Broker tips: DCC, Vodafone, Land Securities

19th May 2015 11:31

Support services group DCC maintained its track record after another year of strong earnings growth, analysts at Berenberg said in a note on Tuesday.Dublin-based company said its pre-tax profit for the year to 31 March rose 8.1% year-on-year to £163.3m, while earnings before interest, tax, depreciation and amortisation climbed 6.8% to 199.6m and operating profits for period rose 10.5% to £221.7m.The brokerage underlined how the strong performance in the 12 months to the end of March led to a 10% growth in dividend, which marked the 21st consecutive year of dividend growth since the company listed in 1994."This track record of stable earnings growth, strong cash conversion and high rates of return make DCC a core holding in our view," Berenberg analysts said.Meanwhile, the brokerage said the FTSE 250 group's decision to submit a €464m (£332m) binding offer to oil giant Shell for its Butagaz liquefied petroleum gas business in France was welcome news, as it would significantly enhance the group's earnings, whic makes the deal "particularly attractive".Berenberg retained its 'buy' rating on the stock with a target price of 4,780p. Analysts were somewhat disappointed in full-year results from Vodafone, with Nomura bemoaning the lack of profits bounce generated Project Spring in its first year, while Societe General wondered if the giant £19bn investment programme should be renamed Project Summer.Thanks to a return to growth in the fourth quarter, revenues from the telecoms titan rose 10% at the reported level to £42.2bn, 0.8% ahead of consensus estimates, with earnings before interest, tax, depreciation and amortisation of £11.89bn down 6.9% on the previous year but beat forecasts by 0.4%.But this beat was only thanks, analysts from both banks pointed out, to £135m in one-offs due to some interconnect settlements in the second half, otherwise the figure would have been 0.7% short of expectations.Nomura, which reiterated its 'reduce' rating, added: "Organic EBITDA fell 7% in year one of Vodafone's Project Spring, and any expectations for an EBITDA bounce as Project Spring moves towards break-even have been dashed."Land Securities' full year reported net asset value beat consensus by 5%, while adjusted earnings per share were in line, Societe Generale said in a note on Tuesday.The French bank said that adjusted diluted NAV per share of 1,293p was 3% above its in-house forecast of 1,251p, while the dividend of 31.85p was in line with consensus but slightly below its own 32p estimate."The beat in NAV comes from all segments," said SocGen. "In offices, the performance was impressive, with a 23.2% year-on-year growth largely above our 14.5% estimates and around four percentage points above British Land's performance."The bank has a buy recommendation on the stock and a 1,620p target price that reflects a 7% premium to its estimated fair value of 1,510p.