Wednesday, August 28 12:51:05
The ISEQ suffered a second day of steep declines this morning with the fall led by Ryanair and Paddy Power.
By 12:30, the index was down 44.22 points to 4,093.87.
Ryanair stocks plunged 11c to E6.41 after Britain's competition watchdog ordered Ryanair to sell most of its stake in Irish rival Aer Lingus, a potentially fatal blow to Chief Executive Michael O'Leary's dream of buying the former flag carrier. O'Leary immediately vowed to appeal against the "bizarre and manifestly wrong" order to cut Ryanair's stake to 5 percent from 30 percent, opening the prospect of a legal process that analysts say could last years. Echoing a ruling by the European Commission in February to block Ryanair's third bid to take over Aer Lingus, Britain's Competition Commission said Ryanair's stake could lead to "a substantial lessening of competition" on some routes. In addition to cutting the stake, the UK body ordered Ryanair not to seek additional shares or board representation.
Paddy Power shares fell 91c to E59.16 after it reported a pre-tax profit of E77 million for the first six months of the year, up 22pc on the same period of 2012. Diluted earnings per share are up 13pc to 137c. Revenue is up over 20pc in constant currency with growth in every division, especially in the area of online and mobile. Net revenue there was up over 100pc to E104 million. Meanwhile the company's Australian operations are performing particularly well, with its operating profits up 25pc to E16.5 million. "The first-half numbers reported from Paddy Power today are broadly in line with our expectations, with the exception perhaps of a bigger-than-expected loss in the Italian start-up business. The issue though for the market today will not be the H1 numbers so much as the guidance provided by the company for the second half. Management is guiding to 11-15pc growth in EBIT on a constant currency basis. On a reported basis, that implies 7-11pc growth. Unfavourable sports results in the second half to date are the main cause of lowered guidance," said Davy Stockbrokers.
Grafton shares fell 5c to E10.06 after it said that the group's H1 revenues rose 1pc year-on-year (yoy) to E1.07bn despite a foreign exchange headwind that knocked circa 2.5pc off turnover. H1 underlying trading profits rose 17pc to E36.6m, which was 4pc better than our E35.2m forecast. Actual operating profit increased 179pc to E68.4m due to a non-recurring pension scheme credit.