Ardagh Glass Group warned of “very tough” trading conditions as it reported a loss of EUR 35.8 million for 2005. Paul Coulson, the chairman of the company spun off from Ardagh plc in 2003, told shareh…
Ardagh Glass Group warned of “very tough” trading conditions as it reported a loss of EUR 35.8 million for 2005. Paul Coulson, the chairman of the company spun off from Ardagh plc in 2003, told shareholders on 25 May 2006 that the group“s main problems are in the UK, where “hugely increased” energy costs have combined with overcapacity. “We believe that the next two years will be very difficult for all players, new and old, in that market”, he said. Ardagh is one of the three largest glassmakers in the UK, with its competitors including Quinn Glass, which has spent EUR 364 million on a new plant at Chester. Shareholders at Ardagh“s annual general meeting in Dublin, heard that trading in the first three months of 2006 had been ahead of budget. “However, budgeted operating profitability for 2006 is at a significantly reduced level due to the difficult trading conditions”, he said. Ardagh posted revenues of EUR 452.7 million in 2005, but registered a pretax loss of EUR 35.8 million after operating and finance costs. This resulted in a basic loss per share of EUR 1.37. Mr Coulson said that the firm“s cash and liquidity position remained strong. The chairman was questioned on a number of issues during the meeting by John Collins, the solicitor heading a group of Ardagh shareholders who are in dispute with the company. These shareholders, who own about 1.5% of Ardagh but owned about 3.5% of its predecessor, argue that the firm“s takeover in 2005 by Caona plc was not conducted properly. They are thought to be considering their legal options on the issue. Caona was a special special-purpose company controlled by some of Ardagh“s largest shareholders, including Mr Coulson. The chairman told Mr. Collins that the takeover was “a very good deal for shareholders” when it was completed and had become a better deal since in the light of market conditions. The dissident shareholders believe the directors of Ardagh, then registered in Guernsey, had a duty of care to advise them on whether the EUR 4 per share takeover was a good deal or not. Ardagh and Caona argue that it was up to the shareholders to decide on the merits of the takeover. Mr. Coulson claimed on 25 May 2006 that shareholder value in Ardagh and related company South Wharf had risen eight-fold since 2002. He said the takeover had been “an extremely appropriate transaction”.