Good Afternoon ,
The world is full of ups and downs and swings and roundabouts but one thing is sure , that there is a remarkable resilience to markets. Yet another day of weaker than anticipate economic data but the market seems to have little appetite to go down , it seems to have tried this a few times…
The DCC disposal of the mobility business is immaterial to earnings but realises eur30m of net cash and must incrementally improve their ROCE of the Healthcare businesses. It is not usual for DCC to make a disposal so maybe this is a sign that should be paid attention to. The DCC management team are good at re-structuring and integrating businesses but they rarely make disposals. Maybe this signals scope for further significant change in the shape of the business as the current rapid growth of the Energy distribution business makes reduces the importance of the remaining divisions .
Officially from the DCC perspective however and following its strategic review in late 2008/early 2009, the company stated it would focus on businesses in which it already had, or else had the potential to achieve, a leadership position and which could generate attractive and sustainable returns on capital, through either organic growth and/or acquisitions. Our adjusted earnings forecast for FY11 is €1.94 versus consensus of €1.89. For FY12, we expect adjusted EPS of €2.04, again ahead of consensus at €1.98.
The EU stress test results for the Spanish banks is receiving a lot of attention with all official communication directed at expressing no concerns about the outcome for Spain…
The Cyclicals are back in Vogue and the airlines after the volcanic period in the doldrums are showing signs of a revival with Ryanair in particular creeping better everyday.
I have to admit I kind of fancy C&C here though I know that with an imminent UK budget that tax concerns will be a fear for the next week but the valuation looks ok and the market seems to not be pushing either the weather or the World Cup as reasons for participating in the seasonal fad that is C&C ….the absence of hype alone makes this one noteworthy…
Five pieces of glass and eight stitches was the score from my trip to St.Vincents hospital yesterday. I think I will remember that particular bike ride for a long while ….
Have a good evening….
Liam
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Liam Boggan
Merrion Stockbrokers
Tel.: 353-1-2404171
Mob:353-87-2313505
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