THE engineering group Powerscreen has reported a 20 per cent rise in interim pre-tax profits to £20.4 million sterling. Current trading is ahead of the corresponding period of 1995, according to chairman Mr John Craig. Markets are expanding in all of the company's three divisions and it is focusing on cash generation, he said.
Powerscreen's new plant in Kilbeggan, Co Westmeath, will manufacture recycling machinery. Part of the group's screening division, the 50,000 sq ft plant will start production in January and employ 160 people. As well as organic growth Powerscreen is currently looking to acquire a crushing plant in the US.
Group turnover in the six months to the end of September increased by 25 per cent to £152 million.Turnover from continuing operations was 21 per cent higher at £146.2 million, while acquisitions generated turnover of £5.4 million. Operating profit was 20 per cent higher at £20.8 million.
Margins were slightly lower - down from 14.3 per cent to 14.2 per cent - with higher margins in the screening and materials handling divisions offset by a drop in the margin on crushing and recycling.
Acquisitions produced operating profits of £113,000 showing a margin of 2.09 per cent. This low margin reflected the Pegson and US Truck Cranes acquisitions. Pegson was acquired in September 1995 and its operating margin, while increasing, is below group levels.
Chief executive Mr Shay McKeown said Pegson would be operating at group margin levels "by next year". US Truck Cranes, acquired in May, was a division of a large company and current low operating margins reflect the cost of setting up accounting and other systems for the new company.
Mr Craig said profits rose at each of the three divisions of the Dungannon company, which is the largest publicly-quoted company in Northern Ireland with a market capitalisation of just over £540 million. The company manufactures and sells screening, crushing and materials handling machinery.
In the screening division, sales increased by 15.5 per cent to £60.5 million. Profits were 16.6 per cent higher at £12.7 million and operating margins improved from 20.82 per cent to 21.02 per cent. Boosted by growing interest in recycling, demand for screen products increased in, all markets except for continental Europe.
In the crushing and recycling division sales rose by 56 per cent to £29.5 million boosted by strong demand in the Far East and the inclusion for the first time of the Pegson crushing company, bought last year. Operating profits improved by 23 per cent to £3.3 million but margins dropped from 13.96 per cent to 11.07 per cent.
In the materials handling division, turnover rose by 12 per cent to £59 million. Profits improved by 25 per cent to £4.7 million, reflecting improved margins, up from 7.11 per cent to 8 per cent.
Within this division, telescopic handlers manufacturer Matbro showed strong growth despite slower demand in Britain early in the year. Increased sales into the continental European market boosted turnover and, with strong order books, the operation is expected to produce stronger growth in the current half.
Benford, dependent on the weak British construction market, is expanding its product range and developing its export market Ben ford should become "a major player in the world compaction market over the next three years," according to Mr Craig.
With profits after tax up 20 per cent to £15.3 million, earnings per share increased by 19 per cent to 17.3p. Shareholders will get a 12 per cent increase in their interim dividend with a payment of 2.8p per share. They will be offered the alternative of taking their dividend in the form of more shares - a scrip dividend.
