Quinn 'comfortable' with €500m profit projection

The Quinn Group has said it remains "comfortable" with projections of profits between €400m and €500m this year, despite suffering a 40pc drop in sales of "cement and related products" in the first quarter of the year.

The fresh guidance was given in an update posted on the company´s website and followed initial predictions of 2009 earnings in a New Year´s message from the group´s founder, Sean Quinn.

At that time, the billionaire said his diversified empire, which includes everything from hotels to insurance to radiators, would "comfortably generate cash profits of between €400m and €500m" before exceptionals in 2007, 2008 and 2009.

Challenging

In the latest update, the Quinn Group makes reference to the "challenging period for the world economy and Ireland in particular" and admits that "trading levels are down overall" for the first quarter.

The statement adds that Quinn "continues to enjoy superior margins to its competitors" and has "resisted the temptation to reduce prices below economically sustainable levels", leaving the group on course for its €400m to €500m cash profits.

Across businesses, Quinn says sales of "concrete and related profits" have dipped 40pc, while "sales of insulation products, glass and packaging [have been] bolstered by continuing higher-than-expected exports".

Quinn also says its hotel and leisure division - which includes the Slieve Russell Hotel and a number of Dublin pubs - "has continued to trade positively", although average consumer spend has fallen "as expected".

Meanwhile, Quinn Packaging has "steadily increased" the volume of fresh meat and dairy product containers in production over the first quarter and is now operating at 70pc of capacity.

The performance of Quinn´s sizeable general insurance division is not detailed. However, it is understood that the insurance business would have to return considerable earnings if the Quinn Group is to reach its 2009 profit targets.

The statement also notes various milestones hit by Quinn since the start of the year, including the addition of Quinn Healthcare´s 500,000th customer in April, the February launch of Quinn property´s Q-Park in Kazan, Russia, and the launch of the Quinn Group´s YouTube site.

As a privately owned company, Quinn has no onus to produce trading updates. However, the company structured itself more like a plc last year after its insurance division was hit with a multi-million euro fine for breaching regulations by loaning €288m to group companies.

In keeping with this plc-like approach, Quinn has made sweeping changes to boards across the group and is expected to issue near-quarterly trading updates in the future.