Irish Continental Grp - Ferry delivery delay is a further hit to FY2018 but it is a long-term game

Davy Research
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The announcement by Irish Ferries of a delay in the W.B. Yeats ship from the German shipyard will mean that it will now commence service on Dublin-Holyhead in September. This will further hit earnings (EBITDA) by c.€4-5m and as such we reduce our FY2018 forecasts to €74m (from €78.5m). While clearly disappointing to all concerned, we do not see this as material in the context of a 40–year useful life of the ship (and leave our EBITDA FY2019 forecasts of €91m unchanged). Separately, the announcement of further capacity by Stena on the Irish Sea by 2020/21 (more freight, less passengers) does not surprise us and still leaves Irish Continental Group (ICG) in an excellent strategic position to deliver profitable growth over the medium term.