Irish Continental Group (ICG) increased its revenue by 16 per cent to just under €369 million in the first six months of this year but pretax profit fell by 2.9 per cent to €19.9 million, its latest results show.
ICG, which operates Irish Ferries, said its Ebitda (earnings before interest, tax, depreciation and amortisation) rose by 7.3 per cent in the period to €58.9 million. The company said it was impacted by higher fuel and operational expenses and increased port costs.
ICG also gave an update on trading since the end of June, showing that car volumes were down almost 8 per cent and roll on-roll off freight by 9.3 per cent respectively during the summer months up to August 15th.
Given that two-thirds of its earnings are typically recorded in the second half of the year, it said the weakness in car and freight volumes was a “particularly worrying trend that poses a significant challenge” to the group.
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ICG also said it had been served a termination notice of its charter agreement by P&O Ferries on its Dover-Calais route. “The group is currently evaluating its options,” it added.
Publication of the results was brought forward to Wednesday to allow investors to digest them in advance of an extraordinary general meeting on August 28th to consider a €1.2 billion offer to buy ICG, led by chief executive Eamonn Rothwell (71).
On Tuesday, the board of ICG said it “continues to consider the terms of the acquisition [by management] fair and reasonable”, having considered recent letters from shareholders, who argue the offer undervalues the company.
That move came hours before Pageant Investments, a 2 per cent shareholder, said it had voted against the proposed sale.
Nick Furlong’s Pageant said the proposal was “an unreasonable discount to fair value” while also criticising the timing of the sale as well as the independent board.
“The independent board, management and the advisers have recently communicated that they have spent approximately three years seeking potential purchasers for ICG without securing an acceptable proposal,” it said.
“However, the offer announcement states that the independent board considered, but decided against, initiating a formal process to test third-party interest. These two positions require greater explanation.”
The management buyout offer is led by Rothwell, who owns 21.7 per cent of the company, and senior executives David Ledwidge, Andrew Sheen and Declan Freeman, who hold a further 2 per cent of the stock between them.
The offer would see shareholders paid €8 per share, a 28 per cent premium to the closing price of ICG’s stock on July 24th, an hour and a half before the bid was announced. The shares were down 2.4 per cent on Wednesday after the results were published, trading at €7.40.
Last Friday, Oxy Capital, which owns 1.4 per cent of ICG, came out against the proposed sale to management, claiming the bid undervalued the ferry business by as much as 39 per cent.
Other shareholders, including Marathon Asset Management, which has a 4.1 per cent stake in ICG; 2.1 per cent shareholder Janus Henderson; have also voiced their objections to the value of the deal.
ISS, an influential shareholder advisory firm, recommended that investors back the management bid for ICG.
Earlier this week, in response to criticism of the offer by certain shareholders, the Bluefin BidCo entity undertaking the buyout said it would not increase its offer.
