The group’s share price is currently 215p – up nearly 20 per cent this year.
The reason for the recovery, say stockbrokers Collins Stewart in their July review of Channel Island stocks, is the ‘satisfactory progress’ the group announced when posting its year-end results in March and the positive update its chairman, Senator Frank Walker, gave at the company’s annual general meeting in May.
Our forecasts for the current year remain unchanged following the agm statement,’ said Collins Stewart analyst Russell Wynn.
‘We continue to look for steady progress in the retail division and substantially better results from the technology division.
The publishing division (which includes the Jersey Evening Post) will do well to match last year’s performance given the tough market conditions.
The shares have recovered well this year, performing the best of the local stocks, and we continue to rate them attractive.
Guiton is not the only attractive Channel Island stock, according to Collins Stewart.
‘Comprop announced its annual results in June and the figures show that excellent progress has been made in the past year,’ said Mr Wynn.
The property company’s net asset value rose from 91p to 109.
p – a 21 per cent increase which was significantly ahead of our forecast.
This increase is likely to continue over the next few years as Comprop’s development programme progresses, particularly at Admiral Park in Guernsey.
Given this anticipated increase, we have upgraded our share recommendation from hold to attractive.
The company’s share price is currently 114.
p – it’s highest ever.
Three other Channel Island companies are rated a ‘buy’ by Collins Stewart.
Commenting on CI Traders, Mr Wynn said: ‘The outlook for the full year will depend on the important summer visitor season and Christmas.
However, the early signs are encouraging and profits should improve at least in line with our forecasts.
In addition, the group is awaiting the result of its application to operate the casino licence in Guernsey.
If successful, this would trigger a major £20m investment at St Pierre Park over the next two to three years.
With the first benefits of the merger between Ann Street and Le Riche likely to be seen in this year’s results, we remain buyers of the shares.
Flying Brands is another ‘buy’ recommendation.
‘The shares have performed well this year, rising 17 per cent in the last three months, and we continue to look for a steady profit improvement for the group this year and next,’ said Mr Wynn.
The company announced a positive start to the current year at the agm in April and in the first quarter it has traded well and in line with market expectations.
The final ‘buy’ is International Energy Group, which owns Jersey Gas.
‘IEG’s shares have recently started to recover from their oversold position, having risen by five per cent since we upgraded our recommendation to ”buy” in April and further recovery in the share price is likely,’ said Mr Wynn.
The main profit contributing area was the Channel Islands and Isle of Man, which increased their contribution by 4.
This was despite a four per cent fall in turnover, reflecting record warm weather during the year and a fall in overall LPG prices.
The group has done well to increase its margins, given this difficult trading background and volatile world oil prices.
The final firm analysed by Collins Stewart is the States-controlled Jersey Electricity Company, which retains its ‘hold’ share status’Overall, the significant increase in profitability of the core businesses bodes well for the longer term, as does the rationalisation of the company’s contracting division,’ said Mr Wynn.
However, we estimate this year that core profits will be reduced by non-trading items, including a £7m payment into the company’s pension fund, producing a total nearer to last year’s profits.
Having undergone significant investment reorganisation and rationalisation in recent years, a much more efficient and profitable business is now emerging.