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ISEQ closes the week modestly higher

Friday, August 10 17:36:18

The main Dublin shares index closed the week modestly higher today, keeping its position above the 3,200 level.

The ISEQ index was up 13.01 points to 3,240.61.

European shares fell today after a five-day winning streak, as weak Chinese economic data and declines in bellwether Swiss food group Nestle pushed markets down from four-month peaks. The FTSEurofirst 300 index fell 0.4 percent to 1,096.85 points, while the Euro STOXX 50 index declined by 0.7 percent to 2,420.84 points. But the Eurofirst 300 remained on track for its 10th straight week of gains, which would mark its longest winning run in seven years, having risen 0.5 percent on Thursday to close near its 2012 intraday peak.

At home, shares in Bank of Ireland were flat at E0.10 after it said its underlying operating profit slumped by two-thirds in the first six months of the year as cuts in central bank interest rates put pressure on its margins and mortgage arrears mounted. The only Irish lender to avoid nationalisation after an unprecedented property crash, the bank said it remained on track to meet its restructuring targets under Ireland's EU/IMF bailout. But chief executive Richie Boucher said it would be "very challenging" to meet its own target of increasing its net interest margin - the gap between what it charges for loans and what it pays to borrow - to 2 percent by 2014 after it fell to 1.20 percent in June from 1.33 percent a year earlier. "The first half of 2012 has been a very difficult environment," Boucher told journalists. "The very low level of official interest rates has adversely impacted on our earnings rates and therefore our income." "I think with the steps we have taken, we will see that the margin will start to strengthen from here," he said.

Shares in Kingspan climbed 33c to E7.08 after it today said it has bought ThyssenKrupp Construction from its parent group for E65m in cash and a Middle East firm for USD38.6m (E31.4m).

In a statement this morning, Kingspan said it has entered into an agreement with ThyssenKrupp Steel Europe AG to acquire 100pc of the share capital of the various companies which comprise ThyssenKrupp Construction Group, the leading European insulated panels business.

ThyssenKrupp Construction Group, which includes market leading brands including Hoesch, Isocab and EMS, has seven well invested manufacturing plants in Germany, France, Belgium, Austria and Hungary. The business had sales in the year to 31 March 2012 of E315m and recorded an operating loss of E5.7m in the period. It has gross assets of circa E101m. The purchase consideration is circa E65m, of which circa E50m is payable in cash on completion and circa E15m represents assumed past service pension liabilities. The consideration is based on acquiring the business free of cash and bank debt and will vary depending on the timing of completion. The agreement is subject to local regulatory approval.

Separately, Kingspan also announced that it has agreed to acquire 100pc of the share capital of Rigidal Industries LLC, a leading Middle Eastern manufacturer of composite panels and roofing systems based in Dubai with an extensive route to market in the Gulf region. It had sales of USD39m in the year to 30 June 2012. The consideration, on a debt free cash free basis, is USD38.6m of which USD30m is payable in cash on completion. Completion of the acquisition is subject to local approval.