LISTED PACKAGING group Powerflute, which is headed by Irishman Dermot Smurfit, recorded strong profit growth from its continuing operations in the first six months of this year.
Operating profit rose to €6.9 million in the six months to the end of June compared with just €200,000 in the same period of 2010. Revenues rose by 15 per cent to €58.3 million.
The company said this was because of the “impact of higher average selling prices”.
Its delivered volumes were 5 per cent below the previous year due principally to an extended planned maintenance shutdown its Finnish timber plant.
These figures excluded the activities of the Scheufelen group of companies in Germany, which was sold in May for €38.5 million to Paper Excellence.
This deal has effectively left the company debt-free. It had cash of €27.9 million at the end of the half year and borrowings of €25.8 million.
On current trading, Mr Smurfit said: “We currently expect market conditions to remain broadly favourable and we remain confident that the group will perform well in the second half.”
About 85 per cent of Powerflute’s boxes are produced for fruit and vegetable products. “People still have to eat so, to a degree, we are a bit recession-proof,” Mr Smurfit told The Irish Times yesterday.
He added that the company could execute an acquisition of up to €100 million if the right deal presented itself because of its strong debt position.
“We have shown that we can buy well and sell well, and we continue to actively look for sensible opportunities.
Powerflute paid a dividend of 1 cent a share for the 2010 financial period last June. This amounted to €2.2 million.
The biggest beneficiaries of that payment were Mr Smurfit and his brother, Michael Smurfit, the former head of the Jefferson Smurfit packaging group.
Dermot Smurfit owns 15.6 per cent of the business while his brother, Michael owns 21.2 per cent through an investment vehicle called Bacchantes Ltd.
