The arrival of Peter Lynch, former financial director of Eircom, at Oakhill has seen the share price of the printing group rise by over 50 per cent. The share price has risen from 27 cent before his arrival, to 43 cent per share as of May 31st. Analysts are attributing this rise to anticipation of future growth, due to Lynch's involvement with the group.
'It looks as though Peter Lynch will use Oakhill as a vehicle to purchase other businesses, and if he can acquire the right companies and do so on good terms, I would expect to see more growth in the company's share value,' says John Sheehan, an analyst for NCB Stockbrokers.
'You can see from his track record with both Eircom and Adare that Peter Lynch is extremely good at maximising value from companies. With that in mind, it was inevitable that the market would react in such a way to his taking over at the helm of Oakwell. It is equally clear that because there is a lot of trust in Lynch as a manager, there is a large amount of hope value in the share price,' thinks Philip O'Sullivan, an analyst with Goodbody Stockbrokers.
However, Sheehan warns that Lynch may find stiff competition in the printing sector. 'If Oakhill is looking to expand further in the printing industry, it will be met with stiff competition. It is a challenging industry. It all depends on whether Lynch and his new management team can identify the right acquisitions,' he told FINANCE.
Lynch's arrival as executive chairman and the largest shareholder (with a 20 per cent stake, plus a warrant deal priced at 35 cent per share) coincided with the agreed resignation of the whole of the existing board of directors. Lynch has appointed financier John Doris to the board.
Lynch seems to be intent on repeating his successes with the Adare Printing Group, where in under five years he - along with Nelson Loane - managed to grow the company by a factor of ten. |
