What a difference a year makes. This time last year, dairy co-ops – including Glanbia, Dairygold, Lakeland, and Kerry – looked set to be in for a €78m cash windfall from the proposed flotation of One51.

However, that seems like a distant memory now, after the flotation was shelved, as certain minority shareholders didn’t want to proceed with the deal.

The offer at the time was to bring IPL – the Canadian plastics company for which One51 paid €203m for a 67% stake in 2015 – into One51 by swapping the other 33% held by the Canadian investors for shares in One51 at a value understood to be €38m. In addition, the Canadians were to invest €20m cash in One51.

The group would then move off the grey market and float on the main stock market. This would have seen the co-op’s shareholding diluted from 30% to 15% of One51, effectively owning a smaller portion of a larger pie.

More importantly, it would have allowed One51 to take full control of IPL, giving it access to the attractive cashflows.

The group would have been debt free by the end of 2016 with a much more focussed plastics business, and the financial flexibility to grow organically and through acquisitions.

It would also have allowed the shareholders, especially the co-ops and farmer shareholders, to divest their stakes – either in part or in total. It was believed that this is something the co-ops would have done, on the more liquid and regulated stock market.

Many of the co-ops viewed this as a legacy non-core investment, coming in the main from IAWS times.

This is not surprising, given the amount of investment in processing capacity, related to the expansion in milk supply.

Patient shareholders

Longstanding shareholders have been very patient with One51 over the years. Despite recent share value recovery the early years were difficult. Furthermore, One51 has never paid a dividend.

One51 has offloaded a number of investments and businesses, including Irish Pride, as it got back on track. Outside investors could see the potential and were mopping up shares, causing the share price to double over the last three years.

This saw One51 receiving a takeover bid from the private equity group, Capvest, which valued the unlisted plc at €288m or €1.80 per share in 2015. But this didn’t gain the necessary support from shareholder, as many believed the company to be worth more.

Plans to divest environmental businesses

One51 which disposed of its Irish metals-recycling businesses in October 2016 is now set to divest its environmental-services operations, both in Ireland and the UK. This will allow it concentrate on its core plastics business.

ClearCircle, the environmental services business and the now disposed of metals recycling business generated revenue of €102.8m in 2016 and had earnings of €10.3m.