SHARES IN UK listed company Powerflute, which is headed by Irishman Dermot Smurfit, fell by 4.6 per cent in London yesterday in spite of a strong set of inaugural full-year results.
The shares closed at 67.5p, down 3.25p on the day. Powerflute's shares floated last May on the Alternative Investment Market at 1.10p.
The firm's sales rose by 18 per cent to €115.7 million in calendar 2007 while its operating profit increased by 89 per cent to €15.2 million.
Its profit before tax was up 117 per cent at €12.5 million while its earnings per share more than doubled to 10.3 cent.
Mr Smurfit, who owns some 19 per cent of the business and is a former deputy chairman of the Jefferson Smurfit paper and packaging group, told The Irish Times that the outlook for Powerflute was "very good" and demand for its product remained strong.
He said the company had "quite a strong pipeline" of potential acquisitions lined up. "I'd be disappointed if we haven't done something by the time of the first anniversary of the IPO [initial public offering] in May," he added.
Mr Smurfit said the firm has the capacity to complete an "earnings enhancing" acquisition for "north of €100 million".
This would be funded by debt. Powerflute's net debt last year declined to €25.6 million from €33.4 million.
Mr Smurfit said he was "very disappointed" at the recent performance of Powerflute's shares. "We floated at 110 pence and they are now at below 70 pence so that's no fun for anybody."
Powerflute makes Nordic semi-chem fluting that is used to help strengthen corrugated boxes used for the transportation of wet fruit and vegetables.
It is one of only three companies manufacturing this product and operates a 300,000 tonne-capacity paper mill in Finland.
The company's volumes rose last year by 5 per cent to 262,792 tonnes.
Analysts at UK-based Collins Stewart yesterday forecast that earnings would rise by 50 per cent in 2008. It expects the company's sales to rise to €130 million this year and has pencilled in earnings before interest, depreciation, tax and interest of €25 million, a rise of 22.5 per cent.
