlin

Shares in Irish bottle and can maker Ardagh Group, chaired by well-known businessman Paul Coulson, plunged to a new all-time low in yesterday's trading.

The company's earnings have been hit by rising input costs in its North American bottle business and European can business.

The plunge cut the value of Mr Coulson's 33pc stake in the business, held via a 'holdco' that owns 92pc of the listed Ardagh's shares, to $887m (€780m).

Speaking last month at a conference in New York, Mr Coulson said the American bottle business was coming under pressure from cheap Chinese imports, but that US President Donald Trump's tariffs had a beneficial impact. "We've seen business come back from people who've moved over to using Chinese imports... those tariffs I think are having an effect, a beneficial effect," Mr Coulson said.

He also said labour costs were too high in the company's US glass plants, with the firm mulling a move towards more automation.

"Labour costs are very high, it's very expensive to employ people, but it's much less expensive than in Europe to get rid of people. And so therefore the payback on automation is very, very high in the US."

Only 8pc of the listed Ardagh's shares are in circulation because the other 92pc are owned by the holdco. Mr Coulson plans to get more shares into free circulation, as part of a scheme that would involve refinancing some of the holdco's $2bn debt. But that may be more difficult if the holdco's stake in Ardagh is worth less.

Irish Independent

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