GedW16 Dec 2010 11:49
Good morning GedW, You will know the banking costs have eroded profits. As you do, I think the base line is solid and negatives will be dealt with by the navigators of this crew, and I feel next year will see growth. Perhaps an offer too. Despite debt which is no unique criteria for many successfull companies results were ahead of market expectations. The article below was featured in the Herald yesterday.___
Jim McColl, who last week as a member of the Scottish Government’s advisory council voiced his concern about banking costs, has seen profits at one of his investee companies cut from £3.4m to £1.8m by higher bank charges.
InterBulk Group yesterday reported a 17% rise in revenue for the year to September 30 and a £300,000 rise in underlying operating profit to £15.1m.
But the company said: “Higher (non-cash) interest costs following the new banking arrangements in place since October 1, 2009 reduced the profit before tax (before exceptional items and goodwill amortisation) by £1.6m to £1.8m.”
InterBulk is Europe’s biggest operator of ‘bag-in-box’ containers for dry bulk products and a major transporter of bulk liquids, including deep sea operations.
It is also one of two companies in Mr McColl’s Clyde Blowers empire which is listed on the Alternative Investment Market, the other being Clyde Process Systems which has just accepted a £33m bid from a German rival.
But Mr McColl, who had been critical of the AIM valuation of Clyde, said of his other listing: “InterBulk is a different size of company, it is performing well.” He added: “Debt is a bit higher than we would like.” InterBulk shares fell from above 9p to below 2p during 2008 but have rallied this year and rose 0.13p to 5.63p yesterday, valuing the business at just over £17m.
Net debt (including equipment finance) fell last year by £9m but still stands at over £109m. The group said: “New interest rate swap agreements secured for term debt will significantly reduce interest expense next year.”
Its liquid bulk business drove growth with a 23% rise in revenue, led by Russian and Chinese international tank container operations, while dry bulk enjoyed a “return to growth supported by InterBulk’s market leadership position”.
David Rolph, chairman, said the results were ahead of market expectations. “With a backdrop of improved economic conditions, we believe next year should allow us to push ahead from this strong base.”
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