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Jean-Claude Juncker, Eurogroup president, and Olli Rehn, European commissioner, at a press briefing, Brussels, Nov 07, 2011. Rehn appears to be invoking an external power. China maybe?
CRH, which accounts for 23% of the
market capitalisation of the Irish
Stock Exchange, is to move its primary listing to London.
Elan the drugs firm, said last month that it will move its primary listing to New York. Overseas residents hold at least 90% of the shares in both companies.
CRH said that in recent years, as the international operations and profile of
CRH plc have grown, the proportion of the group's shares held by overseas
investors has increased significantly. In addition the majority of trading in CRH’s Ordinary shares now takes place on the London Stock Exchange (LSE) with
trading of CRH on other London based platforms also increasing.
CRH said following preliminary discussions, the FTSE has indicated that as a
result of this change CRH should be eligible for the FTSE UK Index Series
provided it maintains the Premium Listing of its Ordinary shares on the LSE,
trades those shares in Sterling (GBP) pence and continues to have adequate
trading liquidity on the LSE. The Group believes that FTSE UK index inclusion
would result in a further increase in UK and international investor awareness of
From tomorrow morning, 9 November 2011, CRH Ordinary shares listed in London
will trade in Sterling (GBP) pence rather than in euro. CRH Ordinary shares will
continue to trade in euro in Dublin. There will be no break in the trading of
CRH Ordinary shares in either Dublin or London. CRH said there will be no impact on the
amount or the timing of any dividend payments as a result of the
Reclassification. The reporting currency of CRH will continue to be euro and
dividends will continue to be declared in euro; existing procedures regarding
currency elections will remain in force.
The FTSE Nationality Committee, which considers the qualification of shares for
index eligibility, meets today. The FTSE European/Middle East/Africa Regional
Committee, which considers shares for index inclusion, meets on 7 December 2011.
Subject to the independent deliberations of the FTSE committees, CRH could be
included in the FTSE All-Share and FTSE 100 indices from the start of business
on 19 December 2011.
Commenting on these developments, Myles Lee, CRH chief executive, said: “We
believe that these listing arrangements are in the best long-term interests of
CRH and will increase the Group’s attractiveness to a wider international
investor base. The changes announced today represent a logical progression for
CRH given the international nature of its business and the fact that the
majority of trading in the Group’s shares is on the LSE. These changes will have
no impact on the operations of the Group. CRH remains headquartered,
incorporated and tax-resident in Ireland.”
There is no denying the fact that it diminishes the already tiny Irish Stock Exchange.
Robert Eason of Goodbody, says
"CRH has released an IMS a week ahead of schedule, in which it has guided that
FY EBITDA will be approximately €1.6bn (broadly flat yoy). This compares to our
forecast of over €1.7bn and implies a circa 5% decline in the second half
(forecast of +4%) versus a 10% increase in the first half. At a PBT level,
guidance is for an increase of €20-50m on last year’s level of €658m versus our
forecast of €747m (5-9% behind).
Sales growth has remained relatively robust at 4% in the third quarter (versus
our H2 forecast of 3%), which compares to 2% in Q2 and 10% in Q1, so the miss is
down to higher than expected margin pressures. At a divisional level, both
European Materials and US distribution are in line, with the other four behind.
EBITDA for European Products and Distribution are expected to grow by 10% and
20% versus our expectations of +16% and +30%, while US Materials and US Products
EBITDA is expected to be -10% and +10%, respectively (versus our expectations of
flat and +24%).
Overall, the results are disappointing, especially in the context of a strong
first half. However, an implied 5% decline in second half EBITDA still makes it
stand out from the crowd but not as much as the H1 results did."
DCC reported today that operating
profit for the six months to the end of September was hit by the very mild
weather in April and May, which hit the performance of its largest divison, DCC
Operating profits for the six month period fell
by 14.2% to €58.3m, while pre-tax profits dipped 17.3% to €50m. Revenues rose by
10.8% to €4.395bn.
David O'Brien of Goodbody comments: "DCC has reported H112 (to September end) results this
morning. Operating profits decreased by 14% yoy to €58.3m (-11% on a constant
currency basis), below our forecasts of €64.7m. Adjusted earnings of 47c compare
to our forecast for 52c.
The Energy Division reported operating profit of €19m, down from €30m in the
same period last year and compared to our forecast of €26m. This is a reflection
of milder than normal weather in the UK & Ireland during the period. Guidance
remains for a decline in operating profits for FY12, as management assumes a
normalised winter trading period. SerCom continues to perform robustly.
Operating profits have increased by 6% yoy to €15.2m, broadly in-line with our
forecasts. Encouragingly, the distribution business (90% of divisional profits)
continued to enjoy “good organic growth”, despite the challenging economic
Management expects strong operating
profit growth for the full year, reflecting both acquisitive and organic growth.
On an aggregated basis, the remaining businesses generated operating profits of
€24.4m (+4% yoy), ahead of our estimate of €23.2m. Healthcare was broadly
in-line with forecasts, while Food & Beverage and Environmental came in ahead of
expectations. However, Food & Beverage will be affected by the loss of a
contract in the logistics business in the full year.Management has guided for a
7.5% decline in full year operating profits and eps on a reported basis,
compared to expectations for a mid-single digit decline, previously. On first
glance and ahead of meeting management, we envisage pulling back our FY12
operating profit forecast by 2% to €214m (-7% yoy). While a downgrade is never
ideal, we recognise that the weakness is driven predominantly by one-off’s
(weather affects and loss of a contract in Food) and as such, does not damage
the investment thesis. Therefore, we maintain our BUY recommendation."
UK taxman’s new project team turns base metals into gold
- - Hard on the heels of last week’s HMRC (Revenue &
announcement of a new 200-strong ‘affluent team’ of specialist tax
inspectors is a promise of a new sector specific taskforces aimed at scrap
metal dealers, the construction industry and landlords.
Starting in Scotland, Inspectors will seek to
tackle tax evasion by checking in intensive bursts of compliance activity
whether such traders are deliberately hiding income or boosting expenditure.
The checks on landlords will start in the North West and North Wales, while
the construction industry across the UK will be scrutinised.
Mike Down, Tax Investigations Partner at accountants Baker Tilly said:
“This teamwork approach is becoming
increasingly widespread and HMRC now seems to be in full flow in coming up
with new team-based initiatives.”
As well as the ‘Managing Deliberate
Defaulters’ programme, under which expert groups robustly scrutinise and
follow up on the returns and records of previous tax evaders, new teams this
year include other taskforces looking at restaurants and fast food outlets
and the Offshore Co-ordination Unit, which has started a project to
investigate 6,000 UK holders of Swiss bank accounts.
Mindful of the need to deploy its expert
investigation resource cost-effectively, HMRC hopes those with tax issues
will come forward voluntarily. Down continues:
“HMRC wants people to ‘walk-in with their
tax disclosures. They will be more lenient on those who own up. However tax
defaulters caught out by the new teams can expect to suffer the full force
of HMRC’s new powers and penalties regime, including the threat of being
publicly “named and shamed.”
Italy's debt fears take centre stage:
Economic View 1: Yields increase for
the EFSF; Juliet Tennent, accountant at Goodbody,
comments -- "Yesterday, the EFSF revived the
€3bn bond issue that it postponed last week amidst the uncertainty caused by
the Greek political debacle. The bonds, with a 2022 maturity, priced at
almost 90bps more than the last bond of a similar maturity that was issued
back in June.
EU Finance ministers are currently holding
meetings to thrash out the manner in which the EFSF will be leveraged and the
uncertainty surrounding the future shape of the facility is no doubt weighing on
the minds of investors. In addition, the threat to the AAA rating of France, on
which the EFSF’s rating also depends, has seen yields rise recently for both.
The funds raised by the EFSF yesterday were on behalf of Ireland and the
additional yield that the EFSF paid will be passed on to the sovereign. It is
therefore in Ireland’s interests that the current uncertainty surrounding the
shape of the EFSF is resolved as soon as possible."
Economic View 2: Consumer weakness
persists in the UK; Juliet Tennent added - - "Data from the UK this morning continued to paint a negative
picture of the consumer, with the BRC showing that following a flattish outcome
for the three months to September, the value of like-for-like sales fell by 0.6%
in October, weaker than the -0.2% expected. In addition, as inflation is running
at 5.2% yoy this shows that sales volumes continue to contract.
The RICS House Price Balance remained firmly in negative territory in October at
-24%, slightly behind expectations of -23%, with prices rising in London and
falling everywhere else. While both the New Instructions (3%) and the New Buyer
Enquiries (7%) components improved modestly in the month they remain low
suggesting that the lack of activity in the UK housing market, as seen in the
low volumes of mortgage approvals since the beginning of the year, is set to
As consumers in the UK face continued tight credit conditions, uncertainty in
the face of austerity plans, real incomes being eroded by inflation and a
deterioration in the labour market, it is likely that housing market indicators
and retail sales in the UK will remain under pressure for the foreseeable
Irish Financials: 67 % of Lloyds Irish
loan book now impaired; Colm Foley of Goodbody
comments -- "Lloyds has released a Q3 IMS this
morning reporting a profit before tax of £1,748m for the first 9 months of the
year, compared to £2,488m for the same period last year. However we are more
interested in the commentary on the Irish business.
The level of impaired loans for Ireland increased by a further £2.9bn, resulting
in 67% of the total Irish loan portfolio now being classified as impaired.
Provisions as a percentage of impaired loans were 58.1% at the end of September,
up from 53.7% for the same period in FY10. The increased impairment charges have
been attributed to the continued falls in the commercial real estate market.
The figures from Lloyds show the continued deterioration of credit quality in
the economy. BOI will provide a further update on November 18 on the state of
In New York Monday, the Dow added 85 points or 0.71% to 12,068.
The S&P 500 gained 0.63% and the Nasdaq rose 0.34%.
MSCI Asia Pacific dipped 0.8% Tuesday.
Japan's Nikkei 225 fell 1.27%; China's Shanghai Composite slid 0.24%;
Australia's S&P/ASX 200 added 0.48% and the Bombay Stock Exchange Sensex 30
index in Mumbai fell 0.26%. South Korea's Kospi dipped 0.93%.