Ardagh Glass, the glass bottle maker controlled by financier Paul Coulson, saw a leap in its gross profit of 150% to EUR 43.6 million in the 1Q 2008. Sales at the company doubled to EUR 314.9 million …
Ardagh Glass, the glass bottle maker controlled by financier Paul Coulson, saw a leap in its gross profit of 150% to EUR 43.6 million in the 1Q 2008. Sales at the company doubled to EUR 314.9 million following its purchase of the container glass unit from UK packaging group Rexam in 2007. The EUR 660 million deal which was completed in June 2007 launched the company into the top three glass bottle manufacturers in European market, alongside French group Saint-Gobain and US firm Owens-Illinois. On a pro-forma basis, combining the figures of both companies before the merger, gross profit rose 15% on the same period 2007 as sales edged a mere 0.6% higher, according to a report issued to the highly-leveraged group“s bond holders. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped from EUR 20.4 million to EUR 63.1 million. The group had EUR 1.1 billion of borrowings at the end of March 2008, including EUR 168.3 million of “payment-in-kind“ (PIK) notes, where interest payments accrue at an annual rate of 10.75% up until they mature in 2015 or are redeemed beforehand. Excluding the expensive PIK notes and EUR 52.4 million of cash at bank or in hand, Ardagh had net debt of EUR 881.4 million, the vast majority of which will mature between 2013 and 2017. The group had undrawn credit lines of up to EUR 145.6 million at the end of the period, and shareholders“ funds stood at EUR 102.2 million. Mr Coulson holds a 22% direct stake in the company, and 13.1% through his one-third stake in Yeoman Capital, which owns 39.3% of Ardagh Glass. Other senior Ardagh managers own about 15% of the stock, with private investors mainly accounting for the remaining 23 to 24%. The business is a result of the Mr Coulson“s orchestrated demerger of the Ardagh group in 2003. This saw Ardagh Glass become a privately-held operating company and Ardagh plc (subsequently renamed South Wharf) maintain its Dublin listing as a holding company for the long-term leasehold on a 25-acre site in Ringsend, Dublin. South Wharf was acquired by a consortium led by developer Bernard McNamara in late 2006 for EUR 412 million. Moody“s, the leading credit ratings agency, raised its outlook on Ardagh Glass“s ratings to “positive” from “stable”, believing the group can sustain the strong turnaround of 2007. Moody“s still rates the highly indebted group a “B2“, 14 levels below the agency“s top “triple-A“ rating. The group“s pro-forma EBITDA rose 38% to EUR 232 million in 2007, boosted by its ability to pass on higher raw material costs to customers.