CPL rises as Goodbody highlights attractions post-Brexit

Shares in CPL Resources, whose stock remains one of the most heavily-beaten in the Irish market following Brexit, rose on Tuesday as Goodbody Stockbrokers highlighted its defensive qualities ahead of its full-year results next week.

The recruitment firm’s stock rose 3.1 per cent in Dublin to €4.95, giving it a market value of €151 million. However, it still remains down by almost 18 per cent from where it stood before the UK voted in referendum in June to leave the EU.

"With about 74 per cent NFI (net fee income) exposure to Ireland and circa 16 per cent exposure to the UK, where the bias is towards the healthcare and pharma sectors, both the severity of the share price decline in the aftermath of the Brexit vote, and the failure to rebound would seem unjustified and widens the valuation gap relative to the peer group," said Gerry Hennigan, an analyst with Goodbody Stockbrokers, who rates the stock a buy.

“With CPL set to outperform that group in terms of NFI growth for the year to June, we continue to view the valuation relative to peers as unwarranted,” he said.

CPL, whose chief executive Anne Heraty and husband and fellow director Paul Carroll own about 36 per cent of the group, said in July that Brexit "presents both challenges and opportunities" for the company.

It said at the time that its revenues and earnings were continuing to grow and that its full-year figures would be “in line with market expectations”.

The consensus view among analysts is that CPL will post full-year pretax profit of €15.3 million, up from €14.1 million for the previous year. Goodbody Stockbrokers sees the company’s net fee income rising 18.3 per cent to €69.4 million.