Navan predicts £500,000 profit after staff buoyant

NAVAN Carpets expects to make an operating profit of around £500,000 this year, following a £4.3 million management buyout. Its managing director, Mr John Ryan, said yesterday the company had earmarked £1.7 million for new investment.

Mr Ryan told The Irish Times Navan had made an operating profit of around £300,000, before rationalisation costs, and it was hoped to improve on this in 1996. However, the market was not expected to improve dramatically this year.

He said the US market was very buoyant and Navan would concentrate further on the British and Northern Ireland markets, as well as the domestic market.

Mr Ryan was speaking following an announcement that the management buyout hand been completed.

Coats Viyella, the British textiles group, which used to own Navan Carpets, has a 19 per cent shareholding in the new company. Its involvement is very useful when Navan is dealing with British suppliers, where the Navan name is not well known, says Mr Ryan.

It is understood that the £4.3 million buyout comprises an ordinary shareholding of around £1 million (this includes Coats and employees). Coats has also given a commitment of a further £1.2 million. Forbairt investment will eventually total around £1.2 million and Ulster Bank has given £1.1 million via an over draft facility and invoice discounting.

Mr Ryan said the company had no debt, apart from a preference shareholding of about £1.2 million, but it did have overdraft facilities. "The operation was funded so that it would not have debt in the early stages," Mr Ryan said.

The carpet industry is seasonal and the summer is its slackest period, so borrowings may be needed then.

The company's annual turnover is about £11 million and the market breaks down equally between domestic and export sales. The company has recently won orders to supply carpets to the Resorts Casino in Atlantic City; the Willard Intercontinental Mayflower, in Washington; and the Four Seasons hotels in Chicago and Philadelphia.

Navan also won a contract to carpet the Beverly Hills Hilton.

Under the buyout, staff now have a 37 per cent shareholding; management, 39 per cent; the chairman, Mr Bruce Lyster, 5 per cent; and Coats Viyella, 19 per cent. Forbairt has an option on 5 per cent of the shareholding.

Navan is said to be the longest established Irish manufacturer of woven carpets and has been operating from its factory in Co Meath since 1938.