One-51 braces for a fall in profits

ENVIRONMENTAL and niche investment group One-51 has warned that its operating profits this year will be down on last.

The company made an underlying operating profit of €31.1 million in 2010, but a net loss of €104.7m due to a write-down of its 24.1% stake in renewable energy group, NTR. Yesterday, the group reported an operating profit of €16.4m for the first six months of this year; down 10% on a year-on-year basis and a 14% rise in pre-tax profit to €11.3m.

However, the company told shareholders — at its annual general meeting yesterday — that its second half would be challenging; mainly because of rising costs and NTR not paying a dividend this year, with the overall result being a hit to the balance sheet.

One-51’s interim chief executive, Alan Walsh, who took over in the summer following the dismissal of former CEO Philip Lynch, announced a two-year action plan for the company; one which would focus on accentuating its ClearCircle environmental division, increase cash flow and reduce debt levels.

The group’s debt has increased by €100m — to €156.6m — since the end of last year and management is looking for a significant reduction by the end of 2011. In the longer-term, the debt question will partly be tackled by the disposal of selected assets.

Mr Walsh added that the company’s stake in NTR — which, itself, reported a hefty loss recently — would be retained but that the progress of NTR would be monitored “extremely closely”. One-51 has also requested board representation on the new NTR board. Similarly, the company will retain its stake in Irish Continental Group (ICG), viewing that investment as “very valuable” as it pays an annual dividend of more than €3m. Mr Walsh added that the One-51 that emerges after its two-year development plan will be “a very different company” to the current model.

A number of high-profile shareholders — some of whom have lobbied for change for some time at One-51 — paid tribute to the board for finally exacting change, by sacking Mr Lynch; but the call still went out for a widespread freshening of the board. The three board members who were up for re-election yesterday however, were all voted back on; but Peter Byrne, who had been nominated by Wexford Farmers’ Co-op, was not elected.

Mr Walsh, meanwhile, said that he would stand over the new strategic plan which “will begin to restore value to shareholders”. He also effectively put his name in the frame for the permanent CEO job, by stating that nobody knows One-51 like he does.