Wednesday, June 27 17:41:13
The ISEQ rebounded today as investors went for sold-down stocks with C and C leading after an upbeat interim management statement and full year forecast and ahead of a meeting of the ECB on rates.
The index rose 40.07 points to 3,066.23.
Shares in C and C rose 6c to E3.23. The company expects operating profit for the full year to be in the range of E112-118m. Davy are moving their forecast to E115m, the mid-point of this range, from E117m. As shown in recent Nielsen/CGA data, tough comps and poor weather in the UK and Ireland resulted in weak cider numbers in Q1. Tennent's performed well (+48pc volume growth in Ireland and 5pc revenue growth in Scotland) in difficult conditions and grew its earnings. The export division continued its strong organic sales growth. C and C says that the core Republic of Ireland (ROI) and UK cider business will see an increase in commercial support and brand activity over the next nine months and anticipates a recovery in volume and revenue. Q2 comps are easier, the broker says, in Q1 last year, Magners GB volumes rose strongly, up 14pc, aided by the one-off benefits and weather, but declined 6.4pc in Q2. Bulmers volume rose 2.7pc in Q1 last year but declined 8.8pc in Q2. In exports, C and C expects the 25-30pc growth trend to continue for the rest of the full year.
Elsewhere, shares in Kerry Group climbed 30c to E33.80 and CRH rose 28c to E13.92.
Arrow Electronics received approval for the purchase of Altimate, the enterprise distribution business of DCC SerCom. DCC had first announced the disposal on April 3rd 2012 for E48.1m. "This deal was widely expected to be approved by the EU Commission. We believe this is a positive for the company, allowing DCC Sercom to focus on more core operations of retail (consumer electronics) and reseller (laptops, printers, etc) distribution businesses which have good market share," according to broker's analyst, Joshua Goldman. Shares in DCC fell 28c to E18.07.
United Drug (UDG) has announced the acquisition of Watermeadow Medical (WM) for a total consideration of £13m of which £6m is payable in cash on completion and the remaining £7m due in 2 years, subject to the company achieving certain financial targets. WM is a communications and consultancy business similar to UDG's Informed business, which prepares materials for pre-launch pharmaceutical products. It is predominantly based in the UK, but has offices in the US and clients in Europe. "This deal, although small, represents another step forward for UDG and will be incrementally accretive to earnings with a return on capital of 15pc. There will be no accretion in the current year as many of the costs associated with the deal will be expensed. However, after deducting interest and taxes, we expect the deal to add c. 0.6c to earnings per share from 2013 onwards. We currently forecast EPS of E27.3c in FY13. We have a 'buy' recommendation on United Drug and a target price of E3," said Goodbody's Donal O'Neill. Shares in UDG were flat at E2.05 after early losses.