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ISEQ stays flat in lacklustre trading

Thursday, November 01 12:43:27

The ISEQ put in a lacklustre morning's trading with investors finding few leads and with European stockmarkets closed for a holiday.

By 12:30, the ISEQ was up 3.53 points to 3,252.02.

Markets saw mixed trading yesterday, with the DJIA closing -0.08pc after initially rising following the two-day closure, while the S and P 500 closed up 0.02pc. In Europe, markets were down with the FTSE 100 closing down 1.15pc and the STOXX 50 down 0.49pc. With many European markets closed today for a public holiday, analysts will focus on PMI data for the UK and Spain with manufacturing expected to have declined in both countries again in October.

Shares in CRH rose 2c to E14.28. MDU Resources, the fifth-largest aggregates producer in the US, overnight reported strong Q3 results from its construction materials and contracting business. The unit saw sales and earnings improve 6pc and 36pc respectively versus Q3 2011. Meanwhile, Boral, Australia's largest building materials provider and a leading brick producer in the US, issued a weaker than expected trading update.

DCC has announced (November 1st) the completion of the Benegas acquisition. DCC announced yesterday that the OFT had accepted hold separate undertakings by DCC in relation to the acquisition of BP's UK LPG distribution business. Shares in DCC climbed 2c to E22.07.

Since the acquisition of Otis Spunkmeyer in 2006 for $560m, Aryzta Food Group has deployed a further E1bn-plus on acquisitions, predominantly in the US. The capital invested in acquisitions has led to a significant expansion of the asset base in North America. Davy said that it is fair to say that returns on capital have lagged, although we recognise that the time-frame we are considering is relatively short. Management recognises the need to increase returns and has set about implementing an extensive transformation programme (ATI) costing E400m. "Harnessing greater value from the existing asset base (both intangible and fixed) via the ATI is a critical development for ARYZTA. The group has set an ambitious target of 15pc return on investment (ROI) by 2015. Any incremental advance in returns should feed into a higher rating for the shares. The shares have little priced in by way of success for ATI. Our derived valuation for the food division implies an EV/CE of 1.21x, which reflects historic returns within the food group but lags other names in the ingredients sector," said analyst, Cathal Kenny. Shares in the group jumped 83c to E38.33.