Interim profit slips to £7.3m at Boxmore

 

Boxmore International, the Northern Ireland packaging group, has recorded disappointing results with a drop in pre-tax profit from £8.6 million to £7.3 million, in the six months ended June 30th 1998. This is Boxmore's first reversal since it gained a share quotation on the Irish market in 1989.

It was weakened by strong sterling, higher interest costs and pre-trading expenses for a joint venture in Japan. No improvement is expected for the remainder of the year. However, the profit reversal, is likely to be temporary.

Boxmore noted that its excess capacity offered an excellent basis for growth in 1999. And as a result of this confidence, the interim dividend is being raised by 7.5 per cent to 1.075p. Boxmore is to continue to restructure its operations and reduce its cost base. Mr Mark Ennis, group chief executive, told The Irish Times without the adverse factors, Boxmore would have shown double digit profit growth . This kind of growth is likely to be resumed next year, he added.

It is also continuing with its strategy of becoming an "established European packaging company" said chairman, Sir David Fell. This will be organised by acquisitions, joint ventures and green field start-ups. The company is also expected to benefit from its capital investment programme. It is continuing to develop its long-term (three years) agreements with blue chip companies and increasing its market share. Group sales rose from £50.9 million to £52.0 million. However, £1.2 million of this was due to an acquisition. Reflecting a drop in underlying profits, earnings per share fell from 8.24p to 7.01p. Nevertheless, the group remains in a relatively strong position with a gearing of 37 per cent and this was after capital expenditure of £7.7 million and the £4 million funding for the take-over of Munier Cartonnage in France. Net cash inflow amounted to £6.0 million, down from £8.0 million.

A breakdown of the divisions shows a 13.6 per cent rise in sales in pharmaceutical and healthcare from £22.6 million to £25.7 million.

Sales in the food and drinks division contracted from £15.56 million to £14.55 million. Its operations in the Republic increased volumes by over 17 per cent.

There was a contraction in sales from the chemical and industrial division from £9.7 million to £9.5 million, affected by the poor weather which prevented spraying.