Philip O'Sullivan's Market Musings

Financial analysis from Dublin, Ireland

Market Musings 30/8/11

with 2 comments

As predicted, a busy day on the markets today, with a slew of results in Dublin, while I was pleased to see a decent upward move in the FTSE and (to a lesser extent) our own ISEQ index today.


Overall, in terms of the company results, there were no major surprises relative to my preview from last night.


(Disclaimer: I’m a shareholder in Datalex plc) Datalex issued a solid set of H1 results today. I was pleased to see a number of new contract wins in the first half of 2011, continuing the solid progress made on this front in 2010. As I’ve said before, this is a very inexpensive stock, with the only health warning (at this time) being that microcaps will find it hard to catch investors’ attention with so many other cheap plcs out there.


UTV also issued H1 numbers today. It’s not a stock that I have on my radar screen, mainly because I’ve already got a decent exposure to the media sector through Trinity Mirror and Independent News & Media. Investors in UTV will, however, no doubt be encouraged by the 18% decline in net debt over the past year to £63.1m, and also the firm’s decision to up the H1 dividend by 50%.  Going into these results I said that I would be most interested to hear any indications on advertising revenue trends. On this front, management said that revenue at its GB radio stations was flat (a very impressive performance), TV advertising was +4% (outperforming ITV, also an impressive performance) and Irish radio advertising was -4%.


(Disclaimer: I’m a shareholder in Irish Continental Group plc). ICG reported robust H1 numbers, given the difficult economic backdrop and stubbornly high oil prices. I was pleased to see the return of the interim dividend (for some time now the company has had the practice of paying a single “jumbo” dividend at the year end), so “Christmas has come early” in the shape of some of my dividend income from this stock coming in sooner than I expected! The company’s Chairman, John McGuckian, sums up my outlook on ICG by saying: “The economic outlook remains challenging with austerity programmes affecting both consumer demand for travel and freight markets but we are structured to compete and to continue to generate cash notwithstanding this backdrop“. Also today ICG’s main rival Stena confirmed that it is cutting back some of its Ireland-UK fast ferry services,  which merely serves to continue a narrative of industry players’ cutting back on capacity on the Irish Sea, which is clearly bullish for yields.


Paddy Power issued characteristically strong results today. Whenever I see a set of numbers from them I despair at myself for not having invested already in this outstanding company! Unsurprisingly, the solid H111 performance was led by online, Australia and the UK, as I indicated yesterday.


Readymix also released H1 results today. In an ominous sign for Ireland’s construction industry, it revealed that “Trading conditions have deteriorated even further during 2011. The demand for Group products continues to decline with revenues from operations down 24% versus the same period last year“. In terms of the outlook, the company says: “As a result of the weakness in the housing and commercial sectors and the uncertain timing of any new infrastructure projects, Readymix plc expects the very demanding trading conditions to continue for the remainder of 2011 and into 2012“.


So, a busy day for Ireland Inc. Tomorrow will be no different, with H1 numbers due from Grafton (watch for recent sales trends in the UK and Ireland), IFG (an update on takeover talks will be the main focus), Aer Lingus (the outlook and pension will be of interest) and Irish Life & Permanent (any news on the disposal of the insurance unit would be of interest, along with trends in mortgage arrears). No doubt I’ll have plenty to write about those and anything else that catches my attention tomorrow.


Oh, and finally, tomorrow is the last day of August, so don’t be surprised to see some unusual “month end” activity on the markets.


Written by Philip O'Sullivan

August 30, 2011 at 8:30 pm

2 Responses

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  1. […] yesterday, showed that TV and Irish radio weakness is being cancelled out by UK radio strength. I like what UTV has been doing of late, but what turns me off the story is the way the value of its core radio and TV franchises are being […]

  2. […] it I expect that shareholders will be left more or less empty-handed. Like Siteserv, Readymix has been through the wars in recent years due to the difficult macro backdrop here, but its shareholders must be pleasantly […]

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