SHIRE MOVES TAX BASE TO IRELAND FROM US - UK listed multinational Shire Pharmaceuticals is abandoning its Basingstoke headquarters in England in favour of Ireland in an effort to cut its tax bill. The company says most of its revenues are being generated from international markets so the company says it wants to 'protect the group's taxation position'. The move means Shire will pay 12.5% corporate tax compared to a rate of 28% in Britain. There is no job creation involved in the move but obviously our tax coffers will benefit at the expense of Britain's. How the UK Chancellor of the Exchequer views the development is another matter!
Friends First Economist Jim Power says that if many more British companies were to follow Shire's example, Ireland was in danger of finding itself labelled a 'tax predator'. He also said that Ireland might lose the support of the UK in its lobby in Europe against a common corporate tax rate. Mr Power says that Finance Minister Brian Cowen is likely to be delighted by today's news given that his Government put the legislation in place for such a move. Despite the fact that no new jobs will be generated by the change in status, it will mean much-needed extra tax revenue for the Exchequer. However, the economist says that it the Minister looks at the bigger picture, he should be concerned at the development's ramifications further down the road.
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PROFIT WARNING FROM CPL - Recruitment group CPL has issued a profit warning as a result of a decline in the recruitment of permanent staff. The company said that the reduction in economic growth and activity in Ireland and elsewhere in recent months has had an adverse effect on many of the markets in which CPL operates. CPL said it now expects its profit before tax for the year to 30 June 2008 to be approximately 15% below current market expectations.
Jim Power says this morning's warning should not really come as a surprise to anyone given the fact that a recruitment agency operating in an environment where employment is under serious pressure in the economy is always going to experience difficulties. He says one of the big problems over the last 12 months is the big shake-out in the construction sector, which is gathering pace at the moment. There is not a lot of hiring going on in many other sections of the economy. The economist also points out that it is very difficult to identify where job creation is going to come from during the next 12 months. 'The Irish labour market is currently in quite a protracted slowdown,' he states.
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MORNING BRIEFS - Elan has given an update on its multiple sclerosis drug Tysabri. Tt says that as at the end of last month, about 26,000 patients were receiving the drug. Most importantly it says that there has been no more cases of the potentially fatal PLM disease since the drug was relaunched in the July 2006.
Elan has a goal of treating 100,000 patients worldwide with Tysabri by 2010
*** Our biggest multinational employer, Intel, saw its share price increase by 8% after issuing first quarter results in line with expectations and assuring investors that 2008 revenue and profits forecasts were intact. Intel, which is dealing with competitive pressure as well as a recessionary backdrop in the US, said profits fell from $1.64 billion a year ago to $1.44 billion in the first three months - that fall was expected after an earlier warning. However revenues, at more than $9.5 billion, were more than expected.
*** The number of grievances referred to the Labour Court in 2007 fell by more than 30% last year to 934. However, chairman Kevin Duffy says the case load arriving at the Labour Court is still much higher than a decade ago with much of the increase blamed on breaches of Registered Employment Agreements, especially in the construction sector.
*** On the currency markets, the euro is worth $1.5825 and 80.55 pence sterling.
