Poor first-half profits will not push IWP down private road
His comments followed a plunge in first half profits from €13.5 million to 7m before tax and exceptional items.
When the write offs, following disposal of the household products group and other cost cutting, are included the group is left with a massive €61.8m loss after tax against a first-half profit of €1.58m for the same period in 2001.
Mr Moran also rejected any suggestion that IWP did anything in taking a loss of over €500,000 in shares bought from former director Richard Hayes, a long time business partner of Mr Moran’s.
Given the bad outturn for the first half, the group cut its interim dividend from 4.2cent to 2.25c for the period.
Results for the half-year to September 30, 2002 showed a sharp decline in sales from €288m to €252m reflecting difficult markets across Poland, Europe and the US. Sales fell from €75.2m to €70.4m and operating profit pre-goodwill fell substantially from €8.2m to €3.9m over the period.
Margins were slashed from a high of 10.9% down to 5.5% as the difficulties in Poland, the Middle East and the US hit home.
Significant restructuring has, and is taking place at the struggling Royal Sanders in Holland whose production has moved to Britain.
Much tighter market focus also forms part of the new strategy with a view to gaining critical levels of market share in a few countries. The disposal of the household products division had been flagged earlier. IWP retains 35% for three years when it will exit the business in full.
It was hit with exceptional losses of €72.4m in goodwill on the deal that was partly offset by the sale price.
As a result of the retrenchment IWP has cut its mountain of debt from €174.2m to €92.9m while net assets have fallen from €91.2m to €34.4m.
Commenting on the outcome Mr Moran said the results were “disappointing” while the outlook for the second half also remains difficult.
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