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					                                                   Irish Equity Morning Note

                                                                                                                                   October 3, 2011
     Equity Desk: +353 1 670 2233
     Equity Research: +353 1 611 5611                                                                 Market                       Latest   1d%     6m%
                                                                                                      S&P 500 INDEX                1152.7   -0.7    -15.1
                                                                                                      NASDAQ COMPOSITE INDEX       2467.6   -0.5    -13.4
                                                                                                      FTSEUROFIRST 300 INDEX        923.4   -1.1    -19.1
       Today’s News                                                                                   FTSE 100 INDEX               5101.7   -1.8    -14.7
                                                                                                      NIKKEI 225                   8700.3    0.0    -11.9
                                                                                                      SHANGHAI A SHARES            2581.4   -0.3    -21.1
               Economic Update                                                                        IRISH OVERALL INDEX          2503.2   -0.3    -14.9
               NCB September 2011 PMI
                                                                                                      Forex                        Latest   1d%     6m%
                                                                                                      Euro/$                       1.3453   -0.9     -6.3
               Kerry Group (€26.20) – BUY                                                             Euro/Stg
                                                                                                      Euro/Yen
                                                                                                                                   0.8607
                                                                                                                                   103.65
                                                                                                                                             0.0
                                                                                                                                             0.4
                                                                                                                                                     2.6
                                                                                                                                                    16.4
               Denmark imposes “fat tax”                                                              $/Yen                         77.08    0.1     9.0

                                                                                                      Bond Yields                  Latest   1d bp   6m bp
               Paddy Power (€38.50) – HOLD                                                            US 10yr                       1.90     -1.7   -154.5
               Light at the end of the tunnel for Full Tilt Poker as French tycoon looks to           German 10yr                   1.85     -3.2   -151.7
               acquire                                                                                UK 10yr                       2.43     -3.2   -151.7
                                                                                                      Japanese 10yr                 1.02     -0.5    -20.1
                                                                                                      Irish 10yr                    7.64     5.5    -246.5
                                                                                                      Spain 10yr                    5.14     4.0      -7.1
                                                                                                      Irish/German 10yr Spread      5.79     8.7     -94.8
                                                                                                      Spain/German 10yr Spread      3.28     7.2    144.6

                                                                                                      Corporate Bond Yields        Latest   1d%     6m%
                                                                                                      Moody's AAA Indices           4.01    -2.2    -22.6
                                                                                                      Moody's BAA Indices           5.29    -1.7    -13.1

                                                                                                      US Corporate Bond Spreads    Latest   1d%     6m%
                                                                                                      (over US 10yr Treasury)
                                                                                                      Moody's AAA Indices           2.11    -2.7    -75.7
                                                                                                      Moody's BAA Indices           3.39    -1.7    -64.6

                                                                                                      Official CB Interest Rates   Latest   1d%     6m%
                                                                                                      ECB Rate                     1.500     0.0    50.0
                                                                                                      UK Base Rate                 0.500     0.0     0.0
                                                                                                      US Fed Funds                 0.250     0.0     0.0
       Disclosures begin on page 4                                                                    JPY Rate                     0.100     0.0     0.0

                                                                                                      Money Market Rates           Latest   1d%     6m%
                                                                                                      Euribor EUR 3M               1.554     0.3    26.2
                                                                                                      Libor GBP 3M                 0.953     0.3    16.7
                                                                                                      Libor USD 3M                 0.374     0.6    22.9

                                                                                                      Money Market Spreads         Latest   1d%     6m%
                                                                                                      (over Official CB Rates)
                                                                                                      Euribor EUR 3M Spread        0.054    -7.4    -76.6
                                                                                                      Libor GBP 3M Spread          0.453    -0.7     43.1
                                                                                                      Libor USD 3M Spread          0.124    -1.8    128.1

                                                                                                      Commodities                  Latest   1d%     6m%
                                                                                                      WTI Crude Future              77.8    -1.4    -28.9
                                                                                                      Gold                          1633     0.3     14.5
                                                                                                      CRB US Spot Foodstuff         460     -1.4     -7.6
                                                                                                      CRB US Spot Metals            861     -0.8    -20.5
                                                                                                      Baltic Dry Index              1899    -0.7     24.1




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Produced by NCB Stockbrokers Limited, a member of ESN                                                             All ESN research is available
Distributed by the members of ESN       (see last page of this report)                                            on Bloomberg: “ESNR” <go>

NCB Stockbrokers Ltd is regulated by the Central Bank of Ireland. NCB Stockbrokers Ltd is a member of the Irish Stock Exchange and the London Stock
Exchange.
                                                                     Morning News & Views



Economic Update                                                                                                                          Ireland/Economy

                                                               •     NCB September 2011 PMI
                                                               •     The NCB PMI, a composite index, dipped lower in September (47.3 from 49.7). The
                                                                     output component contracted this month unlike last month when it increased despite
                                                                     the fall in the composite index (49.8 from 52.4. New orders fell sharply on the month
                                                                     to reach 45.8 from 47.7, with new export orders falling for the first time in 11 months
                                                                     (49.2 from 53.5). These figures highlight the slowdown in the global economy over
                                                                     the last couple of months. We had already pencilled in a slowdown in our Irish 2011
                                                                     GDP and expect it to contract marginally, unlike the consensus who expect
                                                                     expansion. We still, however, expect Ireland to hit its EU/IMF deficit targets despite
                                                                     this slower growth.
                                                                                                        Brian Devine +353 1 611 5847 brian.devine@ncb.ie




Kerry Group                                    €26.20          BUY                                                              Ireland/Food & Beverage

 Key financials (EUR )         12/10    12 /11 e   12/12e
                                                               •     Denmark imposes “fat tax”
Sale s (m )                     4,960    5 ,34 1     5,599
EBITDA (m)                        581       62 5       654
EBITDA mar gin                1 1.7%    11.7%      1 1.7 %
                                                               •     The Facts: Denmark has imposed a tax on saturated fat in food products. The tax
EBIT (m )                         454       48 1       502           amounts to 16 DKK (c.€2.11) per kilogram of saturated fat content in a product.
EBIT m argin                   9.2%      9.0%       9.0 %
Net Pr ofit (adj.)(m)            337       37 0       400      •     Our Analysis: The tax will add c.€0.10 to the price of a burger and €0.29 to a small
ROC E                         11.6%     1 1.9 %    12.1%             pack of butter. This tax is the latest in a number of its kind introduced in Europe to
Net debt/(c ash) (m)           1,112       91 7       673
Net Debt/Equity                  0.7        0.5        0.3
                                                                     encourage healthier eating; Denmark already has a tax on high sugar content foods
Debt/EBITD A                     1 .9       1.5        1 .0          while Hungary introduced a tax on high sugar, salt, carbohydrate and caffeine
Int. cover(EBITDA/Fin. int)      9 .6      12.9       18 .3          content products earlier this year. In addition, France proposes to quadruple the VAT
EV/Sales                         1 .1       1.1        1 .0
EV/EBITDA                        9 .7       9.0        8 .2
                                                                     rate on drinks with added sugar from January 1.
EV/EBITDA (adj.)                 9 .7       9.0        8 .2
EV/EBIT                         12 .4      11.7       10 .7    •     Conclusion & Action: Ingredients companies such as Kerry Group, that can help
P/E (adj.)                      13 .0      12.4       11 .5          food manufacturers reduce the fat and sugar content of their products, have been
P/BV                             2 .7       2.4         2 .1         benefiting from increased demand for healthier products. The introduction and threat
OpFC F yield                   9.5%      9.8%      1 0.5 %
Div idend yield                1.1%      1.2%       1.3 %            of introduction of these health taxes is likely to speed up the move by food
EPS (adj.)                      1.92       2.1 1     2.28            manufacturers to develop healthier products and we believe Kerry is likely to benefit
BVPS                            9.27     1 1.0 9    12.77
DPS                             0.29       0.3 2     0.35
                                                                     from this trend. Kerry trades on 12.4x our 2011E earnings and 9.0x 2011E
                                                                     EV/EBITDA and we rate the stock BUY.


                                                                                             Darren Greenfield +353 1 611 5918 darren.greenfield@ncb.ie




  NCB Stockbrokers Ltd is regulated by the Central Bank of Ireland. NCB Stockbrokers Ltd is a member of the Irish Stock Exchange and the London
  Stock Exchange
                                                                     Morning News & Views

Paddy Power                                     €38.50           HOLD                                                                       Ireland/Gaming

 Key financials (EUR )
Sale s (m )
                                12/10
                                3,838
                                          12 /11 e
                                           4 ,46 7
                                                     12/12e
                                                      5,022
                                                                 •   Light at the end of the tunnel for Full Tilt Poker as French
EBITDA (m)                        110         12 4      138          tycoon looks to acquire
EBITDA mar gin                  2.9%       2.8%       2.8 %
EBIT (m )                         104         11 2      126      •   The Facts: It has been reported that French business tycoon Bernard Tapie’s
EBIT m argin                    2.7%       2.5%       2.5 %
                                                                     investment firm has agreed to acquire the business and assets of troubled online
Net Pr ofit (adj.)(m)              83          94       104
ROC E                         106.8%      6 8.2 %    85.4%           gambling company Full Tilt Poker.
Net debt/(c ash) (m)            (156 )     (16 1)     (235)
Net Debt/Equity                  -0.6        -0.5       -0.7     •   Our Analysis: Full Tilt has not been far from the spotlight of late, thanks to
Debt/EBITD A                      -1 .4       -1.3       -1 .7       allegations that the Internet gambling site was operating an illegal $440m Ponzi
Int. cover(EBITDA/Fin. int)   (777 .6 )    (83.8)    (100 .7)                                                 th
EV/Sales                           0 .3        0.4        0 .3
                                                                     scheme, to say nothing of the April 15 indictment of key principals of Full Tilt Poker
EV/EBITDA                        11 .9       13.0       11 .7        with a list of offences including bank fraud, money laundering and illegal gambling.
EV/EBITDA (adj.)                 11 .9       13.0       11 .7
EV/EBIT                          12 .6       14.4       12 .9    •   With Full Tilt's state of the art software platform and its significant level of brand
P/E (adj.)                       17 .9       20.0       18 .1
                                                                     awareness, one can easily see Groupe Bernard Tapie's rationale for taking a closer
P/BV                              6 .5        6.2        5 .2
OpFC F yield                  1 1.0%       8.1%       8.5 %          look at a potential acquisition. There are, however, a number of hurdles facing any
Div idend yield                 1.7%       2.0%       2.1 %          potential revival of the stricken poker site, including the favourable resolution of all
EPS (adj.)                       1.72       1.9 3      2.13
                                                                     outstanding legal issues and the repayment of former players' funds, believed to be in
BVPS                             4.74       6.2 3      7.40
DPS                              0.64       0.7 6      0.80          excess of $300m.
                                                                 •   While this news may be seen as a glimmer of hope for Full Tilt Poker, it is by no
                                                                     means out of the woods yet. If successful, the Managing Director of Groupe Bernard
                                                                     Tapie hopes to have the poker site back up and running by January 2012 - a tall
                                                                     order in our view.
                                                                 •   Conclusion & Action: This latest development will be welcomed by Full Tilt’s
                                                                     customers who will look to seize the opportunity to withdraw their funds from frozen
                                                                     online accounts. While significant issues remain before any deal can be agreed,
                                                                     there may well be a future for Full Tilt if the rejuvenation of the well known brand is
                                                                     handled carefully.


                                                                                 Gaming Specialist Sales +353 1 611 5839 gaming.specialistsales@ncb.ie




NCB Stockbrokers Ltd is regulated by the Central Bank of Ireland. NCB Stockbrokers Ltd is a member of the Irish Stock Exchange and the London
Stock Exchange
                                                      Morning News & Views


Disclosures
This report has been prepared and issued by NCB Stockbrokers. NCB is neither liable for the proper and complete transmission of this
report nor for any delay in its receipt. Any unauthorised use, disclosure, copying, distribution, or taking of any action in reliance on this
report is strictly prohibited. The views and expressions in the report are expressions of opinion and are given in good faith, but are
subject to change without notice. This report may not be reproduced in whole or in part or passed to third parties without permission.
The report has been prepared and issued by NCB with information obtained from various sources. NCB does not guarantee its
accuracy or completeness, and neither NCB nor any employee thereof shall be liable in respect of any errors or omissions or for any
losses or consequential losses arising from such errors or omissions.
Neither the information contained in this report nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy
or sell any securities or any options, futures or other derivatives related to such securities (‘related investments’).
This report was prepared for the clients of NCB only. It does not have regard to the specific investment objectives, financial situation
and the particular needs of any specific person who may receive any of this report. Investors should seek financial advice regarding the
appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand
that statements regarding future prospects may not be realised. Investors should note that income from such securities, if any, may
fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested.
Past performance is not necessarily a guide to future performance.
Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in
this report. In addition, investors in securities such as ADRs, whose value are influenced by the currency of the underlying security,
effectively assume currency risk.
NCB may trade for its own accounts as odd-lot dealer, market maker, block positioner, specialist and/or arbitrageur in any securities of
the issuer or in related investments, and may be on the opposite side of public orders.
Share Ownership Policy: NCB Stockbrokers allows its analysts to own shares/derivative positions in the companies they produce
research notes and recommendations on. NCB Stockbrokers Ltd. ensures that all staff account dealing is conducted in strict
compliance with its internal staff-dealing procedure, and accordingly is satisfied that the objectivity of the research and
recommendations is not compromised.
NCB and any director, officer or employee thereof, may have a long or short position in any securities of the issuer or in related
investments.
NCB acts as a stockbroker/advisor to Donegal Creameries, Irish Continental Group, Independent News & Media, NTR,
Zamano.
The reader of this note should be aware that the research analyst(s) or an individual who assisted in the production of this research
report (or a member of his/her household) may have a direct ownership position or a derivative position in securities issued by a
company covered in this report.
NCB and any director, officer or employee thereof, may from time to time perform investment banking or other services for, or solicit
investment banking or other business from, any entity mentioned in this report.

  Analyst Certification:

  Each research analyst responsible for the content of his/her research notes, certifies that all of the views expressed in this
  research report accurately reflect their personal views about any and all of the subject issuers or securities, and that no part of
  their compensation was, is or will be directly or indirectly related to the specific recommendations or views in this report.




NCB Stockbrokers Ltd is regulated by the Central Bank of Ireland. NCB Stockbrokers Ltd is a member of the Irish Stock Exchange and the London
Stock Exchange
                                                    Morning News & Views


Important Information for US Clients
NCB Securities LLC (“NCB U.S.”) is a member of FINRA and is an affiliate of NCB.
NCB has prepared this research report. This report is not to be used or considered as an offer to sell, or a solicitation of an offer to buy.
It has been prepared for informational purposes only. Reasonable care has been taken to ensure that the information contained herein
is not untrue or misleading. To the extent permitted by applicable law, rule or regulation, no representation is hereby made as to the
accuracy or completeness of this research report, no reliance should be placed on it and no liability is accepted for any loss arising from
reliance on it. Additional information is available upon request.
For further information with respect to this research report or to any security referred to herein, please contact NCB U.S. Any U.S
recipient of this report that is a "U.S. Institutional Investor" that wishes further information regarding, or to effect any transaction in, any
security discussed in this report should contact and place orders only with NCB U.S., who, without regard in any way limiting the
foregoing, and solely for purposes of Rule 15a-6 under the U.S. Securities Exchange Act of 1934, as amended, accepts responsibility
for this report and its dissemination in the United States. NCB U.S. does not accept or receive any compensation of any kind for the
dissemination of this research report.
As this research report was not prepared by a broker-dealer registered with the Securities and Exchange Commission or a member of
FINRA, the FINRA Rules on Research Analyst and Research Reports and the attendant restrictions and required disclosures do not
apply to the person preparing this report and the firm which has furnished it to NCB U.S. for distribution.
Research Disclosure:
    •     Neither NCB U.S. nor any of its members or affiliates own more than 1% of a class of common equity securities of certain
          companies mentioned in this report
    •     An affiliate of NCB U.S. may have: managed or co-managed a public offering of securities of certain companies mentioned in
          this report in the past 12 months; received compensation for investment banking services from certain companies mentioned
          in this report in the past 12 months; or expects to receive or intends to seek compensation for investment banking service from
          certain companies mentioned in this report in the next three months
    •     NCB U.S. does not act as a market maker
    •     At present, there are no material conflicts of interest known to NCB U.S. at the time of distribution of this research report

This research report is provided solely for informational purposes and use by U.S. Institutional Investors who are expected to make
their own investment decisions without undue reliance on this report. Except as required by law, rule or regulation, NCB U.S. accepts
no liability whatsoever for any direct, or consequential or other loss arising from any use of this report or its contents.

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means electronic, mechanical,
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Footnotes
    1.   Ratios where share price is an input are calculated using (a) the respective fiscal year average share price for historic years
         and (b) the current share price for current and future years.




NCB Stockbrokers Ltd is regulated by the Central Bank of Ireland. NCB Stockbrokers Ltd is a member of the Irish Stock Exchange and the London
Stock Exchange

				
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