Barlo target for management buyout

BARLO Group has become the subject of a management buyout by managing director Dr Tony Mullins.

Barlo has established European markets in radiators and plastics and is the largest producer of extruded plastic sheets.

The move has taken the markets by surprise because it was believed the group’s debt mountain made such a move impossible to achieve in the current climate.

In recent lists of companies likely to go private Barlo was not included for that reason, although two years ago the markets were rife with speculation that Dr Mullins was preparing a bid.

Neither side had anything to add to the statement yesterday. But there has been no formal bid and it will be some weeks before the situation becomes clear.

Barlo’s annual general meeting is due in two weeks, but it is though unlikely that the group will have any definite information on the situation for shareholders on the day.

The company statement said discussions are at a preliminary stage.

The board has appointed a committee comprising chairman Niall Carroll and senior independent director John Farrell as an independent committee to consider the approach if and when it materialises.

AIB Corporate Finance has been appointed by them to provide it with independent financial advice.

A further announcement will be made in due course.

In the year to March 2003 the group managed to reduce debt by 26 million to 115m while its earnings for the year were in line with market forecasts at 5.6c per share.

A subsequent cautious trading statement led to some lowering of profit forecasts for the current year by analysts, with Goodbody cutting their projections by up to 14%.

After restructuring in 2002 the group made pre tax profits of 9.1m having incurred losses of 9.2m in 2002.

In the current year the group is projected to make profits before tax of 10.2m a modest increase on last year rising to 12.4m the following year.

It has manufacturing centres in Britain and Ireland and mainland Europe in radiators. However, it has struggled with adapting to the slowdown in mainland European markets in particular where all of the major economies have been struggling since the US went into low growth mode in 2000.