Barlo Group, the radiator and plastics firm, continues to record a good recovery with a 36.8 per cent rise in pre-tax profit from £2.16 million to £2.95 million in the six months to September 30th 1997. Growth is continuing. "It is expected that this improvement will continue in the second half when the bulk of the group's radiator profits are traditionally earned," according to the interim statement. Group managing director, Dr Tony Mullins, said the group would continue to grow its businesses, noting that the latest results reflect strong revenue growth and increased margins.
Barlo does not give a profit breakdown by sector. However, a breakdown of sales shows a faster growth in its radiator business, which generated a 14.9 per cent growth to £31 million.
By contrast, sales in the plastics business generated pedestrian growth of 4.2 per cent to £27 million. The growth in radiator sales arose despite little overall improvement in the sector. The Irish market "remains buoyant", growth in the British market "has largely moderated" while markets in mainland Europe "were varied", according to the statement. A new high-output Veha radiator, introduced in the summer, "was well received". Barlo's radiators are said to have had a "very satisfactory first half and continue to benefit from the capacity and productivity investments of recent years". The new plant facilities are to be commissioned next spring.
The Veha European operation "increased its revenues" and, while this trend is continuing, Barlo said it would be next year before the benefits from a capital reorganisation come through. Merriott "had a good start".
The plastic businesses continue to operate in a stable environment. Demand for clear pvc sheet remained strong, Barlo said, and Stanley Smith had "enjoyed further revenue growth". Irish Ropes' sales were affected during the summer by the bad weather although a "satisfactory year" is expected due to a continuing strong performance in the plastic strapping and cold store businesses. Barlo continues to reduce its net borrowings which now amount to £13.8 million compared with £25 million two years ago. Gearing comes to 26 per cent.
The group has benefited from a lower interest charge, down from £876,000 to £640,000, and this should continue to fall. It also had the benefit of a small tax credit. With large accumulated tax losses there should be no tax charge for a number of years, Dr Mullins said. Reflecting real growth, earnings per share have risen from 1.22p to 1.65p. Shareholders are to benefit with a 12.5 per cent boost in the interim dividend to 0.45p.
Mr Frank Belton, who had been chairman for seven years, has resigned but will remain on the board until March 31st, 1998, the group's financial year end. Mr Niall Carroll, managing director of ACT Venture Capital, has become chairman. He has been on the Barlo board since 1976.
