Print and packaging firm Clondalkin Group faces a number of challenges if its share price is again to scale the heights of earlier this year.

Like many other second-line stocks, it has the task of finding new investors as Irish institutions move more of their money into continental European equities ahead of the introduction of the single currency. Meanwhile, it has yet to convince the market that its success in outperforming its sector over the last five years justifies a higher rating.

Chief executive, Norbert McDermott, says the company's understanding last spring was that Irish institutions would be passive investors as the euro approached, retaining their existing weighting in Irish stocks while channelling new funds into continental European shares.

However, Mr McDermott believes there has been a change in the stance adopted by a number of fund managers as they have come under growing pressure to increase their weighting in European shares at the expense of smaller Irish firms.

Some 15 per cent of Clondalkin shares is in overseas hands at present, mainly in Britain and the US, while 5 per cent is held by the board and management and 30 per cent is owned by private investors. Irish institutions own the remaining 50 per cent, making them a significant presence on Clondalkin's shareholder list and any divestment a major concern.

"What we have to do is sell in Europe," says Mr McDermott.

Clondalkin management met with investors in London and Edinburgh following the release of half-year results last week, but the company is well aware that it will have to start marketing its shares further afield. "In coming months we have to do it in places we've never done it before like Paris, Amsterdam and Frankfurt," Mr McDermott says.

Meanwhile, the company's share price has followed the print and packaging sector down in recent months. Despite delivering consistent EPS growth in a sector that has become renowned for its profit warnings, the share price has fallen from an all-time high of 790p last March to below 600p.

However, the fall may be overdone particularly as Clondalkin has expanded its activities well beyond the basic paper and board product in the last number of years. It is also better diversified than many of its competitors.