Irish Continental Grp - Business model awaits new ship in July 2018

Davy Research
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Irish Continental Group (ICG) reported a very much “as is” trading statement for 2017 with decent September and October numbers. The business recoups broadly half the fuel increases through surcharges. Into 2018, we see a high-single-digit fuel hit – or c.€4m to our EBITDA or c.4/5% to our numbers – implying unchanged €79.3m this year and c.€84m next year. Looking ahead to the July arrival of the W.B Yeats vessel, we believe market share gains are very likely. In addition, the balance sheet should be close to €45m in net cash by year-end – leaving it well positioned for the new ship’s arrival. We reiterate our ‘Outperform’ rating.