Losses fall 86% at Quinn’s construction group after restructuring

Losses at the construction group established by Sean Quinn narrowed by 86% last year to €24m.

Quinn Manufacturing Group Holdco Ltd is today owned by the IBRC, syndicate banks, and financial investors following the restructuring of Quinn Group Ltd in Dec 2011.

Accounts to the end of Dec 31 last show losses at the manufacturing group fell sharply in 2011, from €177.5m to €24.5m.

Operating profits increased almost threefold to €24.2m before exceptional items and impairment charges are taken into account.

Revenues fell 2.6% to €628.6m, primarily due to a market decline in construction-related products.

Chief executive Paul O’Brien said: “The group’s financial statements for 2011 reflect the significant financial restructuring of the group during the year which has resulted in a substantial strengthening of our balance sheet.

“The group now has a sustainable level of debt for the scale of its operations and lending facilities for the next five years to enable and underpin the growth of our businesses. Despite some extreme challenges, our manufacturing group delivered healthy operating profits (pre-exceptional items) of €24.2m in 2011. The restructuring phase is now complete and the foundations are in place for the next phase of our business turnaround.”

The directors’ report says the profit and loss account reflects net exceptional gains of €87m from the restructuring and €149m impairment charges relating predominantly to the construction division. Pre-tax losses at the group declined from €175.6m to €44.3m last year. A tax credit of €19.7m reduced the losses further, to €24.5m

The directors’ report says the group has prepared a five-year plan and “current trading performance is ahead” of the plan.

The manufacturing group is split into four business divisions: Container glass, construction industry supply, radiators, and plastic and packaging.

The restructuring has resulted in the manufacturing group being relieved of €794m of debt owed to group parties and receiving capital contributions of €152m from Quinn Insurance Ltd.

Appointed in March of this year, chairman Mark McTigue said: “The restructuring has given the necessary financial stability to the manufacturing group which my board colleagues and I believe the businesses can sustain and which will continue to help to protect jobs into the future.”

The group’s net debt at the end of Dec 2011 was €469m. Staff costs declined from €102.6m to €96.6m as staff numbers fell from 2,746 to 2,625

Shareholder funds stood at €299.1m compared to a shareholders’ deficit of €424.8m in 2010.