Maxol’s pre-tax profits plunge by 74%

THE McMullan brothers, owners of the Maxol oil company, were paid€1.7 million in dividends last year, despite pre-tax profits at the company plunging 74% to €3.5m.

Noel, Malcolm and Max McMullan are directors of the firm and the dividend paid is up from €1.2m in 2007.

According to accounts just filed the company said it expects difficult trading conditions in 2009 with declining volumes due to the economic recession.

“Maxol will, as ever, focus on reducing its costs and plans to maximise the benefits from its various IT projects. With an excellent network of modem service stations, an established base of home heating customers and net bank debt of only €4.7m, the group is in a good position to continue to trade profitably during these difficult economic times,” the accounts read.

Turnover in the year was almost €643m, down from €696m in the previous year, according to the accounts for McMullan Bros Limited, covering the year to the end of December 2008.

It said that after a good trading performance in 2007, it recorded a satisfactory result in the first six months of 2008. Then in July the rapid fall in the oil price from its all-time high and the severe downturn in the economy, eroded the quarter one and two budget surplus due to losses on stocks purchased at higher prices and reduced volumes.

“This downward trend in volumes continued for the rest of 2008. Coupled with the losses on stocks this resulted in a drop in the group’s gross profit of €9m from that recorded in 2007,” the accounts read.

Staff costs fell from €12.3m to €11.3m as employee numbers dropped from 192 to 184. Redundancy costs were €279,405 in the year.

The group continued to invest heavily in further developing its retail network, spending €20m on its service stations but its net debt position increased from €2.2m at the end of 2007 to just €4.7m at the end of 2008.

The board said it has decided to adopt a prudent approach to capital expenditure in view of the difficult economic climate.

“However, the group has the substantial lines of credit available which are not currently utilised and is extremely well positioned to take advantage of any exceptional expansion opportunities that may arise,” it said.

The pension liability at the end of 2008 was €10.5m compared with €7.5m in 2007.

Shareholders funds at the end of the year were €1.5m from €3.2m in 2007.