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DCC, Smurfit, Aer Lingus lift ISEQ

Wednesday, February 06 12:52:07

A busy day for corporate news stories and interim statements sent the ISEQ sharply higher this morning with DCC, Smurfit Kappa and Aer Lingus making the heading.

By 12:45, the index had climbed 48.1 points to 3,578.11.

Irish packaging group Smurfit Kappa posted an 11pc rise in full-year pretax profit, buoyed by strong demand and increased exposure to high-growth markets such as Mexico. Shares in the group, which designs and manufactures paper-based packaging for the likes of Unilever and Procter and Gamble, were up 2.5pc at E10.30 euros, not far short of a five-year high of E10.64 set last week. Strong demand and a stable outlook also promoted Europe's leading containerboard and corrugated packaging producer to increase its final dividend 37 percent to 20.5 cents per share. Dublin-based Smurfit, formed through the 2005 merger of Jefferson Smurfit and Kappa Packaging, has for the last four years focused on paying down debt which stood at 2.79 billion euros at the end of 2012. The company, which last month successfully refinanced some of its debts with a 400 million euros note offering, said yearly pretax profit rose to 331 million euros ($448 million), boosted by cost controls, on revenue which was flat at 7.34 billion. "This is our second largest result since 2007 and this performance reflects the benefit of our continuing focus on operating efficiency," Chief Financial Officer Ian Curley told reporters.

Shares in DCC jumped nearly 5pc or E1.16 each to E25.91. DCC may join a long list of top Irish corporates to abandon its listing on the Irish Stock Exchange for London, its interim management statement said this morning. It said that it is considering whether to seek a listing on the FTSE UK Index series, which would result in the cancellation of its listing in Dublin as its business increasingly shifts towards the UK. "Since its original stock exchange listing in Dublin and London in 1994, DCC has achieved significant growth in scale and in geographic footprint. For some time, the majority of the Group's revenue and operating profit has been generated in the UK with most of the Group's development activity and expenditure since 1994 taking place outside Ireland. In addition, the profile of DCC's shareholder base has also changed significantly, with approximately 77pc of DCC's shares now held by institutional investors outside Ireland," the statement said.

Aer Lingus shares rose to E1,30 this morning after a strong set of full year results, reaching Ryanair's bid price after Ryanair sought to do a deal with two UK rivals to strengthen its chances of winning EU approval for a takeover.

Ryanair is seeking binding commitments from two rivals to compete with it as part of a last-ditch attempt to secure anti-monopoly approval for a takeover of Aer Lingus, a source close to the deal said. British Airways and Flybe have agreed in principle to increase their presence on the Irish market to allay concerns of the European Commission, Europe's anti-monopoly watchdog, but Ryanair is seeking a binding commitment approved by their respective boards, the source said. Ryanair stocks gained 4c to E5.59.