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[Article] ICG back on acquisition trail

  • 14-09-2004 12:36am
    #1
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭


    O_o the pan-nationalist shipping company ;)

    http://www.sbpost.ie/web/DocumentView/did-124241409-pageUrl--2FThe-Newspaper-2FSundays-Paper-2FThe-Market.asp
    ICG back on acquisition trail
    12/09/04 00:00
    By Ed Micheau

    Irish Continental Group (ICG) may soon be back on the acquisition trail, the ferry group's managing director Eamon Rothwell has confirmed.

    The Irish company is looking closely at events at Peninsular & Oriental Steam Navigation (P&O) which is due to release the results of a strategic review of its unprofitable ferries business on September 28.

    ``We may be interested in what comes out of the restructuring at P&O. It depends on what comes on offer,'' said Rothwell.

    A strategic re-think at P&O, Britain's largest shipping company, is likely to see it focus more on its ports and container shipping divisions. P&O is expected to begin disposals at its loss-making ferry business to enable it focus on its ports operations, which account for two-thirds of profits.

    ICG could be interested in acquiring P&O's business from the North to Scotland, where the British company operates two routes - Larne to Troon and Larne to Cairnryan. Other units that might come on the block include P&O's cross-channel routes from Dover and Portsmouth, along with services to a number of destinations in France.

    ``ICG has a very good working knowledge of the Irish Sea so it would naturally be interested in anything that came available close to home,'' said an analyst.

    Raising finance to fund an asset-backed deal should be no problem for ICG. Net debt at the company is expected to be no more than €110 million by the end of the year, implying a debt to earnings before interest tax depreciation and amortization (ebitda) ratio of just two times.

    Three-quarters of ICG's debt is fixed. ICG is a strongly cash generative business, with one of the highest cash flow yields - 15 per cent - on the Irish stock market.

    In 2003, the company produced free cash flow of €42.2 million. Analysts believe ICG could spend at least €200 million on acquisitions.

    Rothwell also did not rule out the possibility of ICG recommencing a share buyback programme, saying that buybacks were conducted in the past on an ``opportunistic'' basis.

    ICG has not bought its own shares since March, when it acquired 2.26 per cent of the outstanding shares at e11.75 per share. ICG closed last Friday at €10.10 per share.


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