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Economic woes send ISEQ lower

Friday, March 01 12:59:40

The ISEQ slipped further in to the red this morning amid fears of recession in the UK and stagnation in the eurozone economies.

By 12:45, the index was down 19.81 points to 3,736.96.

European shares fell sharply and the euro slipped towards a two month low on Friday, as weak economic data from Italy, France and Britain added to concerns about possible U.S. spending cuts and political stalemate in Rome.

British manufacturing shrank unexpectedly and new orders dwindled in February, while France's factories suffered their 20th consecutive monthly fall in orders, new surveys showed.

It points to a largely poor start to the year for all of Europe's big economies barring Germany, which continues to grind out improvement. Its manufacturing sector grew for the first time in a year as export orders hit a 21-month high.

Kingspan stocks were flat at E8.90. Recticel has reported FY12 results this morning and the division of interest is insulation. Sales for this business were down 1pc for the FY but declined by 11-12pc in the fourth quarter (+3pc 9mths). This reflected softer construction markets and difficult comparatives in Q4'11 (+31pc) when there was significant buying ahead of price increases. EBIT margins were down 150bps yoy. "Kingspan has reported a similar top-line performance with sales up 2pc (-1pc ex-currency) in FY12 with similar trends geographically. However, it was able to increase margins by 70bps which highlights the flexibility that Kingspan has to move customers into higher value add products like Kooltherm. In addition, despite the expectation that markets will remain difficult we are comfortable that Kingspan can grow profits in FY13 with an on-going focus on margins and further incremental contributions from last year's acquisitions," said Goodbody's.