IEC Holdings sees losses of Eur4.7m

IEC Holdings, the freight forwarding and supply chain management group, made a loss of €4.7 million in the year to March 31st, 2003, according to its latest accounts.

Irish Express Cargo, a subsidiary of the IEC group, was bought from its Irish owners in 2000 for €76 million. It contributed €1.9 million of the overall loss incurred by the group.

The ultimate parent company, Flextronics International, which is based in Singapore, has given written confirmation of its intention to continue to support the Irish group.

The loss of €4.7 million follows a more significant loss of €8 million in the previous year. Net liabilities at March 31st, 2003, were €22.4 million, as against €20 million a year earlier.

The group accounts note that the primary source of the losses for the year was Express Cargo Forwarding Ltd, a subsidiary based in the UK.

Turnover for the group for the year was €162 million, a significant fall from the €226 million turnover figure for the previous year. The bulk of the turnover (€101 million) was in the Republic, with lesser amounts being attributed to the UK, the Netherlands, the US, Singapore and China.

Exceptional items during the year for the group included €3.66 million in redundancy payments. The equivalent figure for the previous year was €12.9 million. The redundancy payments in 2002 and 2003 "reflect the costs of a fundamental restructuring of continuing operations" and "arose in respect of the ongoing streamlining of the business following the acquisition (of the group) by Flextronics International and a change in the business model," according to the accounts.

Directors' emoluments during the year were €433,000. The group employed an average of 1,055 people during the year, at a cost of €46.7 million. The average number employed the previous year was 1,782.

The notes indicate that a dispute with the previous owners has arisen concerning pensions since the purchase of the group.

"The directors considered that payments of €7.6 million were required to be made to the schemes to regularise the funding situation. The group intended to recover these payments from the previous shareholders of the group and the previous advisers to the schemes. Any unrecovered amounts will be funded by the ultimate parent company."

Subsequent to the balance sheet date, the group incurred a €5 million charge in respect of redundancy and "onerous lease costs following the loss of a significant customer contract".