To say that One51 has had a turbulent past may be an understatement. At its peak, the investment company was valued in excess of €600m. Many co-ops, Larry Goodman and former Irish Nationwide boss Michael Fingleton, were among those that invested up to €300m in One51 during the boom.

After being established as an investment holding company, One51 went on a major acquisitions binge between 2005 and 2010. The company overleveraged while earnings imploded, leaving the company with little profits and huge debt.

Irish co-ops are already heavily invested in One51. Combined, today they own almost 50% of the now €125m-valued group.

Established in 2005 and eventually spun out from IAWS in 2007, Irish co-ops acquired 100% of the newly formed company effectively for free. Further investment rounds saw some co-ops invest €77m (circa €4/share).

In subsequent years, they watched their investment diminish as the share price plummeted to a fraction of the price.

However, over the last 12 months, shares in One51 have been trading up from 30c to highs of 110c. 10% of the shares have changed hands in the past year.

Heavy trading has again been seen since January, with 6% of the shares moving between parties for a weighted average price of €0.80. Last trade was at 100c on 18 July. Pageant, an investment fund led by Nick Furlong, has been actively buying and now holds about 12%, double its interest of this time last year.

It is important to understand that these shares are not traded publicly on a stock exchange, but are traded on the grey market, where stockbrokers match potential buyers with sellers.

In this dramatic turnaround, led by new chief executive Alan Walsh, the company has emerged from a period of restructuring as a more focused business with two core divisions – plastics and waste recycling. While legacy investments remain, the company is focused on divesting its non-core assets and, in particular, its 23.3% interest in NTR, the renewable energy company.

Growth back on the table

Growth is now firmly back on the agenda, as Walsh asks shareholders to invest again in One51. The company wants to raise up to €25m to fund growth by issuing shares at a price of €0.90-€1 per share.

This means that a typical co-op with a 3% shareholding today and wishing to maintain their position would need to invest €450,000 if €15m was raised, or about €750,000, should €25m be raised.

Earlier this year, a new €75m banking facility was put in place for a four- to five-year term and there is a possibility of another bank coming on board in the coming months for a further €25m. This marks a dramatic turnaround for the company where it has investors willing to buy shares and banks willing to lend it money again.

Besides being already invested, why should a co-op invest again? Firstly, One51 has significantly reduced its debt and fixed its balance sheet. Due to divestments, assets sales and capital redemption from NTR, net debt has fallen from peaks of €213m, to a more manageable €40.3m. This implies a net debt/EBITDA of two times, which is relatively low.

Secondly, 2013 was the first year since 2006 that a profit after tax was reported for One51. The group recorded earnings before interest, tax, depreciation and amortization (EBITDA) of €20.3m in 2013.

This suggests the company is trading today at about six times’ earnings. Assuming 2013 earnings continued an investor would recoup their purchase price in about six years.

Today, One51 is a transformed company and according to Walsh, the sale of Irish Pride along with other non-core businesses allows the group to focus on the growth of its plastics and environmental services businesses, where it holds strong market positions.

The divisions it operates, although cyclical, should experience growth with the upturn in the economy. The plastics market, while presently fragmented, offers opportunities for consolidation. Meanwhile, due to legislative drivers, there are growth opportunities in hazardous waste.

But even though One51 may appear fixed, there is still some tidying up to be done. The major challenge now for Walsh will be to successfully unwind the group’s interest in NTR.

The company is also understood to be working towards an IPO. Obtaining a listing on a recognised stock exchange would better recognise and allow for the realisation of shareholder value. This is likely to be some time off as the group tidies up its investments and would depend on market conditions at that time.

Today, there are enough reserves to complete the Straight deal and organic growth but not enough to give the company the firepower to grow. Over the next two years, the company needs this investment to bolt on opportunistic deals that may arise to ensure its growth.

Environmental Services

ClearCircle Environmental, with a turnover of €151.7m, is the umbrella brand for One51’s hazardous waste management business and the metals and materials recycling businesses. The businesses focus on Ireland and the UK markets.

The waste industry continues to evolve, driven by three main forces – economic and social change, legislation and government policy, and the emergence of new processing technologies. It must be remembered that this is cyclical industry and should benefit from an economic upturn.

Plastics

This division had a turnover of €99.2m last year and is the group’s largest division by profitability. It operates in Ireland and the UK, with a manufacturing base in China. These businesses were historically operated individually. However, last year a new management team was appointed with the objective to integrate the businesses.

While engaged in contract manufacturing today, the group expects to concentrate more on the proprietary business in the future.

In May 2014, One51 announced the acquisition of UK listed Straight PLC, a plastic container manufacturer, for a total consideration of £10.7m (€13.2m).

MGB Plastics provides 1m wheelie bins per year in the UK and with Straight would become the number one provider of recycling containers in the UK, supplying an estimated 30% of the UK market.

RPC is the leading supplier of plastic paint cans, a manufacturer of agri-food containers, and a manufacturer of infant formula caps.

Investments

Despite an aggressive disposal programme in recent years, the group continues to manage a significant investment portfolio, with interests in renewable energy as well as other investments, such as Greenore port.

One51 holds a 23.3% stake in NTR, which is made up mainly of two wind farms (350MW) in the US, a cash fund of €100m and a lump of assets. Tom Roche owns 40% and Pageant holdings owns 10% of NTR. NTR last traded at €1.50, which values One51s stake at about €34m.

Other investments include its 13.7% stake in Pioneer Green Energy, a 4.3% holding in Open Hydro, and a 50% interest in Greenore port in Co Louth.

The Board

The board has been substantially renewed in recent years with each director appointed since 2012, with the exception of Alan Walsh and Guy Hallifax.

Group chairman: Denis Cregan

CEO: Alan Walsh

CFO: Pat Dalton

Non executive directors: Paul Carroll, Rose Hynes, Guy Hallifax, Geoff Meagher