Maxol profits rise 9% to €6.3m as debt declines

Maxol increased pretax profits by 9 per cent to €6.3 million in 2006 as the family-owned fuel wholesaler and retailer enjoyed the benefits of reduced competition among service stations and lower debt payments.

Profits rose despite a fall in turnover at McMullan Bros, the firm behind the fuel company, from €816.6 million to €810.3 million in 2006, according to accounts just filed. Gross profit increased from €39.5 million to €41.6 million during the year, while operating profit more than doubled to €4.6 million.

Maxol has a network of 250 petrol stations, of which 100 are company-owned and operated by licensees. The remainder are run by independent owner-operators. It has a retail agreement with Mace, though its forecourt stores operate under both the Mace and Spar brands.

Tom Noonan, chief executive of the Maxol Group, said the company enjoyed an increase in trading profit due to the company's investment in its service station network and reduced competition at the petrol pumps as some of its rivals had closed stations in some locations.

"We got a lift out of our competitors selling stations and have been a beneficiary of less competition in particular areas," he said.

He said Maxol had also sold six of its home-heating businesses over the past year, which helped to reduce the company's debt repayments. Bank borrowings fell from €40 million to €9 million in 2006. "We felt if we could not generate the necessary critical mass in home heating we were better off cutting our losses," said Mr Noonan.

Maxol still has home-heating businesses in Belfast and Foynes, Co Limerick.

Mr Noonan said he expected the company to have no bank borrowings by the end of next year. It made a profit of €3.1 million on the disposal of assets, primarily on the sale of its home-heating businesses. This compared to a profit of €6.3 million the previous year on the sale of assets.

Mr Noonan said 45-50 per cent of turnover was paid in Government duties. The company has kept costs low by maintaining its staff levels at 240 employees, less than some of its competitors, who employ retail staff. The wages and salaries bill at McMullan Bros rose from €11.4 million to €12 million in 2006.

The company owns its own terminals in Drogheda and Foynes, but its fuel is also held at terminals owned by Statoil-Shell owner Topaz in Dublin, Cork, Limerick and Galway, and by BP in Belfast.

Founded by William McMullan in 1914, the company is still owned by the McMullan family.