Saturday 10 December 2016

Irish plcs with global footprints lead buoyant corporate sector

Published 09/06/2011 | 05:00

Recent months, even years, have seen very negative newsflow on Irish companies. Not surprising as this newsflow has focused almost entirely on the financial sector.

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It has meant a number of other listed Irish firms' strong performance has been overlooked.

When examining the ISEQ's most recent results, it is clear that most Irish companies had positive up-dates on both their recent performance and outlook for the coming months.

The balance sheets of these companies have also seen dramatic improvement. The exposure of many of these companies to the Irish economy is also surprisingly low.

Kingspan for example, only generates 5pc of its revenues from Ireland while CRH only generates 3pc.

Of these Irish companies, the food companies have performed particularly well with both Glanbia and Kerry putting in a stellar performance year to date, up 40pc and 20pc respectively.

The recent rally in agricultural prices has seen milk prices rise significantly helping Glanbia, but also its strategy of moving into higher margin nutritional businesses in recent years has started to pay off.

For Kerry Group, the increase in food prices and other raw material prices has meant food companies reformulate their products through changing flavouring and ingredients with the group's market leading position in both of these areas the main driver of recent share price gains.

Therefore, the performance of the Irish banks should not overshadow the Irish equity markets as a whole.

Ireland has a significant number of well run domestically owned firms such as Grafton, Paddy Power, Fyffes and FBD along with those highlighted above.

These firms are profitable, have strong balance sheets while the vast majority have little direct domestic Irish exposure and a well diversified international exposure.

The fact that Ireland Inc. can both create and grow globally successful companies should not be forgotten either domestically or internationally in spite of the significant losses in the financial sector.

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