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ISEQ helped by strong full year results

Thursday, March 07 17:33:31

The ISEQ managed to stay out of the red thanks to a busy day for full year results with Grafton, Fyffes and ICG all reporting.

The index was up 2.25 points to 3,828.28.

Shares in Grafton Group was flat at E4.83. Results for 2012 formally confirm that the Grafton recovery gained momentum. Underlying earnings rose to their highest level since 2008 and were 27pc higher than the 2011 result. As end-markets remained extremely challenging, the improvement is a clear reflection of the positive effects of self-help measures, Davy analysts said. "Grafton's balance sheet is also in good shape. Net debt has fallen by circa E350m in the past five years (with no recourse to shareholders) and net debt/EBITDA has now fallen below 2x for the first time since 2007. Given the operational and financial progress, Grafton enters 2013 in excellent shape. While there is significant leverage to any pick-up in volumes, for now further progress will continue to depend on self-help measures. Our initial response to the statement is there will be little change to 2013 forecasts, although we will have to adjust for the recent move in the euro-sterling rate. With the stock trading on over 20x current year estimates, it is evident that investors are pricing in at least some additional recovery in Grafton's earnings. We remain confident that Grafton will deliver and can therefore grow into its multiple."

Fyffes' stocks gained 4c to E0.64. Revenue including JVs and associates grew by almost 20pc in the period to E1,018m. The increase in revenues was driven by strong organic growth in each of the product categories. Adjusted EBITA was E31.6m versus our forecast of E31.2m. Results for individual segments are not disclosed.

Shares in Irish Continental Group (ICG) jumped 59c to E20.99 as it posted EBITDA of E45.8m, down only 3.2pc despite higher fuel costs of E6.3m. The results include the effect of Feederlink, which was disposed of in December 2012 and which is treated now as a discontinued operation in both 2011 and 2012. FY results include EBITDA of E45.8m versus E47.3m last year - down 3.2pc. This excludes discontinued operations from Feederlink of E0.9m (Davy EBITDA forecasts: E49.3m). Operating profit at E26.5m was 2.2pc below last year, again excluding discontinued activities (Davy operating profit forecast: E28.5m). Year to date, cars are down 7pc - reflecting dry-docking rather than market weakness. Passenger volumes are up 2pc. RoRo is up 4pc while container volumes are up 9pc, although terminal lifts are down 2pc. At this stage there is likely to be a tailwind on fuel of c.E3m which should drive EBITDA close to E50m. We are unlikely to materially change our 2013 forecasts (EBITDA E49.3m, operating profit of E30.5m at this stage), Davy said.