Sunday 19 November 2017

Canadian takeover lifts One51 earnings

One51 ceo Alan Walsh says the firm’s strategy is to grow its plastics operations organically and through acquisitions after earnings soared by 53pc thanks to North American expansion
One51 ceo Alan Walsh says the firm’s strategy is to grow its plastics operations organically and through acquisitions after earnings soared by 53pc thanks to North American expansion

Gretchen Friemann

One51, the industrial group backed by financier Dermot Desmond, racked up a 53pc jump in earnings over the past year, outpacing market expectations and reflecting the scale of the turnaround in the once troubled business.

Five years ago the board faced a storm of controversy over its hefty debt pile, accumulated to fund a diverse range of ill-fated investments.

Yesterday, the company embarked on a steep growth trajectory for the first time since 2007, with analysts predicting another robust performance next year as One51 reaps the benefits of a streamlined structure focused on the plastics sector.

The leap in One51's earnings was attributed chiefly to the expansion in its North American operations.

Group revenue jumped by 18.6pc year-on-year to €433.9m, with the bulk of that income flowing from the newly acquired Canadian plastics company, IPL.

Annual earnings before interest, taxes, demortisation and amortisation soared to €55.2m compared with €36.1m in the previous year.

In a note to clients, Davy stockbrokers described IPL as the chief driver of the company's fortunes, although its momentum was offset by a weaker year-on-year performance in One51's subsidiary, OnePlastics Group, mainly due to the weaker value of sterling.

The market is now braced for One51 to expand to full ownership of IPL, in what would mark another key milestone in its transformation into an international plastics player.

One51 boss Alan Walsh pointed out the annual results "support" its decision to narrow its focus into this one sector.

"The challenge now is to continue to grow our plastics operations, both organically and through acquisition, while continuing to integrate our previous acquisitions," he said.

However the cost of acquiring the remaining 33pc of IPL not already under One51's control has risen by €37.8m to €72.2m, according to the accounts.

One51 abandoned a stock market listing last year, contributing to a €1.9m loss on its exceptional and non-recurring items and share of associated profits.

It is understood there are no plans to revive the initial public offering but some analysts argue the company's steady organic growth and retreating debt levels may heighten demand for a float or even lure in a suitor.

One51's clean-up strategy has yet to be completed however, with the UK recycling business likely to be sold within months. The Irish arm was cast off for less than it cost to buy the division. Analysts are also pencilling in a marginal figure for the UK metals recycling division.

Irish Independent

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