Ardagh Glass Group reports losses of €35.8m

Ardagh Glass Group, the glassmaker spun off from Ardagh plc in 2003, has reported a loss of €35.8 million for last year and warned of "very tough" trading conditions.

The company's chairman, Paul Coulson, told shareholders yesterday that the group's main problems are in the UK, where "hugely increased" energy costs have combined with overcapacity.

"We believe that the next two years will be very difficult for all players, new and old, in that market," he said.

Ardagh is one of the three largest glassmakers in the UK, with its rivals including Seán Quinn's Quinn Glass, which has spent €364 million on a new plant in Chester.

Shareholders attending Ardagh's agm in Dublin, heard that trading in the first three months of 2006 had been ahead of budget.

"However, budgeted operating profitability for 2006 is at a significantly reduced level due to the difficult trading conditions," he said.

Ardagh had revenues of €452.7 million last year, but registered a pretax loss of €35.8 million after operating and finance costs. This resulted in a basic loss per share of €1.37.

Mr Coulson said that the firm's cash and liquidity position remained strong.

The agm was, in general, a testy affair with the chairman questioned on a number of issues by John Collins, the solicitor leading a group of dissident Ardagh shareholders who are in dispute with the company.

These shareholders, who own about 1.5 per cent of Ardagh but had about 3.5 per cent of its predecessor, argue that the firm's takeover last year by Caona plc was not conducted properly.

They are thought to be considering their legal options on the matter.

Caona was a special special-purpose company controlled by some of Ardagh's largest shareholders, including Mr Coulson.

The chairman told Mr Collins that the takeover was "a very good deal for shareholders" when it was concluded and had become a better deal since in light of market conditions.

The dissident shareholders believe the directors of Ardagh, then registered in Guernsey, had a duty of care to advise them on whether the €4 per share takeover was a good deal or not. Ardagh and Caona argued that it was up to the Ardagh Glass shareholders to form their own view.

Yesterday, Mr Coulson claimed that shareholder value in Ardagh and related company South Wharf had risen eight-fold since 2002.

He said the takeover had been "an extremely appropriate transaction".