Agri services firm Origin Enterprises was the standout performer of the listed Irish agribusiness this week, as shares in the company soared by almost 7% in the last week to reach a six-month high of €6.30.

Shares in Origin rallied after the company announced its first move into South America, following the acquisition of a 65% stake in Brazilian company Fortgreen Commercial Agricol for €41.3m on a cash-free and debt-free basis.

Fortgreen has sales of €28.4m for its 2017 financial year, while earnings (EBITDA) stood at €9.3m. This gives the business a very strong earnings margin of 33%.

With the business valued at just over €60m, Origin has paid a multiple of almost seven times the earnings for its stake in Fortgreen. As part of the deal, Origin has also agreed to acquire a 20% stake in the agronomy service group Ferrari Zagatto for an undisclosed sum. Fortgreen and Ferrari have common shareholders.

Of the other listed agribusiness firms, there were gains for shares in Aryzta (+4%) and Greencore (+3%) this week. Shares in UK retailer Tesco also jumped 4% after the supermarket giant posted its strongest quarterly sales growth in seven years.

The other standout from the last week is a further weakening in oil markets. The price of Brent crude oil, the global benchmark, fell 4% this week to just over $73/barrel.

Read more

Origin Enterprises makes its move into Brazil