One51: Earnings guidance still stands despite prospects of tough second half

ONE51, the holding company with a 25% stake in renewable energy group, NTR, said the earnings guidance it gave the market in May still stands, despite the prospects of a tough second half.

Consolidation of the group’s activities, particularly its core environmental services division, has resulted in the loss of 150 jobs since October, with overall numbers reduced to 1,100.

Integration of the group’s core environmental services activities in Ireland resulted in the job losses, group founder and chief executive Philip Lynch, who has top Irish investors backing him, including beef tycoon Larry Goodman, told journalists after group’s well attended AGM in Dublin that the current environment was hostile to further acquisitors at present.

“People’s expectations are still up in the air ... debt was too readily available”.

That was also one of the reasons the group pulled back from takeover talks with the British-based public group Augean, he said.

Overall the group had a good first half with EBITDA of over €24m, compared with €30m for the first half of last year.

In the circumstances it’s been a very good first half and Lynch said its earnings guidance for 2009 still stands.

The group has a war chest of €250m guaranteed by its bankers up to end 2011.

As markets adjust to the new realities One51 will become more active in the takeover market, he said.

The buyout deal on ICG, the car ferries group, with its existing management foundered for that reason.

Lynch refused to be drawn on whether he would bid for the 29% of ICG held by struggling property developer Liam Carroll.

One51, ICG’s management and Carroll are all significant minority shareholders.

Lynch said he “worked very hard” to get the ICG takeover issue resolved. It has a “management team we admire”, adding it would be inappropriate for him to make any comment on the potential buyout of Liam Carroll’s 29% stake.

He insisted it was a highly profitable public company that will pay good dividends and reward the group’s investment in the long term.

“The outlook for the second half remains challenging, but we are confident that we will at a minimum achieve the guidance that we gave in May,” he said.

He told the AGM he expected earnings before interest, tax, depreciation and amortisation (EBITDA) to be between 15% and 20% lower than 2008’s €52.2m.

Net debt at the group had dropped to €191m from €213m at the end of 2008.

He added that the group kept its biggest division – environmental services – in profit after taking action to cut costs last year.