Irish arm of engineering group RPS frees up €40m for possible dividend to parent

RPS says restructuring is a ‘technical move’ undertaken to give company ‘flexibility’ regarding its Irish operation

An image of the Dinish Island fishing harbour project in Co Cork

An image of the Dinish Island fishing harbour project in Co Cork

 

RPS Group, a London-listed engineering consultancy that advises the State on building motorways, has restructured the balance sheet of its Irish operation, freeing up €40 million that may be paid to its UK parent in dividends.

Recent filings for the Dublin arm of RPS show it implemented a reduction of its allotted capital in recent weeks that potentially releases €40 million for other purposes. Such restructurings are often carried out by businesses ahead of paying out the capital that has been freed up in the form of extra dividends.

The RPS filing states that the move is being implemented “in favour of the company’s shareholders from time-to-time”, suggesting that the payment of extra dividends from the lucrative Irish operation is being considered.

RPS, which has a market value of about £485 million, said the restructuring was a “technical move” that was undertaken to give the company “flexibility” regarding its Irish operation. It said no decision have been taken yet on how to use the capital that was freed up.

RPS employs about 600 staff in Ireland, and is one of the largest integrated engineering consultancies in the State. In its last filed set of accounts, for 2016, the Irish division had sales of about €51.6 million, and made profits of about €5.4 million, up close to 50 per cent.

Recent projects

The Irish unit usually pays its UK parent between €6 million and €7 million annually in dividends, according to the financial statements for recent years.

Among its recent projects, RPS recently advised the State on a new €23 million fishing harbour at Dinish Island beside Castletownbere, Co Cork. A contract to build the new quay development was signed in recent weeks.

RPS is also working on the new €400 million M11 motorway extension between Gorey and Enniscorthy in Co Wexford. It has also worked on flood defence systems for a number of local authorities here.

RPS Group Plc does not break out the performance of its Irish division, but the group’s interim results last month highlighted that the subsidiary was performing “steadily” due to heavy spending on public infrastructure.