Irish Ferry group set for further growth

Ferries and freight business Irish Continental Group (ICG) is anticipating further strong revenue and earnings growth this year, largely thanks to lower oil prices, after reporting a strong showing for 2014.

Irish Ferry group set for further growth

The Irish Ferries owner yesterday reported group revenues of €290.1m for last year, up by 9.6% on the previous 12 months.

Earnings before tax grew by 2.6% to €50.5m, and operating profits before non-trading items were up by 9% to €32.7m. There was also a 108% jump in basic earnings per share to 30.4c, and the final dividend of just over 7c per share is 5% ahead of 2013.

ICG finished the year with net debt of €61.3m, down by 34.4% on the €93.4m remaining owed at the close of 2013. That debt is expected to fall further, to below €40m, this year.

The sea passenger market, to and from Ireland, jumped by 2.6% last year, which helped boost ICG’s ferries operation.

Irish Ferries grew revenue by 14% to €184.3m, with operating profits climbing from €24.9m to €28m.

Management said the current year has started strongly.

“The strong momentum, evident in the fourth quarter of 2014, has continued into early 2015, giving us confidence that we can look forward in 2015, in the absence of unforeseen developments and assuming continued lower oil prices, to strong growth in revenue and earnings,” commented ICG chairman John B McGuckian.

In the first two months of this year, ICG has seen a 16% year-on-year growth in car numbers on its vessels and a 3% rise in passenger carryings; while roll-on/roll-off freight volumes were up by 14% on the same period last year.

“ICG remains a consistently strong cashflow story. Its structural low-cost base, healthy slot positions and market shares and strong asset utilisation provide it with inherent competitive advantages,” noted Stephen Furlong, of Davy Stockbrokers.

“The financial position remains strong,” he added.

While underlying fuel costs were lower last year, particularly in the fourth quarter, the operation of Irish Ferries’ newest fleet addition, The Epsilon, meant that the ferries division’s total fuel cost actually grew by nearly 14% to almost €41m.

Goodbody Stockbrokers said it is likely to upgrade its full-year 2015 earnings estimates, for ICG, by around 10% on the back of yesterday’s figures and the group’s positive outlook.

It also noted, in a research note yesterday, the absence of €3m in Epsilon start-up costs this year, and the ability to retain some benefits from lower fuel prices for its potential upgrade.

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