Transportation equipment and services provider InterBulk Group reported lower revenues and profits in the year to September 2009 but there are signs of improvement in trading.
Revenues declined from £250m to £232m, while pre-exceptional profits fell from £4.61m to £2.97m. That doesn’t include the costs of renegotiating debt facilities or a £800,000 bad debt. There were also £400,000 of reorganisation costs.
Dry bulk revenues were lower because of the weak construction market hitting the transport of cement among other things. The weak polymer market was also a problem. Liquid bulk revenues and profits grew. New customers include AkzoNobel. Asian demand is resilient.
There is a general overcapacity in the tankcontainer market but utilisation rates are improving.
Net debt was £118m at the end of September 2009. Movements in the Euro increased the sterling figure. Interest costs will increase by £2m following the renegotiation of bank facilities. However, the cash costs will not be that much. The mezzanine debt is £33.8m and this has an interest charge of 12% but it is added to the principal. This means that cash flow will be stronger than profits.
House broker Arden forecasts a fall in profits to £500,000 in the year to September 2010 but operating profits will hold up much better than that.
At 4.25p a share, InterBulk is valued at £12.9m.
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