Oakhill shares dip on warning

Shares in printing group Oakhill fell 20 per cent to 12 cents yesterday after the company warned of continuing trading difficulties. Sales in the six months to the end of June were down 10 per cent on the same period last year at €37.9 million (£29.85 million) according to the group. The interim results statement also revealed that operating profits, before the disposal of a packaging unit, goodwill amortisation and costs, were down 43 per cent at €2.069 million. Adjusted earnings per share were down by 63 per cent on the same period for 2000 and an interim dividend will not be paid.

Chairman Mr Martin Delany conceded that the results were fundamentally down on last year, adding that the company was unlikely to see any upturn until a planned shift in strategy came on line next year. This restructuring has already begun in the company's US operations, where Oakhill received $300,000 (€32,8803) for the sale of a subsidiary earlier this month.

Mr Delany blamed the company's disappointing outlook on increasing competition in the commercial print market. This business accounts for 50-60 per cent of Oakhill's turnover, and is concentrated in the UK where the company employs 500 of its 670 staff. According to Mr Delany, Oakhill has decided significantly to reduce its involvement in commercial printing, concentrating instead on the production of plastic cards and the management of large companies' printing requirements. This outsourcing model will, according to Mr Delany, be supported by an on-line trading platform where clients can electronically manage their printing requirements.

Oakhill's only Irish operation is a label printing plant in Tallaght outside Dublin which employs 70 people. Oakhill has suffered through uncertain circumstances since it was created in 1999 through a demerger of James Crean's print and packaging operations. The company subsequently divested its packaging arm. More recently, chief executive Mr Donnacha Hurley left. Since the original demerger, Oakhill shares have lost more than 80 per cent of their value. Oakhill shares closed at 12 cents last night.