€2.3m wiped off IWP shares after closure shock

MANAGEMENT at IWP International is to close the company’s headquarters in Dublin city centre, relocating the operation to Britain in a cost cutting move resulting in once off expenditure of €6 million.

Shares in IWP fell by 9.09% following the news which took the market by surprise resulting in €2.3m being wiped off the value of the company.

In a brief statement issued by chief executive Jim Murphy the company said that due to difficult trading conditions in the post-Christmas period, particularly in the British market, earnings for the year ended 31 March 2005, while ahead of last year on a continuing basis are likely to be below market expectations.

“Second half earnings are significantly ahead of the prior year but are not as strong as we anticipated.

“The group’s net debt position at the year-end is expected to be broadly in line with market expectations,” a company statement said.

It said that as part of the ongoing restructuring of the group, the head office in Fitzwilliam Square in Dublin is to be closed and relocated to the company’s existing site in Skelmersdale, Lancashire. It is understood that seven jobs will be lost as a result of the closure of the Dublin offices which were occupied on a lease basis.

IWP said the move will result in a significant reduction in the group’s cost base. Skelmersdale is the location of the IWP’s Constance Carroll make-up business and this move is expected to be completed this year.

“The group’s exceptional charge is expected to be in the region of €6m due to additional refinancing fees and costs associated with the closure of head office,” the statement said.

Turnover and profits at IWP have fallen in recent years as it disposed of its household products division, its labels businesses and most recently its speciality plastics operation.

The money earned is being used to paydown debt and allow the company to focus on its personal care division.

Back in 2000 the company had sales of close to €565m and pre-tax profits of €27m. Turnover in 2005 is expected to be more that €200m with pre-tax profits of just €2m.