Ardagh Metal earnings soar 24% before New York listing

Ardagh Metal Packaging (AMP), the drink cans unit of Paul Coulson's Ardagh Group, saw its earnings jump by 24 per cent in the three months to June, ahead of the business floating on the New York Stock Exchange in its own right next week.

Earnings before interest, tax, depreciation and amortisation (ebitda) rose to $173 million (€145.7 million) for the quarter, driven by strong sales growth in speciality cans, it said in a statement on Thursday. These cans are anything outside standard sizes, such as 330ml containers for traditional soft drinks and 500ml beer cans in Europe, and have been buoyed by soaring demand internationally for canned energy drinks and flavoured beverages.

AMP took a $15 million hit from a cyberattack in May that forced the wider Ardagh Group to shut down systems, but was subsequently compensated by its parent, it said.

AMP’s revenue rose by 19 per cent on the year to $991 million for the reporting quarter, helped as the company passed on higher metal costs to customers and by $39 million of favourable currency-translation effects.

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Merger

Ardagh Group announced in February that it planned to secure a separate US stock listing for its prized metal packaging business by merging it with a so-called blank-cheque company, called Gores Holdings V, which raised $525 million in an initial public offering (IPO) last year to do deals.

That merger, creating a group with an enterprise value of $8.5 billion, is on track to take effect after Gores Holding V shareholders vote on the matter next Tuesday. AMP shares are expected to start trading on the Thursday.

Ardagh Group, which is also listed in New York, will receive up to $3.4 billion from the spin-off deal and retain an 80 per cent stake in AMP. Legacy Gore Holding V investors will own almost 10 per cent and new investors are pumping $600 million of equity into the new entity for a 10 per cent interest.

Mr Coulson, Ardagh Group’s chairman, chief executive and main shareholder, with a 33 per cent indirectly-held stake, has also raised the prospect of Ardagh Group investors exchanging their shares for direct stock in AMP.

The spin-off is seeking to take advantage of the fact that metal container businesses are attracting higher valuations than glass businesses.

Cyberattack

The cyberattack, which Ardagh Group reported on May 17th, resulted in some shipping delays, mainly in Europe, as the company shut down certain IT systems and brought them back online in a phased manner. Production at all of the group’s manufacturing facilities continued to operate throughout the period.

AMP said that it was covered by “appropriate insurance” for IT incidents and entered an agreement on May 21st, where Ardagh Group agreed to indemnify the unit for certain losses arising from the incident.

Meanwhile, earlier this month, the EU General Court ruled that Ardagh could not trademark the sound made by the opening of one of its drinks cans. In the first judgment of its kind, the EU’s second-highest court decided that an application for a “sound mark” – an audio trademark – made by a German unit of AMP was not distinctive enough. Ardagh Group will report quarterly results next week.