Mannok earnings grow to €31m as €66m investment ‘pays off’

Company formerly known as QIH has spent €66 million on businesses in past six years

Liam McCaffrey, chief executive of Mannok says company had been preparing for Brexit since the vote in June 2016. Photograph: Mannok

Liam McCaffrey, chief executive of Mannok says company had been preparing for Brexit since the vote in June 2016. Photograph: Mannok

 

Earnings at building materials and packaging maker Mannok grew 17 per cent to €31 million last year, the company said on Thursday.

Formerly known as Quinn Industrial Holdings, Mannok, which makes cement and food packaging, said revenues last year were steady at €233 million.

Earnings before interest, tax and write-offs, a measure of the cash a business generates, rose 17 per cent to €31.1 million from €26.6 million as investment helped cut costs.

Liam McCaffrey, chief executive, pointed out that the earnings growth showed the group’s investment in its businesses over the past six years was paying off.

Since December 2014 Mannok has spent €66 million on its businesses. Last year it invested €6.7 million on manufacturing technology and boosting capacity. It has pledged a further €6.1 million for this year.

“That investment really proved its worth in 2020,” Mr McCaffrey noted, adding that this became particularly obvious as Mannok adjusted to the impact of Covid-19 during the year.

Brexit

The group has businesses on both sides of the Border, and exports many of its products to Britain.

Mr McCaffrey noted that Mannok had been preparing for Brexit since the vote in June 2016, which he described as an “overhang” for the group, largely because of the uncertainty that followed the poll.

“In terms of the process, largely all the hurdles were overcome once the deal was put in place and we knew what it was,” he said.

“Apart from some teething problems in the first couple of weeks it settled down pretty well.”

Demand for building products has been strong in both Ireland and Britain, he noted, driven mostly by housing shortages in both countries. However, the initial Covid-19 lockdown in the Republic last spring brought demand to a standstill for six weeks.

Mannok placed 600-800 staff on furlough at the end of March 2020, but almost all had returned to work within three months.

“The impact of the lockdown on Ireland has been more noticeable,” Mr McCaffrey observed.

Demand so far this year has been strong, but Mannok believes that some increases in raw materials costs will cut margins. Ongoing construction lockdowns have delayed projects in the Republic, but underlying demand remains strong, Mr McCaffrey said.

Food packaging

The food packaging business performed well in 2020, partly due to people buying more from supermarkets as pandemic restrictions have closed restaurants and takeaways.

As of last year, all the group’s food packaging products are 100 per cent recyclable. The company is now looking at cutting carbon across all activities.

“Given our ongoing exposure to the food and construction sectors, the very positive response to our rebranding and the potential tailwind of a vaccine-driven economic recovery, the outlook for 2021 is positive,” Mr McCaffrey said in a statement.

Dara O’Reilly, chief financial officer, said Mannok would continue to monitor the supply of raw materials for its packaging and insulation businesses in particular.

“Notwithstanding a positive outlook and good demand, we are expecting some margin compression as a result of inflationary cost pressures in 2021,” he added.