DAVY VIEW

After operating all its conventional ferry services in the pandemic, we think Irish Continental Group (ICG) will emerge with a range of growth avenues: (i) passenger/car recovery; (ii) RoRo growth; (ii) Container/Terminal business; (iv) duty free; and (v) Dover-Calais route. The English Channel ‘Short Straits’ market is a multiple of the size of the Ireland-UK market, where ICG currently offers services; it also provides the opportunity to significantly scale up its existing ferries’ business model. The latter has caused us to reassess medium-term growth, and we are therefore raising our price target to €6.5 (from €5.5) based on our DCF, peer infrastructure asset valuations and low-teen EV/EBITDA multiples.