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Irish Glass closure causes loses to Ardagh

Ardagh, which closed its Irish Glass Bottle Company with the loss of 375 jobs earlier this year, has reported an operating profit from continuing operations of EUR 14.6 million in the first half.
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Ardagh, which closed its Irish Glass Bottle Company with the loss of 375 jobs earlier this year, has reported an operating profit from continuing operations of EUR 14.6 million in the first half. However, the losses at Irish Glass contributed to an overall operating loss of EUR 439,000 at the group and a loss before interest and tax of EUR 930,000. The company said performance in the first six months of 2002 was satisfactory and ahead of budget, with turnover up by 6.5% to EUR 148.7 million. Ardagh said Irish Glass incurred a trading loss of EUR 1.07 million, while the results also include a provision for its closure of EUR 14 million. Of this, EUR 11 million relates to redundancies although the industrial dispute over the terms of severance pay has not yet been settled. However, Ardagh believes that the realization of working capital tied up in the Irish Glass operations will provide most of the cash required to fund the closure costs. Looking ahead, Ardagh said tradition conditions in Britain were improving due to increased market demand. The acquisition of Consumers Glass Italy was completed at the end of July and its operations will be reflected in the second half results. “Overall, the group expects to be able to deliver further earnings growth in the second half of 2002,” Ardagh said. However, the company is paying no interim dividend as profits and cash generated from the British and Italian businesses cannot be used to fund dividend payments, it said. Instead, its current lending agreements require that the company“s debt, which stood at EUR 257.6 million at the end of June, be reduced. Ardagh chief executive Eddie Kilty said shareholders would not receive a dividend until such time as the company could secure an alternative source of income through the use of warehousing capacity at its Ringsend site. It is currently in litigation with Dublin Port Company, from whom the site is leased, over the use of the site. Meanwhile, Ardagh, which failed in its bid to acquire the Canadian assets of glassmaker Consumers Packaging in 2001, is now actively pursuing acquisition opportunities in Europe, Kilty said.

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