But the company, headed by Tony O’Reilly Jr, is keen to make up for lost time, now that global energy markets are firing on all cylinders.
Earlier this year, the company received a major boost when ExxonMobil agreed to finance the development of its Dunquin prospect, an oil and gas field off the coast of Kerry that is roughly the size of Ireland. O’Reilly is on record as saying the field could “transform the energy requirements of western Europe”.
The company is currently seeking a partner to develop the Spanish Point field off the western coast. Although there’s a risk that neither project will yield enough energy to fry an egg, Davy, the stockbroker, feels that Providence is worth nearly 24c a share, more than three times its closing price on Friday of 7c.
The broker believes that success at Dunquin may be worth 50c a share, while Spanish Point could be worth 29c. Those with an appetite for risk might find it hard to ignore this one for too long.
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Old Debenhams
Merrill Lynch and Citigroup may have got the Debenhams float away last month, but an analysis of the shareholder register suggests that it was far from easy.
Publication of the register has confirmed what many in the City suspected at the time: British institutions shunned the float.
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Stung by the suggestion that they were being sold a pup by the private-equity owners of Debenhams (and claims that they had sold the business too cheaply in 2003), many of the City’s best-known names appear to have boycotted the issue.
Of the 10 institutional shareholders who owned stakes in “Old Debs”, only three own shares in “New Debs”.
Even those that did participate bought tiny stakes. Standard Life, for example, owned 6% of “Old Debs”, but it owns a mere 0.2% of “New Debs”. To date, the British institutions look smart. Having floated at 195p (285c), shares in Debenhams have made very little headway, closing this week at 196p.
The “New Debs” shareholder register is dominated by hedge funds and value investors.
Building a more long-term base of shareholders will be a tough task, particularly as Debenhams’ private-equity backers are free to dump their 30% stake on the market from October.
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Transport picks
WITH stock markets enduring a shaky period, it can’t be long before we hear companies preaching about their fabulous “defensive qualities” — often the same companies that boasted of their growth prospects when the market was more bullish.
Sorting out the real defensive stocks from the pretenders is tricky. But it could be time to look at bus and rail companies. The transport analysts at Merrill Lynch point out that since 1990, bus and rail companies have outperformed the FTSE 350 during months of negative stock-market returns.
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Our pick is Stagecoach. Not only does it offer defensive qualities, but it also has elements of a punt about it. The company is bidding to retain its South West trains franchise, the busiest rail company and most lucrative franchise in Britain. If it wins, the shares should surge ahead — if not, shareholders might reasonably expect a share-buyback programme.