One51 could ‘double value of its shares’

INVESTMENT group One51 has the capacity to more than double its share value and could either float or sell its environmental services division in the next couple of years, according to one stockbroking firm.

Shares in the Philip Lynch-led business are currently trading at a price of €1.90 on the so-called grey market.

The business has significant shareholdings in a variety of Irish companies, including shipping business Irish Continental Group (ICG), financial services provider IFG and renewable energy specialist NTR.

A detailed update report on the group, published by Bloxham Stockbrokers, suggests that the business’s share price could actually increase to between €3.13 and €4.23.

This depends on the realisation of investments and non-core assets over the medium term and the continued development of ClearCircle, the group’s re-branded environmental services division.

Bloxham’s Paraic Quinn said: “We value One51 on a sum-of-the-parts basis given the four distinct divisions [environmental, infrastructure, food/distribution, renewable energy] and varying degree of control that exists for different businesses.

On this basis, we arrive at a valuation range of between €3.13 and €4.23 per share, which represents considerable upside from the current €1.90 level.”

The valuation doesn’t technically mark an upgrade from Bloxham, as the broker didn’t have a previous forecast on the company.

Bloxham’s report also highlights the favourable position of One51’s current banking facilities and its near €57m in cash reserves.

“While debt pay-down is a priority for the group in 2010, its financial position allows it to continue to take advantage of potential opportunities which may arise,” added Mr Quinn.

One51 — which has already added, via acquisition, to its environmental services division this year — recently reported EBITDA of €26m for the first half of 2010, up by 14% on a year-on-year basis.

Nevertheless, the group came under recent pressure from a group of disgruntled independent shareholders to re-focus into a dedicated cleantech business and dispose of non-core investments, such as its stakes in ICG and IFG.

The group failed, however, to gain representation (which would have included former Beamish & Crawford head, Alf Smiddy) on the company’s board at its recent annual general meeting.

“The overriding rationale of introducing ClearCircle as a single recognisable brand forms part of the group’s plans for an IPO or trade sale of its environmental services operations in the next 18-24 months,” Bloxham said in its report.