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ISEQ in lacklustre start to 4th Quarter

Monday, October 01 17:50:05

The ISEQ started off the last quarter of 2012 much as it left the third with a day of lacklustre trading and a flat closing price.

The index was up 1.04 points to 3,279.32.

Across Europe, investors set aside worries over the growth outlook and Spain's debt problems today, taking fresh positions in European equities at the start of the new quarter and selling safe-haven German bonds.

At home, shares in DCC jumped 16c to E22.56 after it announced the completion of the acquisition of BP's LPG distribution business in the UK. The acquired business will be held separately from DCC's existing LPG distribution business in the UK, pending completion of a review by the Office of Fair Trading (OFT). The BP LPG distribution business has commercial and domestic customers with an annual volume of approximately 87,000 tonnes of bulk and cylinder LPG. It has 116 staff and operates from a network of 13 locations throughout the UK with a fleet of 62 delivery vehicles (haulage services are principally outsourced). The business's footprint is highly complementary to that of Flogas, DCC's existing LPG business in Britain, which has annual sales volumes of approximately 190,000 tonnes. The total consideration for the BP business is E51.3m on a cash-free/debt-free basis to be satisfied in cash at completion. The net tangible operating assets of the business at December 31st 2011 were approximately E38m.

Davy are upgrading forecasts for United Drug Group (UDG) to EPS growth of 9pc and 7.5pc for the years ending September 2012 and September 2013 respectively. A first estimate for September 2014 calls for 9pc EPS growth. "Our upgrades reflect the impact of myriad United Drug (UDG) acquisitions in recent months, updates for FX movements and an underlying upgrade associated with trading in the first nine months. For YE September 2012, our forecast EPS growth is increased to 9pc (24.85c), primarily due to better-than-expected trading in the Packaging & Speciality division (especially Sharp). However, the more significant adjustments occur on cash-flows and the balance sheet. Summer acquisitions mean that net debt is now forecast to reach almost E230m, equivalent to 2.6x EBITDA - though the minimal EBITDA flow from acquisitions in the period means that this measure is misleading," the broker said.