On the day management announced its €385 million (£303 million) buyout, it emerged that Clondalkin has maintained its record of strong growth into the first half of 1999, with interim profits up 18 per cent to €19.5 million (£15.4 million).
Sales in the period rose 7 per cent to €280.8 million (£221.1 million). The only blemish on an otherwise excellent set of results was in Britain where operating profits fell on the first half of 1998. All of the group's operations in Britain suffered from poor demand in the first half. The British market accounts for 19 per cent of Clondalkin's sales and chief executive Mr Norbert McDermott said there were signs of a pick-up in demand in the second quarter. He added that the group had taken corrective action and the British market had now turned the corner.
Clondalkin's other areas of operation - Ireland, continental Europe and the US - all performed well. Demand held up or improved in all these markets while, on the continent, strong growth in the Netherlands and Germany was countered somewhat by weak demand and poor product positioning in its Swiss market. Rationalisation in the Swiss business resulted in an exceptional charge of just under €2 million.
Although acquisitions and capital investment of €37.7 million saw Clondalkin's net debt at the end of June rise from €58.9 million to €90.3 million, lower interest rates saw the interest charge fall from €3.4 million to €2.6 million. Despite the increase in the debt, Clondalkin's interest cover is high - at more than nine times, although this will fall considerably in Edgemead.
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