Unidare starts paying dividends to shareholders again after group pre-tax profits double to €9m
The results were boosted by a wide-ranging cost-cutting programme that went to war on head office-related expenses and the non-recurrence of a once-off €0.75 million write-off in the previous year. Sales edged up €4 million to €208 million, but adverse currency movements, primarily the collapse in the dollar, sliced €19 million off topline sales.
America accounted for almost three-quarters of group sales, where its ORS Nasco subsidiary acts as a wholsesaler to the industrial, welding and oilfield supplies sector. Sales in America were ahead 10% when measured in dollars, but when converted to euro terms, revenues fell slightly.
Chairman Jack Hayes said the weakening dollar and “very high” copper prices were among the main challenges facing the group, but added that management would build on the “improving” performance. The company will pay a dividend of 5c per share, at a total cost of almost €1m, after leaving shareholders empty-handed every year since 2001.
Investors responded to the good news by buying Unidare shares, which jumped 5% to €3.00 after the results were announced.
The group’s remaining businesses, a British distributor of electrical cables and a Netherlands-based central heating manufacturer, delivered results ahead of forecasts.
Eland Electrical in Britain saw sales rise 38% and broke even at the operating profit level for the first time in three years.
Daalderop, the Dutch subsidiary, grew sales 10% to €35.7m.
But operating profits fell from €6.1m to €5.7m, thanks to the increase in copper prices, which squeezed margins. Analysts had expected the fall to be more severe.
Goodbody Stockbrokers analyst Gavin Kelleher said the results were strong and significantly ahead year-on-year.
He added that the reinstatement of dividend payments was a “key positive” and that the company could comfortably pay out dividends in the future.
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