Good Afternoon
The snow has melted , the schools are to re-open and the year looks like it is about to finally takeoff in earnest...
The Irish equity market closed up almost 1% today despite giving away some of the gains in the afternoon. There was initial strength in the financials though that eased off and AIB and Bank of Ireland closed down between -1% and -2% with Irish Life manageing a small gain of just under 1%. There was some inportant news for Irish Life today and it was that the High court had sanctioned the the scheme of arrangement (the Scheme) pursuant to which Irish Life & Permanent Group Holdings p.l.c (NEW ILP) will become the new holding company of the Irish Life & Permanent group. The Scheme will become effective after close of business on Friday 15 January 2010.
It is expected that cancellation of the listing of the OLD ILP Shares on the Irish Official List and the UK Official List
will occur with effect from 6.30 a.m. and 8.00 a.m. respectively on Monday 18th January 2010, and that the issued ordinary shares of NEW ILP (the New ILP Shares) will be admitted to the Irish Official List and to trading on the main market for listed securities of the ISE by 6.30 a.m. on 18 January 2010 and to the UK Official List and to trading on the main market for listed securities of the LSE by 8.00 a.m. on 18 January 2010.
C&C closed up 3% on the back of John Dunsmore having an interview pubished in the Daily Telegraph. The interview was all flattery and the motives behind his decision to boost his profile is anyones guess. It looked like more of a publicity stunt and settin himself up for the next gig than anything else. Yes this manaement team have generated a lot of value and been really busy with the deals but it remains to be seen how successful they will be in the longer term. I wish them well. Success stories are to be cherished.
Fyffes popped out a trading update this morning...Fyffes issued an IMS this morning. For 2009, the company expects adjusted EBIT to be in the range of €20m-€21m. This compares to our adjusted EBIT forecast of €20.5m, which we will be leaving unchanged, and the company's prior guidance of €18m-€22m. The company stated that poor weather in December impacted performance at the end of the year. Without this weather impact, it appears that the operating profit result could have achieved, if not beaten, the top end of the guidance range. The 2010 company guidance does not include any benefit from the reduction in import duty. We do not include any benefit either at this stage until the timing of ratification is clearer. Fyffes continues to state that it expects to retain 20-25% of the benefit but the market supply/demand balance of fruit at the time the duty cut is ratified by the EU Council and Parliament will be an important factor. On cash, the company indicated that the balance at year-end will be approximately €37m, The stock is cheap, trading at 6.2x 2010 earnings, excluding the cash balance but we are going to stick with the Hold recommendation due to the forecast low rate of earnings growth for the forthcomng year of +2.6%.
And finally ICON peer Parexel ups guidance for the full year and expects respectable 1.25x book-to-bill. Parexel issued a financial update this afternoon due predominantly to the fact that restructuring charges that it expected to report in its Q2 (to end December, i.e. ICON's Q4) will now in part be pushed out into later quarters. It took the opportunity to update the market on its expectations for Q2 trading (due to be reported after the market closes on 25 January 2010). Q2 adjusted EPS guidance has been raised for the quarter from 19-21c to 21-23c, with revenue now expected to be $280-285m from previous guidance of $275-280m. For the full year revenue guidance was raised to $1.115-1.145bn from $1.105-1.125bn, and adjusted EPS to $0.90-1.00 from $0.87-0.97. The revisions were driven by second quarter new business wins and foreign currency movements. The improved new business performance and upgrades to outlook (modest as they are - the full year upgrades may represent one or two large trial wins) however are encouraging and are suggestive that the difficult Q3 may have marked the nadir for the CRO sector. We have a BUY recommendation on ICON.
Have a good evening
Liam
___________________________________________
Liam Boggan
Merrion Stockbrokers
Tel.: 353-1-2404171
Mob:353-87-2313505
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