PM Group has acquisition power of up to €50m

Engineering firm posts profits of €9.1m, down 14% as Brexit and strong euro take toll

 PM Group’s Larry Westman,  Dave Murphy and Dan Flinter:  “The performance to date in 2018 has been really positive and a great tribute to the group’s management and staff,” says Mr Flinter.

PM Group’s Larry Westman, Dave Murphy and Dan Flinter: “The performance to date in 2018 has been really positive and a great tribute to the group’s management and staff,” says Mr Flinter.

 

Engineer and project manager PM Group has up to €50 million to spend on acquisitions to add to the two companies it has bought this year.

Brexit and the strong euro left PM’s profits trailing by 14 per cent at €9.1 million last year, the Irish-based multinational said on Wednesday.

PM announced it had bought Belgian engineering specialist Magnet Group, whose clients include Pfizer, Proctor & Gamble, Kellogg’s and Antwerp port.

Larry Westman, PM’s chief financial officer, estimated that the group had between €40 million and €50 million to spend on further purchases.

“If a particular-size deal came along and we wanted to structure it in a particular way, we could go beyond that,” he added.

Mr Westman, who was speaking after the results were published, pointed out that PM Group had €52 million in cash with no debt at the end of last year.

Dave Murphy, chief executive, said that PM wanted to buy more businesses, but was not close to doing any deals.

“We are very active in research and we are looking particularly at the US and also mainland Europe, ” he explained.

PM already employs about 50 people in the US but Mr Murphy pointed out that it would like to increase its presence there to several hundred staff.

The group did not reveal how much it paid for Magnet. Mr Murphy described it as small in the context of a group with 2,400 staff, but important as it strengthened PM’s presence in Belgium.

Up to now, PM’s Irish operation has supported its Belgian business. Mr Murphy said that the Magnet purchase would allow it get involved in bigger projects. Magnet follows its purchase earlier this year of UK engineering group Projen.

Construction and engineering

PM Group manages construction and engineering projects for the global pharmaceutical, technology and manufacturing industries. The company has operations here, in Britain, Europe, the US and Asia.

Revenues last year fell 14 per cent to €290 million, partly due to costs incurred by the business on clients’ behalf.

The group often buys equipment and plant for customers and ultimately passes these costs on but has to account for them in its own figures.

Excluding the impact of that, fee income was down 2.5 per cent, mainly due to weakness in its British market.

Mr Murphy indicated the fall in profits was mainly due to UK clients’ caution about investing while politicians negotiated the country’s exit from the EU.

The UK accounts for 20-25 per cent of PM’s revenues and 10-15 per cent of its profits. Mr Murphy predicted that once businesses were clear on how Brexit would be managed, investment there should stabilise.

He noted that PM was enjoying strong growth this year. Its Irish business is working on contracts for the pharmaceutical, medical technology and food industries, he added.

PM’s net assets grew 10 per cent to €51.8 million last year. The group now employs more than 2,400 people worldwide and intends hiring a further 400 by 2020, more than half of whom will be graduates.

Mr Murphy said in a statement that despite a number of external challenges, 2017 had been a strong year.

“We delivered a range of complex projects for multinational clients around the world,” he said.

Chairman Dan Flinter said that PM achieved solid results last year. “The performance to date in 2018 has been really positive and a great tribute to the group’s management and staff,” he added.