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ISEQ lower as Greece deal awaited

Monday, November 26 09:17:00

The ISEQ is lower this morning at 3,261, down just 3 points on Friday's close as markets await deliberations on Greece's debt. NCB Stockbrokers looks at Origin Enterprises this morning:

Origin Enterprises released an in line Q1 IMS this morning. Agri-Services' underlying revenue increased 3.4pc to E351.2m with the weaker Euro contributing 7.8pc growth.Little detail is given in the outlook, as would be expected at this early stage of the year. Management warns that this year will have an increased level of seasonality due to the poor weather. C.92pc of Agri-Services profits were generated in H2 last year so it is possible profits will be negligible or negative in H1 this year. Our expectations are for c.5pc EPS growth this year and we are unlikely to change our estimates at this early stage. We believe the long-term growth prospects are good. We expect further exits from the remaining small Associate stakes when conditions allow and further acquisitions in the agri sector.

We believe Origin has significant opportunities to grow market share and revenue per customer in the UK, but also has significant opportunities to recreate its Agrii business model in other European markets, particularly in Eastern Europe. Origin currently trades on c.8.9x our FY13E earnings and c.7.6x EBITDA, including dividends from Associates. While the stock deserves to trade on a discount due to its lack of liquidity (only c.32pc free float), we believe it continues to offer value and we reiterate our BUY recommendation according to NCB Stockbrokers.