Liams Last Post : Quiet , Dubai relief and DCC deal the highlights

Good Afternoon ,

 

I was away for a couple of Days in Frankfurt. Always good to get out of Dublin these days and to find a world where there is a more optimistic view of the world in 2010 , a world where  everyone is not under the cosh of NAMA and a government that is faced with taking very tough decisions just to keep the show on the road.  THe perception from the Germans I spoke to towards Ireland was favourable and there was indeed a recognition as reflected nthe coverage of the likes of the FT that the Irish government has taken significant steps to address the economiy and the position we find ourselves in... 

 

Kingspan fell -3.3% despite the Friday bolt-on deal. The Deal highlights how Kingspans rapid reduction in net debt balances combined with a stabilisation in its sales run-rate allows management to restart considering acquisition opportunities we estimate that Kingspan has the capacity to invest 200m in acquisitions over the next two years.

 

The DCC deal was decent size and is earnings accretive by just over 1% this year and mearly 4% next year. I have to say that DCC under this management team seem just determined to deliver deal after deal in their chosen space. The de-emphasis of the Food and Healthcare businesses is evident to all and sundry now so one has to think that at some stage that these are likely to be disposed of. this acquisition of Brogans Holdings Ltd, a 447m litre oil distribution and fuel card business in Scotland and the north of England for cash consideration of 47.2m. Brogans operates 87 road tankers out of 15 locations and generated operating profits of 7.9m in the year to May 2009 (operating margin of 2.4%). The acquisition adds c.10% to DCC's existing volumes of c.4.5bn litres and increases its market share in the UK oil distribution market from 13% to 14%. The pre-synergy multiple of just under 6x historic operating profit looks attractive

 

The CEO of ICG last week sold 7.1% of his 16% stake in the company, which appears to have been purchased by Rokeby Investments Ltd, an investment company controlled by him , This news caused a stir on friday when it broke...but it sems like just moving stock around for tax purposes...

 

Overall Volumes thin now , THis year definitely over as far as the markets are concerned.  The Dubai bail out by Abu Dhabi was a surprise which took the pressure off markets to everyones relief.

 

Most markets range bound though and closed the day net up between 0.5% and 1% across he major markets.  Ireland was broadly flat on the day. The banks down , CRH up but Kingspan and Grafton still struggling .

 

  

Have a good evening

 

Liam

 

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