GEOFF PERCIVAL: Origin Enterprises makes strong start to year

Analysts are expected to increase net profit forecasts for Origin Enterprises, following the Dublin-based agri-services group reporting a strong start to its current financial yea, writes Geoff Percival.

Origin reported a 3.9% year-on-year rise in revenues, to €346.7m, for the three months to the end of October — the first quarter of its current financial year.

“We expect consensus to raise their 2018 net income forecasts post this solid trading update”, said Merrion analyst Darren McKinley, who has a price target of €7.25 on the Origin stock which was up marginally at around €6.73 yesterday.

“In what is a seasonally quiet period for the group, the first quarter planting out-turn provides a good foundation for the year ahead with overall trading performance described by management as satisfactory.

In a competitive market, Origin achieved higher demand for agronomy service and inputs in the period,” said Davy analysts Cathal Kenny and Roland French in a research note.

For the quarter, Origin saw near 10% underlying growth in its Ireland and UK division, and 13.5% in continental Europe.

On the back of the update, Goodbody Stockbrokers upped its earnings per share forecasts for Origin’s current financial year by around 2% to 47.9c and said it maintains a positive stance on the stock.

“Importantly, autumn and winter crop planting in the UK is forecasted to be 2.8% ahead of last year, which provides a good platform for the seasonally important second half of the year,” said Goodbody’s Jason Molins, who has upped his price target for the stock to €7.50.



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