NCB Stockbrokers has issued a hold recommendation for investors with shares in the Northern Ireland-based company Viridian. It recently announced stronger-than-expected results. Its regulated business performed as expected despite the £2million sterling (€3.3 million) impact of storms in February. NCB suggests the outlook for these businesses will be clouded by the ongoing regulatory review, which is expected to continue until late 2001.

Construction of the £142million Huntstown powerplant is underway and until the project is complete there will be a degree of risk involved. Heavy acquisition and capital spending raised net debt to £369 million (€469 million) at the end of the year which is forecast to peak at around £700 million by 2003. NCB says earnings will fall over the next two years as a result of this increased debt. Until the ongoing regulatory review of the group's core business is completed later this year, Viridian will remain at a disadvantage to its British peers.

NCB says that despite these risks its strategy and execution has been sound. Share price growth will require the group to realise value from the unregulated portfolio while a partner for Huntstown would also be a positive development. With this element of uncertainty surrounding the company, NCB says the shares are likely to trade between £6.50 and £7.50.