First Active profits to rise

PROSPECTIVE takeover target First Active is expected to announce an increase in pre-tax profits of close to 9.4% for the first half of the year.

The former building society will announce its interim results on July 22.

Davy Stockbrokers are forecasting pre-tax profits of 33.3m and diluted earnings per share of 18.9c which represent growth of 9.4% and 4.8% respectively on the first half of 2001.

Davy analyst Scott Rankin believes net interest income should show strong growth of 19% year-on-year, boosted by strong mortgage volumes and the income released from the sale of its stake in Britannic Money.

“Other income should be up 10% year-on-year while costs should be up 5% year-on-year,” he said.

Second half profits will be impacted by the loss of investment income from the 160m surplus which has been distributed to shareholders.

First Active shareholders, who have already benefited from the 160m distribution of surplus cash to shareholders, will be hoping someone makes a play for the company when it emerges from post-mutalisation takeover protection later this year.

Irish Life and Permanent are the only prospective bidders with an existing declarable shareholding, standing at just 3.1%, but this holding is far too small to deter a bid for the company.

First Active shares are trading well off their 2003 high on January 31 of 5.80 but have been creeping up in recent days to 4.70 plus. The shares have a takeover premium factored into the share price.