Stockbrokers push up Heiton’s EPS forecast
Merrion analyst John Mattimoe said that following the statement “we are upgrading our normalised EPS forecast for the full year by 4% to 51.5c from 49.5c.
“The continued buoyancy in domestic housebuilding activity has favourably impacted H2 trading, while the benefits of the prior year cost restructuring has allowed the company to fully benefit from the good environment at the bottom line. Good margin recovery has been realised in the UK operation in H2 reflecting the restructuring efforts there during the year,” he said.
NCB’s John Sheehan said they will be raising their forecast EPS before goodwill amortisation and exceptionals to circa 50.5c (from 49.4c) to April, 2004.
“With a continued positive outlook and no sign of slowing housing activity, we expect to upgrade our April 2005 forecast by 6% to 54.0 cent per share,” he said. Davy’s Florence O’Donoghue added 1c to his previous forecast for the year to end-April 2004 and revised Davy’s diluted adjusted EPS estimate of 50.5c implies very impressive EPS growth of 17% for the year.
Mr Mattimoe said cash generation at Heitons reflects the better profitability and they now expect that year-end net debt will be close to €51m compared to €56m previously expected.
“While a 6m disposal of a Cork property helped, this was nearly fully offset by a slight timing delay on the release of €5m cash from the wind down of part of the British operation. This will flow through early next year, further assisting debt paydown that year,” he said.
Mr Mattimoe said the shares should react well to positive short-term newsflow.
“However, in the medium term the group’s reliance on Ireland remains an issue for us as the likely moderation/slowdown in Irish house construction will be a management challenge. This underpins our hold recommendation,” recommendation. NCB and Goodbody have an “add” recommendation of the shares.
