Irish Continental Group PLC

Irish Continental Group PLC - Final Results

    Dublin (ots) -

    Financial Highlights
                                    2002                  2001
    Turnover                  EUR 325.8m         EUR 297.7m              +9%
    EBITDA                      EUR 63.2m          EUR 51.1m                +24%
    EBIT*                        EUR 34.9m          EUR 26.2m                +33%
    PBT                          EUR 24.1m          EUR 11.7m                +106%
    Basic EPS                  78.3c                    38.4c                 +104%
    Adjusted EPS**          85.0c                    51.6c                 +65%
    Net Debt                  EUR 157.4m         EUR 187.0m              -16%

    * EBIT is stated before goodwill charges     ** Adjusted EPS is EPS before goodwill charges

    Operational Highlights

  · Car carryings equalled year 2000 record of 400'000
  · RoRo units equalled year 2001 record of 185'000 units
  · Acquisition of HKCIL by Container division in July successfully
  · Commencement of EUR15m expansion of Dublin Container Terminal.
  · 5 year charters of Pride of Bilbao and Pride of Cherbourg in

    Share Buyback

  · 8% of share capital (EUR14.5m) purchased and cancelled via buyback programme while net debt also reduced by EUR29.6m (16%) to EUR157.4m.


    In comment, Chairman, Tom Toner stated,

    "We have regained momentum following the adverse impact of Foot & Mouth Disease on our passenger market in 2001. We continued to invest in the future of the business with the acquisition of HKCIL and the expansion of our terminal in Dublin, a total investment of EUR19m. We have reduced net debt by almost EUR30m while at the same time acquiring over EUR14m of our shares via our buyback programme. This underlines the resilience of our business model in a time of economic uncertainty. We look forward to the future with confidence".

    Results for the year

    Turnover for the year grew 9% to EUR325.8 million with the principal growth being in tourism traffic and container movements. EBITDA for the year was EUR63.2 million, up from EUR51.1 million the previous year while operating profit before goodwill charges for the year increased to EUR34.9 million compared with EUR26.2 million in 2001. The interest charge was down to EUR9.0 million from EUR11 million, reflecting reduced debt levels arising from our strong cash flow. Profit before tax for the year amounted to EUR24.1 million compared with EUR11.7 million the previous year. Following implementation of FRS19, which requires full provision for deferred tax there was a tax charge of EUR3.1 million (12.8%) compared with EUR1.5 million the previous year. Earnings per share were 78.3c, up 104%. Adjusted EPS, i.e. EPS before goodwill charges were 85.0c, up 65%.


    In the seasonally more significant second half of the year, sales were EUR180.6 million (EUR160.0 million the previous year), EBITDA was 19% higher (EUR43.0 million vs EUR36.1 million) and profit before tax was EUR20.8 million compared with EUR13.4 million last year


    We have decided to institute a share buyback as a means of delivering shareholder value. We had already been in the process of paying down debt (which had peaked at EUR214 million in June 2001) with the surplus liquidity available from our strong cash flow. In November and December of the year we acquired 2.16 million shares (8%) of the issued capital, at a cost of approximately EUR14.5 million. The Group will continue to focus on generating value for shareholders in the coming year.


    In the light of the continuing share buyback programme it is proposed to adjust the level of dividend growth. The proposed final dividend is 12.825c per share.  This is an increase of 12.5% on last year's final dividend making a total increase of 15% for the year. It is proposed to pay this dividend on 16 May 2003 to Shareholders on the Company's register on 22 April 2003.


    The Ferries Division includes the activities of Irish Ferries, the ferry chartering business and the travel services activities. EBITDA in the division rose from EUR46.9m to EUR55.5m while profit before interest in the division was up 28% at EUR31.2 million (2001: EUR24.4 million) on turnover of EUR204.5 million (2001: EUR187.4 million).

    Passenger revenue recovered from the adverse impact of foot & mouth disease the previous year while freight revenue was broadly unchanged for the year reflecting a slowdown in trade to and from Ireland. During the year we operated a total of 4,821 sailings, similar to the previous year's 4,867 sailings.

    Irish Ferries - Passenger Revenue

    In a tourism market influenced by world political and economic uncertainties our overall passenger numbers were unchanged on 2001 at 1.76 million. However, within this, car passengers increased by 5% offsetting an 8% decline in the lower yield foot passenger volumes. On the Dublin/Holyhead and Rosslare/Pembroke routes, passenger numbers were broadly unchanged at 1.54 million. On the Ireland/France route, passenger numbers were up 6% to 0.22 million.

    Across our route network car carryings increased by 5% to 400,000 (2001: 382,000 cars). On the Dublin/Holyhead route, car carryings were up 4.6% while the Rosslare/Pembroke route saw an increase of 2.1%. Car volumes on the Ireland/France route were up 10.9% on the previous year.

    Irish Ferries Roll-on Roll-off Freight Revenue

    It was a more difficult year for RoRo freight than in recent years, evidenced by the filing for insolvency protection of one of our competitors on the Ireland-UK freight market. For us it was a year of consolidation on both corridors of the Irish Sea with our total carryings unchanged at 185,000 trucks. On the Dublin/Holyhead route, a 2.6% increase in freight units to 122,000 was achieved by m.v. Ulysses. On the Rosslare/Pembroke route there was a 6.4% decrease in carryings to 58,000 units due mainly to additional capacity from our principal competitor.  On the Ireland/France route, 2,800 trucks were carried, in line with the previous year. Overall freight revenue was unchanged.


    The 2,400 bed cruiseferry, m.v. "Pride of Bilbao", continued on bareboat charter to P&O Ferries and during the year we concluded an extension of the original 1993 charter for a further period of 5 years to October 2007. We have also chartered the m.v. "Isle of Innisfree" (now renamed the m.v. "Pride of Cherbourg") to P&O, for a period of 5 years from July 2002. This modern vessel operates a combined passenger and freight service between Portsmouth in the UK and Cherbourg in France replacing two older ferries. The charter of m.v.  "Egnatia II" ended during the year and, in accordance with the charter agreement, ownership of the vessel transferred to the charterers.

    Travel Services

    Due to a continued difficult trading environment for the traditional High Street travel agent we restructured our agency division with the closure of 3 of our 9 branches and the transfer of their business to the remaining outlets. This will reduce costs substantially. however had another outstanding year with annual bookings up 82% in the last 12 months, generating substantial savings in distribution costs.


    Our Container and Terminal Division comprises our lift on lift off freight network operated by Eucon, Eurofeeders and Feederlink together with our Container Terminal in Dublin (DFT). It was a year of continued progress in the division. Turnover was EUR122 million (EUR110.8 million the previous year). EBITDA rose from EUR4.2 million to EUR7.7 million while an operating profit before goodwill charges of EUR3.7 million was generated, up from EUR1.8 million in 2001. This result was achieved despite some once-off costs due to the redevelopment of the Dublin Container Terminal.

    Container Lift-on Lift-off Freight

    During the year we acquired Hudig & Kersten Continental Ireland Line ("HKCIL"), for a consideration of EUR3.8m. This infill acquisition complements our existing Ireland-Continent Service, Eucon. This acquisition, which was completed in July, has been successfully integrated into our existing container freight service. The acquisition increases our container fleet, strengthens our sales network particularly in Holland and also gives us greater flexibility in scheduling. As the operation has been fully and successfully integrated with our own operations is no longer separately identifiable and we have eliminated the goodwill on acquisition of EUR1.8 million via an immediate once-off charge to the profit and loss account.

    Total container freight volumes carried on our own services rose 20% to 444,000 twenty-foot equivalent units as we incorporated HKCIL into our operation. On a like for like basis, the underlying increase in volume was 11%, the  growth principally in feeder traffic. The pricing environment, particularly for export cargo from Ireland remains difficult.

    Dublin Container Terminal

    During the year we commenced the third phase of our redevelopment of the terminal. Three additional mobile gantries and one additional Liebherr built ship to shore crane have been ordered and are being commissioned during 2003.  This resulted in some additional once off costs in 2002. The development will not be complete until late in 2003 and in the meantime our capacity to grow volume will be somewhat restricted. When complete however it will copper-fasten DFT as the premier container terminal in the country. From 2004 onwards we will be well placed to resume strong volume and revenue growth at the terminal. The prospects for the terminal will be enhanced further when the Dublin Port Tunnel, which will be located only 1 km from our facility, opens in 2005, allowing rapid access to and from the port, bypassing the congested city centre.


    In the light of the recent difficulties experienced by Ireland's tourism market we made a case, in 2001, to Government that we would be prepared to invest in new tonnage for our highly seasonal Continental ferry service if a public service obligation ("PSO") structure could be put in place, similar to that employed in other European peripheral regions. This proposal was not accepted. It is now of concern to us that our competitor Brittany Ferries appears to be utilising previously granted state aid for an expansion of their service between Ireland and France. This will severely damage the economics of our existing service and may lead to its closure. We have drawn this to the attention of the European Commission.


    Deferred Taxation

    In this preliminary statement we have implemented FRS19 Deferred Taxation. The implementation of FRS 19 means that the results and balance sheet for 2001 are restated. The effective tax rate for the year was 12.9% (12.8% the previous year restated).


    In accordance with approved accounting standards, we continue to account for pensions in accordance with SSAP24. In the light of current stock market conditions we decided to accelerate the actuarial valuation of our pension schemes. Based on the updated actuarial valuation as at 1 April 2002 our SSAP24 pension credit reflected in these financial statements for 2002 has reduced by EUR3.3m, although the fund remains in surplus. There is also a surplus of EUR5.9 million on the FRS17 basis at 31 December 2002.


    EBITDA amounted to EUR63.2 million for the year (2001: EUR51.1 million). Total investment in the year amounted to EUR15.4 million. Year-end net debt amounted to EUR157.4 million giving a comfortable gearing level of 85% (97% in 2001). Interest cover was 3.7 times (2001: 2.1 times). Year-end cash balances amounted to EUR14.6 million. Shareholders' funds at year-end amounted to EUR185.9 million.


    The outlook for 2003 is clouded by the global economic and political environment, which remains uncertain. Tourism volumes in our markets have more or less recovered to the peak 2000 levels and the challenge now is a resumption in growth in tourism to Ireland. The outlook for RoRo and LoLo freight volumes will depend on world and European macroeconomic conditions, where prospects are somewhat unclear.

    Following our recent investment programme over the last 5 years we now have one of the most modern fleets in short sea unitised shipping leaving us well positioned to compete in this challenging environment and make further progress in the current year.


    All comparative figures are for the 12 month period to 31 December 2001 (unaudited) and the balance sheet as at that date (audited).

    Thomas C. Toner     Chairman

ots Originaltext: Irish Continental Group PLC

Eamonn Rothwell
Managing Director

Garry O'Dea
Finance Director
At Dublin 01-6075628

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