Half-yearly results from engineering group Powerscreen international yesterday showed that the Northern-Ireland based company appears to have put most of its troubles behind it.
The company, which had to write off £47.6 million sterling (#52.15 million), due to irregularities, recorded group profits of £9.7 million (#10.8 million). The figures, for the six months to the end of September last, show that Powerscreen made operating profits from continuing operations of £12 million sterling (#13.4 million), compared to a loss of £7.4 million (#8.26 million) in 1997. Turnover from continuing operations was £117 million, compared to £112 million in 1997.
Earnings per share were 6.53p sterling compared to a loss of nearly 37p previously. However, the company is not paying a dividend, maintaining that it "would not be prudent at this time".
Bank debt (excluding finance leases) at the end of last September was £32.8 million, now reduced to £14.1 million. A two-year bank loan facility of £36.5 million is now in place and the money is being used for working capital, according to Powerscreen chief financial director Mr John Kennerley.
He said the company's disposal programme, which it embarked on last June, was largely complete and had generated £40.5 million. The company has undergone a series of changes since the new management took over, so effectively it is not the same company whose results are now being compared.
The company maintained that the interim results, which were audited, were more detailed than is usually the case with half-yearly figures. It said it was trading satisfactorily since the end of September.
Powerscreen, which is based in Dungannon, Co Tyrone, is on course to make full year pre-tax profits of £20 million - £25 million, in line with brokers' forecasts. The company now has three main divisions - screening, crushing and materials handling. Mr Kennerley said performance had been strong in all three divisions. He said sales in the screening division were £51.7 million for the six months to September last, with an underlying operating margin of 12.7 per cent, compared to 12.5 per cent.
The crushing business had sales of £18.9 million. The operating margin was 4.9 per cent, compared to 2.9 per cent for the same period the previous year.
"This is a business we see improving further," the company said.
Sales in the materials handling division were £46.6 million and the operating margin 13.4 per cent. The underlying margin for the same period last year was 8.9 per cent.
The company's underlying gearing figure is 30-35 per cent, compared to 98 per cent for the previous period.
Powerscreen chief executive Mr Brian Kearney said the company had turned in a "robust performance", despite the UK market being quite uncertain. "We have been developing our distribution network and when there is a significant upturn, we will be able to make the most of it."
He said the US markets had been boosted by the anticipated proceeds from a government-backed transportation programme which will strengthen the demand for materials used in road building.
He said it had difficulties in Asia, Africa and Russia, but because of events last year, Powerscreen had very little exposure in these markets. Overall, he added, activity levels in the screening division were lower. However, he said the ongoing development of new products would ensure that it continued to perform strongly in this sector.
He said there was an increase in demand in screening and crushing, where the company was focused on recycling. There was a lot of consolidation in the marketplace and the company was watching it "with interest".
He said the company had plenty of work to do to rebuild its business. It was improving its links with dealers and was reassessing its product design as well as reinvesting in manufacturing to cut waste.
