Sunday 23 April 2017

Analysts sceptical about delisting success stories

Peter Flanagan

Peter Flanagan

MARKET analysts have poured cold water on suggestions that Irish-listed companies need to move abroad in order to grow, despite strong gains in the share prices of Greencore and CRH since they moved their main listing to London.

One month after delisting from the Irish Stock Exchange and moving to the London market, Greencore shareholders are basking in significant gains.

Since leaving Dublin on January 23, the ready-meals maker has seen its share price surge by nearly one-third to last Friday's close of 69.5 pence.

As well as the higher share price, Greencore has also experienced a spike in its trading volume since it left Dublin, apparently justifying chief executive Patrick Coveney's assertion that the move would open the company to a greater range of investors.

At Greencore's AGM earlier this month, Mr Coveney said he was "very happy" with the stock's performance so far in London.

Analysts are sceptical, however, as to how much of the rally has been due to the London listing, and how much has been due to other factors.

The FTSE 100 Index itself is up more than 10pc since December 19 when CRH moved its main listing, while the larger FTSE All Share index has also rallied during that period.

"There have been a number of factors related to the increase in volume and value at Greencore but two characteristics stand out," said one analyst.

Undervalued

"Greencore has rallied but so have most of the major exchanges in the period since Christmas, and Greencore has been undervalued for along time.

"It's far too easy, and too early, to say that Greencore and CRH's decision to move has been for the better."

Construction materials giant CRH has also enjoyed a surge since it moved its main listing to London in December, adding nearly 20pc to the value of its share price.

Those sort of returns are believed to be attracting a number of other Irish firms to London, with drinks company C&C "monitoring" its position in Dublin while DCC has also been mentioned as a possibility to move across the water.

Irish Independent

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