Philip O'Sullivan's Market Musings

Financial analysis from Dublin, Ireland

Market Musings 12/12/11

with 3 comments

With Christmas fast approaching, there isn’t a huge amount of corporate news to keep on top of. I’ve 2 assignments and an exam to complete between now and December 19, and I’ll be releasing my tips for 2012 after that. In this short blog I round up all of the major newsflow that I’ve seen in the past 72 hours.

 

(Disclaimer: I am a shareholder in PetroNeft plc) Interactive Investor ran an interesting interview with PetroNeft CEO Dennis Francis. In it he ruled out a rights issue (which is positive news given how beaten up the share price is), and talked about how his priority is to grow output levels. While he touched on the issue of acquisitions, I got the distinct impression that he would prefer to maximise output from Licence 61 and Licence 67 (its current areas of operations) rather than buy other development assets. This is clearly a lower-risk (and more shareholder-friendly in the short-to-medium term) strategy. So, some positive noises there.

 

According to a report in the weekend press, Greencore is facing a hit of up to €4m due to an associate going into receivership. While this is clearly a setback, it is relatively minor (and one-off) so I don’t think it does anything to change my investment view on it. If you want a even more downbeat investment view on Greencore, read this two-parter from Wexboy (Part I and Part II).

 

(Disclaimer: I am an indirect shareholder in DCC plc) Staying with the food sector, DCC, Valeo (which is an associate of Origin Enterprises plc) and Boyne Valley are all said to be interested in buying Premier Foods’ €30-40m rated Irish business. Premier’s Irish brands comprise Erin, Chivers, Gateaux and McDonnells, while the Irish operation also sells some of Premier’s UK brands along with some agency brands. While I don’t know anything about Boyne Valley, at first glance it looks like Premier Foods’ Irish business would be a great fit for either DCC or Valeo.

 

(Disclaimer: I am a shareholder in Datalex plc) Australia’s Flight Centre has announced that it has settled its long-running legal dispute with Datalex. While no details of the settlement were disclosed, save for the matter having been resolved to their ‘mutual satisfaction’, it removes an overhang that has dogged Datalex since Flight Centre announced that it was suing it for $15m back in 2009.

 

Some fantastic news from the United States – according to Iowa Electronic Markets (real money futures) data, Ron Paul is now the favourite to win the Iowa Caucus in the New Year. This will put his message of sound money and fiscal responsibility – a gospel that needs to be preached throughout the West – firmly in the spotlight. To illustrate the mess the US is presently in, I was interested to read that only twice as many Americans hold passports than the number that are on food stamps.

 

Finally, NAMA expects to make operating profits (pre-bad debt charges) of €600m this year. Recent positive noises on the prospect for disposals in the UK and also tax changes here (stamp duty on commercial property cut from 6% to 2%, no CGT on purchases to end-2013 if held for 7 years) have improved the outlook for this entity, and will hopefully see it offload its portfolio sooner rather than later.

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Written by Philip O'Sullivan

December 12, 2011 at 4:33 pm

3 Responses

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  1. […] I am a shareholder in Datalex plc) Following the recent positive news of a resolution of its litigation with Flight Centre, Datalex was upgraded to […]

  2. […] on from my recent blog, I was interested to hear that Boyne Valley has prevailed in the battle to buy Premier Foods’ […]

  3. Yeah, I read the American passport article. Sad. I’d completely forgotten about the change in re-admission rules for citizens..! 100% the reason for the increase, I guarantee you…

    In Vegas some years back (yes, the shame, but I was at a conference – btw stay at the Wynn…the one hotel where you almost forget you’re in Vegas!) and headed to the Venetian for a function – this is no joke, I observed at least 3 couples wandering by who were loudly expressing their amazement at the ‘decor’…and announcing that now they didn’t need to ever visit Italy…! Jesus!

    Wexboy

    December 17, 2011 at 4:40 am


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