Davy Morning Equity Briefing

Nov 21, 2024

Origin Enterprises

Q1 trading update – outlook healthy

Q1-25 presented a challenging start for Origin as Agriculture revenues declined by 14.2%, impacted by unfavourable planting conditions. However, this was partially offset by a solid performance in Living Landscapes, which saw growth of c.25%, driven by strong organic expansion (c.13%) and recent acquisitions. Encouragingly, recent adverse weather patterns have begun to reverse, and Agriculture volumes are expected to recover in Q2-25, with the total planted area for winter cropping forecast to return to normalised levels. On-farm inventory levels remain low, creating opportunities for increased demand as the season progresses. At first look, we envisage limited changes to our current forecasts.

Symrise

CMD update – long-term margin target raised

At its recent Capital Markets Day (CMD), Symrise outlined its long-term targets through 2028, maintaining its organic sales growth ambition of 5-7% CAGR, while raising its EBITDA margin range to 21-23% (previously: 20-23%). The company’s roadmap for sustainable revenue and profit growth is underpinned by its continued emphasis on its three strategic pillars of Growth, Efficiency and Portfolio, with an expanded focus on new priorities under the ONE Symrise strategy. Additionally, Symrise has modestly upgraded its outlook for FY24, now seeking organic growth “above” 7% and EBITDA margin “above” 20%, while its FY25 targets remain in place.

Jet2 plc

Delivers another record H1

Jet2 has reported a record H1 FY25 headline profit before FX revaluation and taxation of £772.4m, 15% ahead of the Davy estimate of £671.1m. This is an increase of 16% on the prior year (£664.6m) and ahead of market expectations. Jet2’s reported ‘own cash’ stands at £2318.3m, up 9% (2023: £2121m). It achieved an EPS of 279.3p (+21% year-on-year (yoy)) and announced an interim dividend of 4.4p, up from 4.0p per share announced at last year’s interims. The company expects to deliver FY25 headline profit before FX revaluation and taxation ahead of market expectations of £541m (Davy: £555m).

Irish economy

Home prices rise by 10%, while employment accelerates in Q3

New data published by the Central Statistics Office (CSO) show that employment accelerated in Q3, while home prices continued to grow in double digits in September. The Irish economy had been widely expected to slow this year, but evidence from a broad range of indicators points instead towards rapid growth and strong levels of demand. However, supply has lagged behind, especially in terms of housing. We expect strong momentum in the second half of this year will contribute to an increase in residential property prices next year of about 7%.