Philip O'Sullivan's Market Musings

Financial analysis from Dublin, Ireland

Market Musings 28/4/2012

with 2 comments

(Disclaimer: I am a shareholder in Irish Continental Group plc) Since my last blog post I was interested to read the FY2011 results statement from grey market ‘listed’ Irish investment group One51. The management team, led by CEO Alan Walsh, has done a good job at starting to reposition the group, but it remains somewhat hamstrung by its high net debt (€146.4m at end-2011, or 4.0x last year’s EBITDA). In recent months it has disposed of interests in Premier Proteins and IFG, while it is in the process of selling its Speciality Plastics Business.  Management add that “Other assets will be sold as part of the two year Action Plan” and “it is anticipated that net debt levels will be substantially reduced over the course of 2012”. While ‘substantially’ is such a subjective term, I am guessing that the company is giving serious consideration to a sale of its 12.3% stake in Irish Continental Group (current market value €46.8m) as part of this process. Elsewhere within the statement, I was very interested to read of the recent appointment of a number of heavyweight directors along with a reaffirmation of One51’s “commitment to meeting the main requirements of the UK Corporate Governance Code and the Irish Corporate Governance Annex during the course of 2011 and beyond”, which to me reads like it’s also considering moving to a full stock market listing in time.


Overall, I would welcome a placing of One51’s ICG holding given that (i) it will improve liquidity in it; and (ii) from a selfish perspective (!) it would likely provide an opportunity to add to my position at an attractive level.


(Disclaimer: I am a shareholder in Ryanair plc and CRH plc) Goodbody Stockbrokers issued its latest investment strategy note. In it the broker says Ryanair, Dragon Oil, Aryzta, Paddy Power, William Hill, Kingspan and FBD are its preferred Q2 longs, while it still favours shorting CRH.


From a macro perspective, I was interested to see this blog post on the FT website about how stockpiles of copper and aluminium are overflowing into carparks in China. The words “hard” and “landing” come to mind.


Elsewhere, the head of NAMA made some interesting comments yesterday about its overseas portfolio. So far the agency has advanced €280m on working capital for overseas developments. In NAMA’s Q3 2011 report it disclosed that “working and development capital of €873 million has been approved by NAMA to end September 2011 of which €477m has been drawn”. Considering that two-thirds of NAMA’s initial loan ‘assets’ were located in Ireland at the time of its establishment, it does seem that overseas developments are getting disproportionate attention from the agency, but given the grim state of the domestic economy can anyone here really be surprised?



Written by Philip O'Sullivan

April 28, 2012 at 9:54 am

2 Responses

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  1. […] ability to execute on such a significant step-up in this type of activity in the Irish market (last month it said that only €477m of ‘working and development capital’ approved by NAMA had been drawn […]

  2. […] It also removes an overhang on the share register, for as regular readers of this blog are aware, I had been expecting One51 to exit this holding for some time. In terms of my reaction to this development, I am closely monitoring the ICG share price with a […]

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