Monday, August 19 17:39:04
The ISEQ rose back above the 4,200 level today as shares in Kingspan surged nearly 6pc thanks to a robust set of first half financial figures.
The index rose 29.81 points to 4,210.23.
Shares in Cavan-based Kingspan climbed 60c to E11.49 after it reported a very solid set of interim results. A feature of the H1 results, which were comfortably better than expected, was the strong initial contributions from the 2012 acquisitions. After a relatively challenging start to the year, there are also more encouraging signs in end-markets such as the UK and Ireland, while the group continues to make good progress in the US. "We expect to make little change to current year earnings forecasts. Kingspan is therefore on track to achieve earnings growth well above sector norms this year with much more to chase from 2014 and beyond," said Davy.
Paddy Power stocks rose 95c to E58.93. While the publication on August 16th by the UK government of its online gaming tax bill contained few surprises, it will re-focus investor minds on just how big an impact this new tax is likely to have on the earnings of the listed operators and what the resulting competitive landscape will look like once it is introduced, Davy said today. "Operators are making all the right noises about doing everything they can to mitigate as much of the tax charge as possible (through cost savings etc.) and there are certainly some automatic cost savings that kick in via lower rev share charges and the like. They are also pointing to the fact that the weaker operators will simply not survive the imposition of a proposed 15pc charge. That will likely result in some market share gains for the big guys over time. However, even assuming that one-third of the tax impact can be mitigated through cost savings and market share gains, this still implies zero-to-negative earnings growth for the collective of Betfair, Paddy Power, Ladbrokes and William Hill in 2015. For those investors focussed on earnings multiples as primary valuation tools, the message should be clear: 2015 multiples are key in assessing gaming sector valuations going forward."