Acquisitions help drive profit growth at Oakhill

OAKHILL Group, the demerged print and packaging division of James Crean, has announced a 22 per cent increase in profit before tax and goodwill amortisation, to €3.71 million (£2.92 million) from €3.04 million in the six months to June 30th 1999.

Most of this growth was due to a contribution from acquisitions but there was some underlying growth, said finance director, Mr Michael Gannon. Now that the demerger has been completed, the group's resources "are being focused on developing the organic and acquisitive growth strategies which will enhance the long-term shareholder value", said chairman, Mr Donal Chambers. Oakhill, Mr Gannon said, was looking for acquisitions, but nothing was imminent.

The group expects to pay its first dividend in the first half of next year as growth continues. This payment will be in respect of this year's full trading results.

Two of its divisions - printing and labels - are continuing to grow, but packaging continues to experience competitive conditions "and this will impact on its performance in the second half of the year", according to Mr Chambers. Printing is expected to "deliver a satisfactory performance". And "an improved performance" is projected for the labels division "as it continues to build on the benefits of the capital investment in 1998 and the profit improvement plan implemented in late 1998". The interim results show a rise in headline earnings per share from 3.67 cents to 4.58 cents. Net debt rose from €36.46 million to €39.55 million but gearing fell from 99 per cent to 80 per cent, reflecting the increase in shareholders' funds from €36.9 million to €49.3 million. The operating cash flow improved from €4.5 million to €7.3 million. Most of this would be available for investment, said Mr Gannon. Also, the interest cover (before goodwill amortisation) widened from 2.7 to 3.2.

Reviewing the interim results, Mr Chambers said the printing operating profits "were up 14 per cent, helped by the contribution from acquisitions".

A breakdown of the operating profits is not given but Mr Gannon said printing accounted for 70 per cent. Printing had "an encouraging performance", said Mr Chambers.