InterBulk drives safely back to profit helped by China growth

STRONG growth in global markets including China and Russia have helped East Kilbride-based logistics group InterBulk - one of the investments in Jim McColl's business empire - return to the black.

The company, which provides specialist services and containers for transporting hazardous chemicals, food and minerals around the world, yesterday reported a pre-tax profit of 1.77 million in the year to 30 September, compared with a loss of 2.75m the previous year, after revenues rose by 17 per cent to a record high of 273m.

Chairman David Rolph hailed the "robust" performance and said improved economic conditions gave the company - which is a world leader in some of its markets - a strong platform to push ahead.

"Much has been achieved including a return to growth in what was a record year in terms of revenue," he said. "The actions taken by our team, our flexible business model and a strong customer service performance have enabled us to achieve further growth as market conditions have improved."

Shares in InterBulk edged up on the news to close at 5.62p, a rise of 0.12p.

Earlier in the year Rolph expressed concern over the continuing low share price. Although the shares have risen by more than 40 per cent since then, finance director Scott Cunningham yesterday told The Scotsman he believed there was still some way to go before the market capitalisation reflected the board's view of the company's value.

During the year the group's liquid bulk division, which mainly transports chemicals, enjoyed a 23 per cent rise in revenues and saw a significant expansion of its fleet of tank containers.

It benefited from a strong recovery in the chemical industry with production in the Asia Pacific and Middle East regions reaching new records although Europe and the US still remain below their historic peak.

China, which along with the Middle East is expected to see the bulk of global investment in new chemical industry capacity over the next three years, is a major focus for growth and InterBulk has recently strengthened its team in its two offices in Beijing and Shanghai.

Overall revenues in the group's dry bulk goods division rose by 11 per cent during the year.

Higher interest costs following new banking arrangements in place since 2009 reduced profits before tax by 1.6m although agreements secured since are expected to reduce interest expenses next year, and net debt was cut by 8.8m during the year to 109m.

Rolph said the company's prospects were dependent on economic growth in its key markets. "The majority of our customers are reporting improvements in earnings and higher confidence levels," Rolph said."However, uncertainty and volatility remain driven by concerns over the fragility of the global economy."

Earlier this year, Hoyer Internationale Fachspedition, a German logistics group, increased its stake in InterBulk to more than 23 per cent although has not added to it since. McColl also holds 5.6 per cent of the shares.

The company's largest shareholder is Atorka Group, the Icelandic investment company that also owns a stake in Clyde Process Solutions, which recently agreed to a 33m takeover by German firm Schenck Process.